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.

From Charity to Change: A Dynamic Approach to Building a Better World

By Joe Dougherty

On the first day of December, Mark Zuckerberg and Priscilla Chan celebrated the birth of their daughter, by announcing their intention to direct 99% of their Facebook shares to a new philanthropic venture, the Chan Zuckerberg Initiative, which will seek to “advance human potential and promote equality.” The announcement was met with a fair amount of criticism, mostly centered on the couple’s decision to make the Initiative a (potentially profit-making) corporation rather than a private foundation, like the Bill & Melinda Gates Foundation. Critics like ProPublica’s Jesse Eisenger point out that Zuckerberg and Chan did not donate to charity but rather, “created an investment vehicle” which is subject to fewer legal restrictions than a nonprofit or a foundation and thus leaves Zuckerberg “completely free to do as he wishes with his money,” including investing it in profit-making ventures. This observation is certainly true… and it was certainly a good move for Zuckerberg and Chan, if they truly wish to advance human potential and promote equality.

Here’s why: Charity, traditionally, is how the social sector helps meet a need that government or private companies don’t address – like sheltering the homeless or helping former prisoners find jobs, for example. This type of direct charity is important and, unfortunately, still very necessary. But most foundations – even well-established ones like the Rockefeller and MacArthur Foundations – have long since moved beyond traditional charity to seek lasting social change. Instead of just feeding the homeless or helping former prisoners, they are also addressing the root causes of homelessness and asking why so many people are in prison in the first place. Rather than perpetually filling the gaps left by government and markets, modern philanthropists are exploring whether governments and/or the private sector can permanently close those gaps. This is old news, and most people would agree that it makes more sense to look for sustainable solutions rather than stop-gap measures – in other words, philanthropy should not simply apply band-aids to society’s wounds but rather, help create a healthier society.

3 Steps for More Impact Investment-Ready Organizations

By Katherine Murtha

“As impact investing comes into the mainstream, there are not enough investment-ready enterprises able to absorb the amount of capital that impact investing is poised to generate.” Dr. Judith Rodin, remarks at Aspen Ideas Festival, June 2014

“All levels of government are facing steeper costs on health care and pensions, where the relentless demographics are just grinding down on all other items in the budget.” – A former state government CFO quoted in Bridgespan’s report, January 2012

A dearth of impact investment-ready deals. Diminishing government funds for social sector organizations. These are big challenges. This week, Nonprofit Finance Fund’s CEO Antony Bugg-Levine and VP Bill Pinakiewicz shared solutions that might address both. They suggested three ways for funders to help social enterprises remain viable and create value for investors.

1. Help social impact organizations understand the new paradigm. The possibility is very real that traditional public funding for nonprofits will not bounce back.
2. Help social enterprises and nonprofits adapt to this new funding landscape. Enable them to focus on the measurable outputs that impact investors like to see and adjust their business models to take advantage of government incentives for achieving metrics.
3. Strengthen social impact organizations. Invest in their adaptive capacity or organizational effectiveness – give organizations tools to understand their finances, improve their capital structure, and measure outputs.

Ben Mangan to Lead the Center for Nonprofit and Public Leadership

By Nora Silver, Faculty Director

“We commit to take action.”
That’s the title on the certificate Ben Mangan is holding as he stands beside Bill Clinton at the Clinton Global Initiative in 2013 (pictured below).

Ben brings that promise of action to his new role as the 2nd executive director of the Center for Nonprofit and Public Leadership at the Haas School of Business, UC Berkeley.  He was chosen from among an exceptionally strong candidate pool. Exciting ideas Ben brings to the Center include:

• democratizing social entrepreneurship by providing access to Center resources for budding, but still unknown, social entrepreneurs around the globe
• becoming a regular destination for top talent – inviting visiting fellows from industry to teach and learn with students
• applying lean launch principles to social start-ups
• offering groundbreaking social impact convenings and executive education

Ted Kuh’s Path to Lifelong Learning

Alumni Spotlight: Ted Kuh, Haas BS 82; Wharton MBA 87
Lecturer and Advisor-in-Residence, Haas School of Business
Advisory Board Member, Center for Nonprofit and Public Leadership

 

“I left banking to pursue new passions such as teaching and getting involved in the start-up community. I am a firm believer in lifelong learning and am certainly learning a lot from my students, I hope to continue learning from different people and different cultures.”

Lifelong Learning: A Structured and Unstructured Path

There are times when the defined and well-lit path is worth following. My 24 year investment banking career offered excitement, world travel, exposure to new cultures, and the challenge of developing a new business.  I was entrepreneurial with the support and resources within a large organization. My best professional decision was to work abroad to lead Citi’s Global Retail investment banking effort, first from London then from Hong Kong.  All told I spent 10 years abroad and had an extraordinarily rich professional and personal experience.

In 2009, I relocated back to the Bay Area, where one of my goals was to re-engage with Haas and my community, as well as to

Prove it: How Gates Ties Strategy to Results

Schwab Charitable Philanthropy Speaker Series

Schwab Charitable Philanthropy Speakers brings together leaders from the philanthropic community with Haas students and alumni in a yearlong speaker series that tackles cutting-edge issues in the world of philanthropy and explores best practices for social impact.

September 30th, 2010

Location: Wells Fargo Room

Featured Speakers:

Jodi Nelson, Interim Director

Emily Parker, Senior Strategy Officer, Impact Planning and Improvement

 

Pictures from the lecture: