Tucker Tells Boston Globe – Cash Flow is Key To Surviving the Nonprofit Storm

Jun 15, 2016
Accounting Management Solutions

Article originally published in the Boston Globe June 7, 2016
By Wayne J. Taylor

“I hope it doesn’t rain tomorrow,” the executive director of a nonprofit was once heard to say. “We’re having a golf tournament fundraiser and we need the money to meet next week’s payroll.”

This may sound like a comic one-liner, but it’s a true story. It was relayed by the head of another nonprofit and illustrates some of the serious challenges facing many organizations in the nonprofit world, especially among charitable nonprofits.

The challenges for these organizations, simply put, are limited resources, growing community needs, and the increasingly heavy burden of governmental scrutiny. The issue for most involves the balancing act of maintaining their commitment to their mission against the hard realities of capacity and capital constraints.

The resource squeeze

“The single-most challenging issue for us on an annual basis is being level-funded or less-than-level-funded when our participants’ needs only become greater,” said Roslynn Rubin, CEO of Greater Waltham ARC (GWArc). Founded 60 years ago, GWArc continues to successfully weather the financial issues that are unique to nonprofits.

The GWArc, one of 700 Arc chapters in the country, annually serves approximately 300 adults with intellectual and developmental disabilities and their families in Waltham and its surrounding communities. GWArc’s chief funding resources are Medicaid and the Massachusetts Department of Developmental Services.

As participants with disabilities age, their needs become more demanding, particularly with changes in their mobility, communication, and daily living skills, Rubin explained. As a result, GWArc and its counterparts elsewhere in the social service arena need more financial resources for things like staffing, training, adaptive equipment, and technology.

“This is challenging when we are getting the same or less from our chief funding sources,” Rubin said.

“We are competing with other nonprofits for a piece of the fundraising pie, but the pie has a finite number of pieces.”

Leigh J. Tucker, managing director, Nonprofit Client Practice, principal, at Waltham-based Accounting Management Solutions, agreed: “Governmental funding ebbs and flows according to budgetary imperatives, but the needs of the nonprofit sector and the people they serve remain unchanged.”

This sentiment is emblematic of the entire nonprofit sector.

“Sustainable funding continues to be our greatest challenge,” wrote a respondent to the National Finance Fund’s most recent survey on the state of the nonprofit sector. “Our actions to address this challenge include developing and adhering to a strong and dynamic strategic plan; diversifying our program funding streams as much as possible; developing and communicating a strong community impact statement for our programs; and focusing on increased donor engagement in order to increase fundraising dollars.”

In many ways, this could be Roz Rubin’s job description at GWArc, as many nonprofits—particularly smaller ones—simply don’t have the deep staffing resources to devote to generating grants and developing donor relationships.

“It often falls to an organization’s executive director to lead this chargeto get out into the community and form strategic partnerships that will lead to an increase in charitable giving,” said David Felton, vice president and senior business banking officer at Rockland Trust Company, whose clientele includes GWArc and a number of other Greater Boston-area nonprofits.  “They wear a lot of hats. They’re not just managing the day-to-day operations of their organizations; they’re out there promoting them.”