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Financial Management in Religious Organizations

Financial Management in Religious Organizations. Lilly Study Findings John Zietlow, D.B.A., CTP. Title of Individual Responding to Survey. TITLE Percentage: Exec. Director 30% CFO 10% VP-Finance 10% Treasurer 20% Controller 0% Chief Accountant 10%

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Financial Management in Religious Organizations

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  1. Financial Management in Religious Organizations Lilly Study Findings John Zietlow, D.B.A., CTP

  2. Title of Individual Responding to Survey TITLE Percentage: Exec. Director 30% CFO 10% VP-Finance 10% Treasurer 20% Controller 0% Chief Accountant 10% Sundry Other 30% Numbers add to more than 100% due to rounding.

  3. Primary Management Objective

  4. Primary Financial Objective #1 Ranks:Breakeven 0.4Net Revenue 0.2Cash Flow 0.1Cost Minim. 0.1Net Donations 0.1Financial Risk 0.1 1.Financial Breakeven - Still Clear Favorite 2.Maximize Net Revenue 3.Maximize Cash Flow Minimize Cost Maximize Net Donations Minimize Fin. Risk

  5. Degree of Achievement:Chief Financial Objective

  6. Main Obstacle - Better Achievement of Financial Objective Ineffective/Insufficient Fundraising – 42 % No Long-range Financial Planning - 19 % Ineffective Budgeting Practices - 6 % Poor Cost Control - 5 % Inadequate Finance Staffing - 5 % Other - 13 %

  7. Resolution of Programmatic and Financial Objective Conflict 47% Would Scale Back on Program to Meet Financial Objective 24% Would Scale Back, But Not Enough to Meet Financial Objective 16% Would Fully Implement Program 13% Would Not Implement Program At All (although proposed by Exec. Dir. or Exec. Committee)

  8. Selecting Which Programs to Initiate: Major and Minor Influences MAJOR INFLUENCES:Charter - 56%IncorporationArticles - 30%I.R.S. Exemption - 28%ExecutivePreferences - 24% LESSER INFLUENCES:Donor Surveys - 4%Client Preferences- 12%Board Preferences- 19%Pres./Anticipated Financial Position- 17%Preserve Status Quo - 2%

  9. Operating Budgets * 87% Develop and Use Operating Budget * 12% Do Not Develop & Use Budget! (versus 15% in my 1984 study) Of Those Using Budget: • 87% Include Specified Purpose (Restricted) Funds or Projects • Most of Remaining 13% Do Not Include These (but they should)

  10. Inputs to Budget Development:Check Each That Applies * Prior Year Budget - 41% * Prior Year Actual - 66% * Zero-Based Review - 16% * Anticipated Revenue - 56% * Long-range Financial Plan - 14% * Other - 8%

  11. Compute & Analyze Financial Ratios?

  12. Use Computer to Monitor or Forecast Cash?

  13. Our Bank’s Perception – Are We Using Sophisticated and Useful Cash Mgt. Techniques for Size/Type?

  14. Practice Daily Active Cash Management?

  15. Cash Forecasting Usage & Value Ranking of Uses ofthe Cash Forecast:1. Anticipate Shortages, Surpluses2. Vary Fundraising Expense, See Effect3. Anticipate Effect of Varying Revenue

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