Posts Tagged ‘financial information’

Where’s the beef?: Revenge of the math nerds

April 20, 2009

Hey, Nonprofiteer, here’s my beef:

The Board treasurer, who’s the only accountant on the Board and also happens to be the only man, brings in financial reports that might as well be in Chinese for all the information I can glean from them.  There’s something he calls the “cash flow analysis,” which goes on for pages and seems intended to follow every penny from its origin to its ultimate destiny, and then there’s the “balance sheet” which contains mysterious designations like “fund balance” and “loss carry-forward.”

What I want is something that shows me at every Board meeting whether we’re on budget or overspending, on track with fundraising or lagging behind.  What I want, in other words, is information I can act on; this seems to be information I’m supposed to sleep on, or file.  But I hesitate to ask the questions for fear of appearing to be just a dumb chick.  How to proceed?

Signed, Numerically Challenged

Hey, Challenged:

I understand your reluctance to play into stereotypes by being “the woman who doesn’t understand math;” but as a woman who doesn’t understand math I can assure you that it’s worse to be “the woman who doesn’t understand math whose nonprofit runs out of money,” and that–as you’ve so clearly perceived–is the point of reviewing financial statements at Board meetings.  Moreover, since you’re in a veritable crowd of women, the only person whose stereotypes you need to fear is one who’s completely outnumbered–so what have you got to lose?  It may be, in fact, that the Treasurer himself is the one playing “dumb chicks don’t understand numbers” games by providing you with elaborate but uninformative materials; it’s a way to keep all the power in that knowledge to himself.

So take one for the [girl] team, and say at the start of the next financial report, “Listen, I’m not sure I’m getting as much out of these reports as I should be.  Where does it say how we’re doing against our expense budget, or our revenue budget?  I want to make sure we’re on track.”  What you may discover is that as an accountant he knows how to prepare a corporate financial report but doesn’t actually know what a nonprofit needs, and so his response will be, “I haven’t been providing those figures but I can in the future if you like.”

If he seems respectful and responsive when you ask how to satisfy your clearly-articulated and reasonable curiosity, then you may want to return the favor by asking, “When you look at this month’s cash flow statement, what really stands out to you?” and then listen to what he says.  I learned to READ a cash-flow statement when I had to CREATE one, showing how many categories in my agency’s budget had to be shrunk to zero before our income would be sufficient.  By the same token, as your treasurer enters all these numbers every month, he may be saying to himself, “If we didn’t spend $800 a month on staff lunches we’d be able to pay for another staff person!”–so ask him for that kind of insight.

As for the balance sheet: the key questions for any nonprofit are, “Do you have cash on hand to pay the bills coming due this month?” and “Do you have a reserve–ideally 6 months’ to a year’s worth of operating expenses–on which to draw in the event of catastrophe?”  So you’re most concerned with “Cash on Hand” and something marked “Reserve,” “Endowment,” or “Fund Balance” (if the balance is provided separate from cash on hand).  Again, ask the question: “If our cash on hand is $2200, is that enough to pay the expenses shown in the cash flow analysis?  Where on the analysis should I be looking to find the expense figure to compare with cash on hand?”

If the Treasurer seems hostile to your requests for different or additional information, give him a month or so to comply in some way: he may simply need to get used to the idea and to figure out how to adapt his usual system to the agency’s needs.  If, however, he belittles your questions and/or ignores your requests, persist in them for three months and then go to the Board President and say, “As you’ve seen, I’ve been trying to get financial information we can all understand, but Tom seems reluctant to provide it.  Will you talk to him about making modifications?” and leave it in her hands.  This is a Board president’s job–to make sure the rest of the Board is equipped with the necessary resources and information to do its job, and to crack the whip on the resource- and information-providers to secure what everyone else needs.  Let her handle it.

If she wants to know how, let her write to me!

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Readers: What’s your beef?  What drives you craziest about life at your nonprofit?  Is it the Board member who talks big and then disappears?  The program officer who tells you to write your proposal a certain way and then berates you for its content?

E-mail your problems to the Nonprofiteer, subject line “Where’s the beef?” and she’ll solve them for all the world to see.


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