Date: February 7, 2014

1. Your YWCA Finances…What Board Members Need to Know Rita Ryder, YWCA USA DAS Date: February 7, 2014

2. Welcome!! • Introductions: • Your name • Your YWCA • Your role • What’s a key financial issue/question you’d like us to address today?

3. The “Board Hat”----Duties • The Duty of Care • A standard of competence—”prudent person” • Stewardship of the organization • The Duty of Loyalty • A standard of “faithfulness” • Undivided allegiance when making decision • Don’t use information for personal gain • Act in best interest of the organization • The Duty of Obedience (or “Compliance”) • Faithfull to the organizations mission • Assure adherence to laws • Public trust and stewardship

4. Who’s Responsible for the Money?No Money, No Mission!! Board: Critical Fiduciary Responsibility • Safeguard financial assets and legacy • Assure that funds spent appropriately • For charitable purposes, mission, goals • Achieve impact • Account for appropriately • Fundamental CEO/ED responsibility • Design/Implement financial policies, systems, practices • Financial planning, recordkeeping, reporting • Financial performance Financial Vitality----key to Board + CEO/ED success!

5. Strong Financial Stewardship: A Blueprint

6. Key Board Question How does the Board fulfill it’s governance responsibility to secure financial vitality for its YWCA while.... Avoiding MMM (the micro management mode)?

7. Board/ED Points of Financial Oversight The Annual Budget Plan $ Key Data Analysis Trends “Dashboards” Monthly Budget Reports Annual Audit Asset Reports Annual Audit

8. 1. Your YWCA Annual BudgetWhat Do The ED and Board Need To Know? • Are We Putting Our Money Where Our Mission Is? (especially our “investment” dollars) • Does Budget Support Financial Health(living within means)? • It’s a “balanced” budget • Revenue realistic (esp. fundraising, grants) • Expenses realistic • Appropriate infrastructure/administrative support • Consistent with our Strategic Plan • Are We Making Effective, Efficient Use Of Funds? • Cost per client served • Cost per “unit of service” e.g. bed-night care) • Cost per outcome achieved • Are we “to scale”? Trends……. Risks……..Opportunities

9. Numbers to Look At: Annual Budget

10. A YWCA Budget Process(Illustrative) Board/Finance Committee Approve Budget Assumptions CEO/CFO Prepare Budget Assumptions CEO Reviews Outcomes, $ Performance Finance Committee Reviews Staff Drafts Budget (+ Analysis) Board Reviews, Approves Implementation, reporting

11. 2. Monitoring Your YWCA Annual BudgetWhat Do The ED and Board Need To Know? Is Our Budget Performance on Target? • Actual revenue/expense to date….esp. “key drivers” • End of year projections/forecasts • Explanation of variances If Not, What Are Our Corrective Action Plans? Important ED/CEO Responsibilities: • Report timely, accurate information—with analysis • Come to grips with issues: be direct and honest with Board • Come to the Board with approaches for dealing with problems

12. A Reporting Approach(Illustrative)March, 2014 (25% of budget year) Narrative: Explain key variances (e.g. large line items, + or - 5%) Plan for addressing key variances, achieving a balanced budget by year-end

13. If You’ve Got A Problem..What Kind Is It? • Is it a short-term or one time budget issue? e.g. • A short gap in government grant funding • Costs of gearing up a new program/ending an old one • Temporary drop in service levels Or…… • Is it a “structural” budget problem? • Your basic budget just doesn’t work. Expenses significantly exceed income • Too many programs, programs not designed efficiently, too dependent of unstable revenue sources • Budget too small to justify overhead • Facility costs, deferred maintenance increasing

14. So You Have a “Structural” Budget Deficit??Recalibrating Tools. Not Rocket Science, But Hard to Implement Reduce Expenses Increase Income RE-EVALUATE PROGRAMS

15. Some Budget Balancing Approaches • Increase Revenue • New grants e.g. veterans • Expand fundraising • Maximize assets e.g. rental space • Expand client income mix e.g. childcare • Change program model/increase fee income e.g. housing • Explore Efficiencies/Cost Reduction • Technology advancements e.g. payroll, hr, fr • Outsourcing admin functions • MSW students, interns • Strategic Alliances • Reassess Programs: Focus, Prioritize • MacMillan Matrix: Relevance, Fit, Competitive Position, • Economic Viability

16. 3. Your Annual AuditReviewing and Accepting • Reliability Of Financial Records, Systems • Reporting of your numbers (statements) • Unqualified or qualified • Notes • Management letter • Questioned costs • Your YWCAS Financial Health (Analysis) • Annual result positive? • Do you have sufficient of cash to pay bills? • Are you overly dependent on Gov’t. funding? • Assets growing or declining? • Administrative support/costs---just enough? • Trends Process: Audit/finance committee reviews in detail; Board hears report from auditor, senior staff: Reliability + Health

17. Some Ratios to Measure Your Financial VitalityFrom Your Audit or 990

18. 4. Reports on AssetsMonitor and Steward Your Assets • Investment Reports—Are we prudent, Productive? • Policies and performance • Investment of funds by asset class • Earnings, and earnings compared to benchmarks • Buildings and Facilities • Condition • Maintenance/replacement needs • Value • Investment plan

19. Some Final Thoughts • Timely reports, with analysis: critical to the Boards governance and Instills confidence: Board, CEO, community • Structural budget problems don’t fix themselves, get worse • YWCAs assets: our legacy, our future. Don’t: • Invade the Endowment Fund • Borrow against assets e.g. refinance your building • Neglect your property….defer maintenance • Support ED/CEO: training, staff/volunteer resources; problem solving (and avoid MMM) • Celebrate your progress towards financial vitality!

20. Some Resources • YWCA USA. www.ywca.org. Go to “Intranet”. • Click on “Resource Library” then “Financial Vitality”. • Click on “Training and Events”, then “Webinar Documents” for Fundraising, Grant, Financial Management sessions. • Council of Non-Profits. www.council of nonprofits.org • Non-Profit Finance Fund. www.nonprofitfinancefund.org • Board Source. www.boardsource.org • American Institute of Philanthropy. www.charitywatch.org • Guidebook for Directors of Non-Profit Corporations, Third Edition. American Bar Association, 2012.