Big Picture Financial Planning for Nonprofits (part 5 of a series)

Big Picture Financial Planning for Nonprofits (part 5 of a series)

by Tom Wilson Major Gifts Guru

So we’ve got a challenge grant to motivate the lead donor and matching gift donors to help put in place the key elements of financial stabilization – a balanced budget, a 5% contingency, no debt, and 6 months cash reserves. What’s next?

As organizations began to implement stabilization plans, the fiscal discipline was artistically stifling. You could only do big money makers, like Nutcracker performances. You needed to make money and avoid risks to keep your budgets balanced and to build contingency funds and reserves.

As an enhancement to the process, an artistic venture fund line item was added to the stabilization model.

This venture capital, this risk capital fund line item created an exciting vision for a future artistic project that would take place only when funded in advance. Ideally, you set up a pool of capital that could be used periodically to take advantage of exciting opportunities that the stabilization model would normally preclude you from doing.

I was working with one chamber music group. We had set up the stabilization model and showed it to one of their primary donors. Steve was pleased to see we had a financial plan but really got excited when he saw the venture fund line item. He agreed to provide $100,000 of his estate to kick off the fund. While quite young, Steve had ALS and knew that his gift would come sooner than later.

It was a real winning gifts concept for him.

To read the rest of the series, please see below:

Permanent Link: Big Picture Financial Planning for Nonprofits (part 5 of a series)

http://majorgiftsguru.com/2009/05/big-picture-financial-planning-for.html

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Big Picture Financial Planning for Nonprofits (part 5 of a series)

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