An article in the Stanford Social Innovation Review discusses how grantmaking policies affect the financial stability of nonprofits, as researched by Michael Etzel, a partner at Bridgespan, a nonprofit consultancy, and Hilary Pennington, a vice president at the Ford Foundation. The duo developed a grantmaking pyramid which "reframes how funders and grantees think about building organizations," emphasizing the need for "foundational" support at the base of the pyramid. This strategy is now being utilized by the Ford Foundation to examine their grantmaking portfolio.
Grantmakers in the Arts defines capitalization as “the accumulation of the resources an organization needs to fulfill its mission over time,” specifically with regard to financial health. In response to the observation that it has been the norm for the nonprofit arts sector to be poorly capitalized, an issue which disproportionately affects ALAANA organizations, GIA embarked on the National Capitalization Project (NCP) in 2010. Since its launch, GIA has provided resources, conferences sessions, publications, and workshops on nonprofit capitalization. GIA’s Conversations on Capitalization and Community are specialized workshops, held separately for funders and nonprofit grantees, focusing on what each group can do to support the financial health of nonprofit arts and culture organizations. These workshops are available upon request.
The Nonprofit Quarterly has published an in-depth article on nonprofit financial capital, covering various types of capital, how nonprofits obtain capital, and various methods for monitoring and financial reporting.
From the blog of Rebecca Thomas, who delivers GIA’s Conversations on Capitalization and Community workshops, a new post provides an overview of risk capital and how it can be used by arts organizations:
From the Philanthropy News Digest:
A new article in Nonprofit Quarterly details changes to the accounting standards for nonprofits as recommended by the Financial Accounting Standards Board (FASB). The new standards are "meant to help nonprofits to tell their story more transparently through their financials" and will take effect for fiscal years beginning after December 15, 2017. Key changes include "the simplification of the classification of net assets, the tracking of liquidity, and changes in the presentation of expenses."
SMU’s National Center for Arts Research (NCAR) has released its most comprehensive report to date on national fundraising trends in the arts and cultural sector, the latest in the Center’s series of evidence-based insights on the health of the industry. It is based on 2014 data provided by over 4,200 organizations across 11 arts disciplines, with trends for a subset of over 2,700 organizations over the four-year period 2011-2014.
Upper Manhattan Empowerment Zone (UMEZ) has published a study with the Regional Plan Association (RPA), Leveraging the Power of Cultural Investments: A Report on Cultural Capacity Building. The study evaluates the impact of UMEZ’s cultural investment strategy by providing an in-depth analysis of 32 non-profit grantees over a 13-year period. The report reveals substantial gains for the organizations profiled, as well as their continuing challenges; it illustrates the concurrent growth of Upper Manhattan’s cultural and economic landscape; and it compares Upper Manhattan’s collective cultural assets to similar clusters in New York City’s other boroughs.