Our mission is to build financially healthy nonprofits, and now more than ever, we want to offer sound and practical advice to help nonprofits build sustainable futures.  Last issue, we wrote about the anxiety around the economy and shared some ideas on how organizations can manage and adapt during these uncertain times.  Sound and practical does not mean pretending we can predict the impact of the current economy.  Right now, the best advice we can offer to nonprofits is to protect your assets.

We mean assets in the broadest sense.  As a financial management organization, we encourage nonprofits to carefully manage their cash flow.  However, there are assets that do not appear on your balance sheet - your organization's reputation.  Safeguard that important, and intangible, asset above all else.  The best way to do that is to focus on your mission and doing your work as effectively as possible.  Tell your story, communicate with your donors, control what you can control, and deliver on your mission. 

To help you navigate this unpredictable time, we have posted a collection of useful articles and resources to our facebook page.  If you are interested in understanding how we got here, invest $1 for the podcast of This American Life’s radio show on the topic, “The Giant Pool of Money” from May 2008. Jointly produced with NPR News, the 60 minute report explains how the mortgage business changed with subprime loans, new capital sources, and new, indecipherable investments. It's a useful and illuminating overview.  

Managing Restricted funds

Unique accounting standards require that nonprofit organizations report contributed income in one of three categories - unrestricted, temporarily restricted, or permanently restricted. These different income classifications are determined by either the absence or the existence of donor-imposed restrictions on use of funds. It's helpful to start with the premise that while restricted contributions and grants pose financial management challenges, these sources of funds for program and organizational support are important and desirable for nonprofits.

Beyond definitions, this comprehensive resource article aims to explain unrestricted, temporarily restricted, and permanently restricted income and give nonprofit leaders the tools to record, report, and effectively manage contributed income and net assets.

Upcoming Workshops

calculating True Program Cost

Tuesday, October 21, 9:00 a.m. - 12:00 p.m.

Do you know what your programs cost? Are you sure they are fully funded? This workshop focuses on allocating direct and indirect expenses and calculating the true cost of your programs. This holistic approach to program budgeting will help your program staff be good managers, your development staff write effective grants, and is essential for compliance on your 990. The workshop is geared towards those needing an introduction and overview of allocations and program budgets.  

Register today and begin implementing healthier financial practices at your organization.

Financial Management network

And don’t forget to participate in our monthly lunch series for nonprofit leaders, the Financial Management Network. Join us at noon on Wednesday, October 22, to share thoughts and ideas with your peers on this month’s topic,  Using Lines of Credit, Loans, and Mortgages. Just bring your lunch, your business cards, and your ideas.

Learn more about our workshops and other upcoming events.

More than a Loan

Urban Homeworks uses affordable housing as a tool to reknit the fabric of community in some of the Twin Cities most at risk neighborhoods. Working with the City of Lakes Community Land Trust (CLCLT) and Lutheran Social Services (LSS), they have launched an innovative pilot program, Project: Reclaim, to respond to the foreclosure crisis in North Minneapolis. Urban Homeworks and its partners are adapting by shifting to a people and community focused approach. Project: Reclaim plans to transform vacant, foreclosed homes into quality and affordable housing stock and help committed individuals and families position themselves for homeownership.

Project: Reclaim invests in both the homes and buyers, believing improved housing stock and better financial education will make a difference in these communities. Urban Homeworks and CLCLT focus on keeping the homes affordable. For example, during renovations Urban Homeworks uses green materials and increases energy efficiency in an effort to keep future costs low. LSS provides financial counseling and customized credit correction plans to help buyers qualify for conventional mortgages. Project: Reclaim hopes that improving financial management will position the buyers for successful long-term homeownership with a conventional mortgage. In the meantime, they are able to move into the homes and begin making payments under a very favorable contract for deed. When the buyer has sufficient credit, they refinance and purchase their home at an affordable rate.

Project: Reclaim requires an upfront infusion of capital to purchase and renovate the homes. When the homeowner is able to refinance, this money can be used to begin work on another home. Nonprofit Assistance Fund believed in the importance of this project, and understood the business model that would make it work. Nonprofits Assistance Fund approved a loan of $100,000, which will finance work on two homes. Hopefully the success of this pilot program will allow Project: Reclaim access to additional capital to expand the program. By combining the expertise and reputation of each partner, this innovative and holistic program hopes to address the destabilizing cycle of foreclosure and vacancy.

For more information about how a loan could help your organization, including some basic guidelines on how to use borrowed funds wisely, please visit Loans.

About Us

• Highlights from the MCN Conference - Building a Nonprofit Social Enterprise
• CDFI Fund Grant Award
• New Ways to Share Financial Management Tips and Resources

Highlights from the MCN Conference - Building a Nonprofit Social Enterprise

Each year we look forward to connecting with our peers and learning about new topics at the MCN conference. This year's timely topic, Nonprofits and Government: Partnerships and Policies in a Time of Retrenchment helped nonprofits position themselves for the future by building relationships and exploring new strategies, such as social enterprise. 

We had a full room with 70 attendees for Kate's popular breakout session, Building a Nonprofit Social Enterprise. Hopefully you found the content about this earned income strategy useful and information.  A special thanks to Kate's co-presenter, Mike Wynn, Executive Director of Emerge Community Development, a successful social enterprise. If you would like to learn more about social enterprise, but were unable to attend the session, read Kate's blog on the topic and stay alert for details about a new Social Enterprise Network that will be launched in partnership with MAP for Nonprofits. 

Thanks as well to everyone who stopped by our booth.  We really appreciated the opportunity to answer questions about nonprofit finance, discuss our programs, and hear your stories.  If you did not have an opportunity to connect with us, please contact us with any questions.

Finally, congratulations to all the Mission Award winners!  You are doing great work and represent the best of our sector.  Your dedication, innovation, and thoughtful approach to the challenges that face our community are inspiring.

CDFI Fund Grant Award

Nonprofits Assistance Fund is pleased to announce that we have been awarded a grant of $1,089,956 from the U.S. Department of Treasury's Community Development Financial Institutions (CDFI) Fund. This additional loan fund capital will allow us to help Minnesota's nonprofit organizations weather economic uncertainties so they can continue to provide vital services to citizens and communities across the state.

The CDFI Fund provides Financial Assistance grants to "achieve economic and community development impact by investing in CDFIs that demonstrate the financial and managerial capacity to provide financial products and services to low-income communities and populations." Our loans provide financial support and flexibility to nonprofit organizations that serve these individuals and communities. This grant will infuse our loan fund with $1 million of capital, allowing us to offer even greater support to these critical organizations. The grant also provides $89,956 to help us with long-term planning and outreach to more effectively serve nonprofits throughout Minnesota.

See the CDFI Fund's press release and a complete list of grant recipients.

New Ways to Share Financial Management Tips and Resources

At Nonprofits Assistance Fund, we're always looking for new ways to share financial management tips and resources.  We've been expanding our online presence and we hope these additional features help nonprofits implement healthier financial practices.

We know there are people who are unable attend our Financial Management Network lunches. That's why we created a Discussion Archive on our website. Check it out for notes and resources from these discussions. Now, whether or not you are able to attend each network, you can benefit from the wisdom of your peers. 

To get a better sense of what the nonprofit community is looking for, we've giving our online resources a web 2.0 makeover.  With our new interactive feature, you can post comments and reviews.  Let us know what you think of our financial management resources and the discussion archive.  You can also comment on our facebook page or email us directly with your own insights and ideas on these topics. 

If you are interested in up to the minute tips and links on nonprofit finance, you can follow @NAFund on twitter. These comments (or tweets) are also posted to our facebook page.  Recent topics include:

• Updates from SoCap08
• SSIR's thoughts on Nonprofits and the Economy
• New 990 To Do List

2801 21st Avenue South, Suite 210, Minneapolis, MN 55407
Phone: 612.278.7180 Fax: 612.278.7181
www.nonprofitsassistancefund.org