Beyond Numbers – Strategic Financial Management for Nonprofits

It’s not just you: Nonprofit financial management is difficult for several reasons. Even experienced finance industry professionals can struggle to understand the financial structure of a nonprofit whose board they join. Despite this reality, a little information goes a long way for board members trying to understand and engage with nonprofit finances.

This was the main theme of Brent Copen’s financial management presentation for select nonprofit board members. Previously recognized for his outstanding teaching, Brent is also the CFO of Tiburcio Vazquez Health Center in Union City, CA. He has worked with hundreds of nonprofit organizations through the years. He recently led a training as part of our Berkeley Board Fellows program.

Brent Copen presents to Nonprofit Board Members

Brent’s presentation contained real-world examples, activities, and tools for board members. Here are three brief but important points among many from the presentation.

Kat Taylor – Lessons in Community Banking

Event: Kat Taylor Shares Leadership Lessons at Berkeley-Haas
Main Speakers: Kat Taylor and Ben Mangan
Date: Thursday, April 16, 2015

On April 16 Kat Taylor, Co-Founder and Co-CEO of Beneficial State Bank, shared her experience and vision as a leader of the social enterprise bank. Beneficial State’s mission is simple – that banking can once again be about people interacting with people for the sake of economic growth and opportunity, in a healthy way.  Under her leadership, Beneficial State is trying to move banking back to main street, for the benefit of all. Some highlights from her comments:

Kat Taylor's passion for #socialimpact makes us want to be bankers @BeneficialState. Thx for the inspiration! pic.twitter.com/rGWpUimPeI

— ImpactMBA (@ImpactMBA) April 17, 2015

Was the Walmart Pay Raise Real Leadership?

Walmart made waves last week announcing  pay increases for their workers. The Wall Street Journal cast this as a pure labor market move – prompted by an increasingly competitive environment for retail workers. Walmart, of course, promoted this as a double-bottom line move that reflects the needs of their workers as well as something they need to do to remain competitive.

So, which was it?.

This shift provides an interesting lens through which to explore what leadership really is, and what meets the test for different types of leadership.

What is effective business leadership when you run one of the largest employers of low wage workers in the world and serve primary segments that are low and moderate income?

What is moral leadership in this context?

Can the two intersect when groups of large shareholders might believe a wage hike to be a violation of managers being fiduciaries? (It’s notable that WMT’s share price took a hit right after this was announced).

I actually believe it was an authentic expression of both effective business leadership and moral leadership. Walmart has taken a beating from the left for years because of the way it treats workers – and rightly so. They have traditionally paid very poorly, and have had a business model with incredibly high attrition rates for workers – signalling that they have a view of their workforce as heavily commodified, perhaps at the expense of being as humane as needed.

To me, the pay increase is a signal of an authentic shift. I believe this for three primary reasons:

Alumni Spotlight – Jennifer Kawar, Director, Nonprofit Finance Fund

Jennifer Kawar, BS 82

Jennifer Kawar, Haas BS 82, admits that working for the social sector wasn’t her focus while obtaining her undergraduate degree from Haas and her MBA from Columbia University Graduate School of Business.

It was after 14 years of experience in the “mainstream” of financial services, working in  business development, underwriting, portfolio management and credit administration for financial institutions like TIAA-CREF, GE Capital and Bank of America, while devoting her energies to family and community, that Jennifer reflected on how she could better use her business education and experience to effect change in the social sector.

Her move into the social sector.

“People with training in accounting and finance have largely been deployed to Wall Street or corporate America, toward managing assets for individuals or corporations that have accumulated wealth,” she said. “I wondered what might be possible if we re-deployed some of that talent to help those who don’t have ready access to capital and financial advice.”

Community Partner Spotlight – ImpactAssets

ImpactAssets
http://impactassets.org
Ron Cordes, BS 81, Founder and Board Member

Like many successful new enterprises, ImpactAssets began as a way to address an unmet need. Ron Cordes, Haas BS 81, needed advice on investing the assets of his new family foundation. He quickly fell into what he calls the “5% – 95% conundrum”. Advisors pushed the foundation to have a grant budget equal to 5% of its assets and invest the rest. “Why can’t we have an impact with our other 95%?” Ron pushed back. The answer to that question led to ImpactAssets, a nonprofit financial services company whose mission is to build the field of impact investing and provide investment opportunities to a wide range of investors.

Ron Cordes, BS 81

ImpactAssets is a 501(c)3 nonprofit public entity designed to be a field builder and to create an ecosystem to benefit the field and the public at large. It is also a financial services company committed to being financially accountable with a sustainable revenue model based on earned income. It manages $150 million in assets, having surpassed an initial goal of $100 million last year. It engages the field in two main ways;

1. acting as a catalyst, promoter and supporter of impact investing, and
2. democratizing impact investing by providing financial products accessible to small investors.

Social Impact Career Mentoring for Current Haas MBA

Ben Hamlin, a current Haas MBA, attended a a social impact career mentoring session on February 22nd with Wes Selke, a Haas alum. Wes, who graduated as a Haas MBA in 2007, is the Founding Director of Hub Ventures, a start-up accelerator for entrepreneurs leveraging the power of technology to build a better world, and has much experience in the social sector.

Ben Hamlin Haas MBA

“Wes was the perfect person to speak to given his career to date and involvement with Haas.  His extensive experience in both the for-profit and non-profit sectors enables Wes to provide balanced advice to change seekers.  Moreover, Wes is an active Haas alum and knows how Haas can help students achieve their goals.” – Ben Hamlin

Wes shared how he had bridged the gap between his career in finance and the social sector as Ben works to make that transition. He was the ideal person to speak to about how to leverage all of Haas’ resources and was able to help Ben in his process of deliberating for potential summer positions by sharing what his own thought process had been.

“As a mentor, Wes really showed that your career path is long; the the position you get before or after business school does not define your career. There are a lot of ways to approach social impact in one’s career.”

Career mentoring is a program facilitated by the Center for Nonprofit and Public Leadership for students who are interested in social impact careers.

From Potential to Action: Bringing Social Impact Bonds to the US

March 6, 2013

Haas School of Business, UC Berkeley

Schwab Charitable Philanthropy Speaker Series: Social Impact Bonds

Social Impact Bonds (SIBs) are at the forefront of financial innovation for scaling proven social impact programs. Laura Callanan, author of McKinsey & Company’s ground-breaking report on SIBs, will examine this new outcome-based approach to scaling and the role played by each stakeholder group: government, nonprofits, impact investors, and evaluation advisors. Carla Javits, CEO of REDF, will discuss her organization’s proposal to implement a pay for success program in California.

There is considerable buzz about