How does your nfp fare in these economic times?

Glastonbury Child and Family Services was recently reported in local media.Glastonbury is reported to be experiencing financial difficulties due to the economic downturn. Many programs are funded from Glastonbury's reserves, according to CEO Judy Wookey; these programs are under threat and may result in workers being deployed.

How is your organisation faring in these difficult times? Have you invested reserves in non-bank organisations? Are those funds accessible or frozen?

It is to be expected non-profits will have in place a policy and framework to guide the board and management on investment decisions. Afterall we are trustees of those funds we hold. The problems can begin when economies go into freefall. Decisions made in the past, when stability reigned, can be inadequate in these changing times. Of course, the economic decline has been in place for a while and many organisations have felt the impact - yet there is likely to be more pain before stability returns. If your board hasn't looked at its policies and applied a risk management analysis to its funding and reserves then now might be the time to do so. Better late than never.

An investment policy should contain clear guidelines on objectives such as investment types, timeframes and even levels of return on investment, details on who is responsible for investment decisions and reporting processes and even costs. While it is clear the management team must take responsibility for any losses incurred, equally so must the board or committee. It is a responsibility of the governance team to have in place risk management process, which should include an analysis of risks associated with financial investments.

Government funding bodies have a responsibility to ensure adequate funding of programs delivered by social service agencies on behalf of the government. In the case of programs funded through non-government means the responsibility for fiscal conservatism falls squarely on the shoulders of the board and management team.

It is rare for financial calamity to occur overnight. When it does occur, hindsight, wonderful as it is, will almost always show that a series of 'key events' occured, which if they had been monitored and given appropriage analysis would have served as a flag to management that whatever was being done wasn't working and that it was time to do something new. Every non profit has the opportunity to avoid financial disaster. Does your organisation have the experience and skills amongst board members and managers to spot the trends, to analyse the data and to make proactive decision?

Let The Journey Continue
John Coxon
Taking You From Frontline Manager to CEO
Email john@johncoxon.com.au
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