By Emily Rangel, CHHS Intern for NPC
This article by Hilda H. Polanco and John Summers, published by Nonprofit Quarterly, offers insight on a familiar topic to the Nonprofit community: the question of funding, where the funding comes from, and the expectations of allocation of those funds. One could benefit from reading this article since it covers topics such as ‘What do we do?’ which is equivalent to saying “What do we spend on our money on?”; ‘How are we funded?’; ‘Balancing cash in and out’ and ‘Cash balancing in and out’ of the organization.
“This article will discuss ways in which cash flow impacts and is impacted by the way a nonprofit organization does its business. Each component of the nonprofit business model and the delivery model, and the funding model has implications for organizational cash flow that should be understood for effective financial planning. This article explains and provides advice for allocation of funds throughout the year based on stability, predictability, and consistency of the organization; some organization have relatively stable, predictable, and consistent cash needs throughout the year, while other organization may have planned events throughout the year which surge need for funding during the time of that event, there is also an organization that unexpectedly require a surge of funds during emergency events. Looking at the ‘how are we funded’ side of the business model can give us a better sense of what to expect in terms of cash inflows and what to do if they don’t line up with the ‘what do we do’ side. Each type of income stream tends to have particular implications and challenges for cash flow, so a business model built primarily around one type of funding will need to understand and plan for those implications and challenges”. READ MORE HERE