Nonprofit finance is complex, with layers and factors that don’t exist in the for-profit world.
We need data and analysis tools that are relevant to our businesses and to our sector.
GuideStar and Nonprofit Finance Fund (NFF) get that understanding and communicating your nonprofit’s financial story—the full picture of its financial health and priorities, and how that relates to those of your mission-driven peers—is just as important as articulating your vision and programs when talking with staff, board members, funders—indeed all your stakeholders.
We also get, and are working on, the need for data that measures nonprofit financial health at the sector and at the enterprise level.
For years we have partnered on a platform that applies NFF’s analysis to data you’ve already provided, via your nonprofit’s IRS 990 forms, hosted by GuideStar. Now we’ve made the platform more comprehensive and user-friendly, incorporating and enhancing the full functionality of what was Financial SCAN into Financial Trends Analysis tools within GuideStar Pro.
These tools can help you, for example, understand how government receivables or a facility may be impacting your liquidity, and compare your profitability and savings to those of your peers. They’ll also help you bring a clearer view of how funders see your 990 data to conversations about their support.
You can review analyses of up to five years’ worth of your organization’s 990 data in dashboards and downloadable PDF reports. These comprehensive, digestible views of your nonprofit’s financial health and performance can help you (and your board members, funders, and other stakeholders) interpret the data, and compare your organization to up to five peers—a solid foundation for data-driven financial, program, and strategic decisions, and communication of your resource needs.
Explore your organization’s:
- Key financial indicators and trends
- Profitability and progress toward full cost coverage (yes, nonprofits need surpluses to cover the full costs of delivering impact and keeping the lights on!)
- Revenue and expense composition
- Balance sheet composition
It’s easy to access this resource: Just log onto your GuideStar Pro Profile, click on the “Financials” section and the “Financial Trends Analysis” tab. You can view a short video illustrating these steps.
Remember, even volumes of numbers can only tell part of any story.
No single ratio or metric can define financial health for all nonprofits. You need internal and external context, and the critical eyes of your leadership and sometimes outside experts, to get a full picture of your organization’s well-being.
We are very pleased to share with you this crucial piece of the puzzle.
Sandi Clement McKinley is vice president, advisory services, at Nonprofit Finance Fund. Scott Menzel is GuideStar’s senior product manager.