A Tutorial with Hilda Polanco, FMA

Transcription

1 Models and Components of Great Nonprofit Dashboards A Tutorial with Hilda Polanco, FMA Sponsored by: Tweet us! #HildaOnFinance

2 Operational excellence is an organizational culture that values learning, problem solving and a strong commitment to continuous improvement Key component: Performance Measurement 2

3 By actively engaging in performance measurement, an organization: Aligns definitions of success across the organization Encourages dialogue about progress toward goals Facilitates timely identification of successes and challenges Grounds decisions in concrete data and evidence Illuminates relationships between different activities 3

4 Identify areas for improvement and develop a plan Define Tie what you measure to intended impact Refine Implement Be consistent in data entry and interpretation Establish mechanisms to understand what is working and what isn t Evaluate Monitor Track trends in metrics as well as process 4

5 Dashboards that effectively communicate strategic-level results: Should be presented in a user-friendly visual format: Create a snapshot of current status as well as trends over time Clearly show performance against defined targets Highlight out-of-the-ordinary results Include a manageable set of Key Performance Indicators (KPIs) The goal is to support planning and decision-making 5

6 Key Performance Indicators (KPIs) Successful KPIs will: Represent business model drivers Reflect progress toward intended outcomes Guide priorities and decisions ( what gets measured gets done ) The Key in KPIs is important: limit total KPIs to a number that can realistically be monitored A set of KPIs isn t forever: metrics should be periodically reassessed 6

7 Strategic Goals Sources of Revenue Expense Structure Program Delivery Model 7

8 What type of revenue drives the business model? How reliable/predictable are these revenue streams? Contributed Individual donations Foundation / corporate contributions Special events Earned Fee for service Program fees Sales Government Fee for service Reimbursement grants Performance contracts 8

9 What are the key cost categories to watch? What aspects of program delivery are driving results? Human capital Enrollment levels Facilities Supplies / Inventory Member, subscriber, or customer engagement Process efficiencies 9

10 DASHBOARD EXAMPLES 10

11 KPIs for the entire organization OR One or more priority areas 11

12 A dashboard complements financial reports without replacing them Management Narrative Balance Sheet Budget vs. Actuals Year-end Projections Cash Flow Projections Performance Dashboard Webinar Recording: Understanding What Financial Model Your Board Needs: 12

13 This multi-service organization provides a range of youth-based programs for the community it serves, including an early childhood education program. Revenue for this program is a mix of government contracts and tuition/program fees. Key Driver: Enrollment Levels Key Performance Indicators 1. Monitor the program s Operating Surplus (Deficit) 2. Track Program Enrollment and attendance 3. Track revenue from Program Fees 13

14 Dashboard: Early Childhood Education Program

15 Zooming in: Early Childhood Education Program 15

16 Designated as an FQHC, this Community Health Clinic offers medical, dental, and behavioral health services to the rural population it serves. Revenue sources are a mix of patient fees, Medicare/Medicaid, and payments from private insurers. Key Driver: Operational Efficiency Key Performance Indicators 1. Monitor the Operating Surplus (Deficit) by business line 2. Track Access to Capital, including reserves, cash flow, and debt levels 3. Analyze the efficiency of the Revenue Cycle 4. Track the Cost per Patient Visit 16

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18 Zooming in: Community Health Clinic 18

19 This Community Development Organization increases homeownership rates by making low-interest loans, providing credit counseling, educating first-time homebuyers, and rehabbing dilapidated properties. Revenue is a mix of earned income and government contracts. Key Challenge: Achieving revenue self-sufficiency for each business line Key Performance Indicators 1. Track Cost per Customer for each business line 2. Track the Profitability (i.e. surplus/deficit) of each business line 3. Monitor Earned Revenue by business line 19

20 Dashboard: Homeownership Organization 20

21 Zooming In: Homeownership Organization Key Strategic Question: What defines success for the lending business line? Is it meeting or exceeding the sustainability goal that has been set? 21

22 With a mission of making dance more accessible to the public, this organization has both a dance company and a school. Their goal is to increase revenue so they can afford to hold more free performances for the community. Key Challenges: Optimizing pricing and maximizing attendance Key Performance Indicators 1. Analyze Median Revenue per Performance 2. Monitor Enrollment in the summer workshop series 3. Track the Retention Rate at the academy 4. Monitor the Percentage of Performance Weeks where they are able to offer a free public show 22

23 Dashboard: Performing Arts Organization

24 This community-based organization works in the areas of literacy, youth, and advocacy. It is funded primarily by restricted foundation grants, with some additional income provided by individual donors and board members. Key Performance Indicators 1. Track restricted funding raised by program and the Gap still to be Raised 2. Track progress toward Individual Donor revenue goals, by category 3. Monitor rate of Board Member Giving 24

25 Dashboard: Fundraising 25

26 Zooming In: Fundraising Dashboard

27 JUMPSTARTING DASHBOARD DEVELOPMENT 27

28 Start with the Big Picture Understand the target audience for the dashboard: is it the Board? Start Leadership? Program managers? Explore and understand your organization s business model drivers Determine KPIs in an inclusive, team-based process Begin to cultivate a culture of data driven decision-making at your organization 28

29 Put your Dashboard Plan into Action Create a cross-functional team around data at your organization Start Define accountability for each data point being measured Set parameters about who will maintain and update the dashboard and how often it will be updated Develop the data analytics skill set of staff Choose an appropriate platform for dashboard reporting 29

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31 RESOURCES 31

32 How Hands On Atlanta Uses a Dashboard to Track Progress and Reach Its Goals, The Bridgespan Group. Why Financial Dashboards Matter, and Five Pointers to Get You Started, Neela Pal, FMA, Forbes, Hands-On-Atlanta-Uses-Dashboards.aspx Performance Measurement: Getting Results, Harry P. Hatry, Urban Institute, A Nonprofit Dashboard and Signal Light for Boards, Jeanne Bell and Jan Masaoka, Blue Avocado. center/resources-for-financial-management/pages/a-nonprofit-dashboard-and-signal- Light-for-Boards.aspx 32

33 Online Tutorials for StrongNonprofits.org FMA offers complimentary orientation one-hour webinars that feature an overview of the website and drill down on several of its key resources Upcoming webinar dates: February 18 at 2:00pm (EST) April 20 at 3:00pm (EST) To register, or see upcoming webinar dates: For a 15-minute, on-demand webinar tour:

34 Resources and Links For access to NPQ s other webinars: To subscribe to NPQ s quarterly magazine:

35 Established in 1999 to serve not-for-profit organizations around the country Provides customized financial management, accounting, software, organizational development, human resources, and other consulting services Works directly with organizations or through funder-supported management assistance programs FMA's mission is to empower not-for-profit organizations with the knowledge and skills to successfully serve their constituents and fulfill their missions Hilda Polanco, CPA, CCSA, CGMA New York Chicago San Francisco LA /FiscalManagementAssociates linkedin.com/company/fiscal-managementassociates-llc