Quick—what's wrong with this statement?
"XYZ Charity is good to give to because it spends 90 cents of every dollar on programs. ABC Charity is bad to give to, because only 75 percent of its expenses are for programs; 25 percent goes to overhead."
If you're familiar with GuideStar's position on using financial ratios to evaluate nonprofits, you know that the answer is "A lot." For starters:
Helping us to respond to these issues, our colleagues at Nonprofit Finance Fund (NFF) joined forces with GuideStar to create Financial SCANSM (Situation and Comparables ANalysis of Nonprofit Financial Health).
Financial SCAN is an online service that showcases a nonprofit's financial condition over time. It draws data directly from an organization's IRS Forms 990 and presents the information in a standardized, easy-to-read, easy-to-share report.
Financial SCAN features:
Financial SCAN is the first online service to offer comprehensive, standardized nonprofit financial analysis. Rebecca Thomas, NFF's vice president, strategy & innovation, noted, "Financial SCAN provides nonprofit leaders and their supporters and advisors with greater clarity about how to interpret and use data in decision making and strategy." GuideStar senior vice president Lee Glenn added, "We believe our user-friendly visual tool will become the new industry standard for interpreting nonprofit financial data."
Suzanne E. Coffman, April 2012© 2012, GuideStar USA, Inc.
Suzanne Coffman is GuideStar's editorial director and editor of the GuideStar Newsletter.
Nonprofit Finance Fund can help. A seasoned NFF consultant can work with you to develop a customized approach to integrating financial analysis into your engagement with nonprofits. Read more about the services they offer. To contact an NFF consultant, e-mail firstname.lastname@example.org.
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