Podcast — Nonprofits are no strangers to challenges, but the past few years have brought an entirely new level of unpredictability. From shifts in government funding to changing donor behavior, organizations face a range of “unknowns” that can impact both operations and mission. In a recent episode of Q&A Over Coffee, audit principals Pat Powers and Daniel Owens shared their perspective on how nonprofits can adapt and thrive in uncertain times.
Understanding the “Unknowns”
Budgeting for Multiple Scenarios
Communicating With Boards and Donors
Key Metrics to Monitor
- Liquidity (cash reserves): How many months of expenses can be covered?
- Current ratio: Current assets ÷ current liabilities; ideally above 1.2.
- Debt service obligations: Keep an eye on balloon payments or refinancing risks.
- Unrestricted vs. restricted net assets: True operating flexibility depends on unrestricted funds.
- Fixed vs. variable costs: Know which programs can scale up or down quickly.
Lessons From the COVID Era
Key Takeaways
While the future will always hold surprises, nonprofits that strengthen their budgets, communicate transparently, and lean on both staff and board leadership will be better positioned to carry out their mission.
Minnesota Council of Nonprofits: https://minnesotanonprofits.org/
Guests:
- Patrick Powers, CPA – Audit Principal and President of Olsen Thielen
- Daniel Owens, CPA – Audit Principal and Head of the Audit Department
