Financial Analysis Grant
Do you understand the costs of your initiatives?
To make good decisions, you need to know how much it really costs to run your organization. Does it really make good financial sense to open a new office? Will cutting back on the program everyone thinks is high-cost really make a difference in your bottom line? To answer key questions like these, you need the right financial information, presented the right way.
Standard financial reports, however, do not give you clear information about costs. Grant accounting will not tell you how much it really costs you to get those $10,000 grants. IRS accounting might outline your functional expenses, but it will not tell you how much it actually costs to run each of your programs or sites.
Through the Financial Analysis Service Grant, our team will help you define the costs associated with important initiatives such as programs, expansion, or revenue generation. The team’s financial model will equip you with hard data for assessing past financial decisions, evaluating current costs, or forecasting future costs.
What we offer
The Financial Analysis Service Grant is unique in that you can choose which financial cost question you would like our team to solve. Once the cost initiatives have been identified and framed, the team performs an in-depth examination of your relevant financial reports and accounting, detailing cost factors relevant to those initiatives. They then prepare a comprehensive report of costs that clearly lays out for you the full costs of taking on a particular initiative.
The final deliverable, which you will be trained to maintain, will be a “living” financial model that you can easily update without worrying about keeping it frozen for usability purposes.
The estimated value of this Service Grant is $70,000.
Why it’s a win
The impact of each project varies, but you can expect to:
- Better understand the costs associated with running a particular program
- Confirm or re-evaluate current assumptions on program costs
- Strengthen your internal capacity to use and monitor the right financial data (as opposed to more financial data)
- Articulate your costs more clearly in grant proposals and reports
- Communicate cost information to stakeholders such as your board, funders, and individual donors
- Gain additional information for decision-making on cost-cutting or efficiency measures
- Make a decision about expansion, such as whether to offer services in a new city or scale back services due to cost considerations
- Use cost information to price event sponsorship fees or estimate new service delivery models
- Build a plan for more targeted revenue generation by understanding the costs of generating revenue across different streams
- Gather the financial information necessary to answer another pressing strategic question
How we get it done
The pro bono consultant team will complete some or all of the following:
- In-depth investigation and analysis of the full cost structure around a program, site, or revenue stream
- Financial model that lays out the costs of your initiative
- Training and documentation that enables you to use the model in the future
- Report that analyzes the implications of the financial model
Who’s the right fit
To be a successful client for this grant, you should have:
- An Executive Director and Board of Directors strongly committed to this project
- Staff who can invest the necessary time to make the project succeed. In some cases, the same person can fill more than one role.
- Executive Director: 10-15 hours total
- Finance Director: 15-20 hours total
- Selected Managers: 5 hours total
- Day-to-Day Contact: 3-5 hours each week
- Board of Directors Representative: 5-10 hours total
We also ask that your organization meet at least one of the following criteria:
- Locations in two or more cities
- Running two or more programs
- Two or more funding streams (streams constituting at least 10% of total funding)
The Taproot Foundation team is staffed by strategy management experts who have made a personal commitment to strengthening the nonprofit sector. Visit our pro bono consultant roles page for additional information about Strategy Management pro bono consultant roles.
Financial Analysis Examples
The following examples provide a snapshot of what previous teams have created for organizations seeking to learn more about the costs of their initiatives:
Example #1: How much does it cost to support one constituent in our system?
The Challenge
An organization that offered multiple programs and workshops to serve its constituents wanted to know how much it cost them to serve one constituent for one year.
The Solution
The Taproot Foundation pro bono consultant team developed a tool in Microsoft Excel that allowed the organization to view total program costs per constituent served as well as total program costs per hour of service. The tool also enabled the organization to calculate costs based on line items they select.
Now, the organization is able to accurately project program costs to external stakeholders. The tool also provides program-specific data for budgeting, annual planning, and actual vs. budget analysis.
Example #2: What is the full cost of all our programs?
The Challenge
An organization posed the question, “How much do our programs actually cost – staff labor, volunteer appreciation and recruitment, and materials included?” They needed a financial tool with accurate cost information to help them make sound decisions on expanding their services to neighboring communities.
The Solution
The Taproot Foundation pro bono consultant team created a tool that helped the organization analyze historical costs across different programs. The tool also served as a predictive model that helped the organization estimate the costs of different program configurations.
The Review
“This will be valuable in grant proposals, pricing sponsorship fees, and estimating new service delivery models.” – Executive Director
Example #3: We want to help others replicate our program—but how much does it really cost?
The Challenge
Operating close to two dozen programs, an organization planned to package one of their signature programs for other organizations to replicate. To do so, they needed an accurate assessment of program costs.
The Solution
The financial model the team created used current costs to determine the resources needed run various versions of the program. The output of the model helped the organization calculate both the funding and staff resources needed for the program. Going forward, the organization will use the tool to measure actual against projected costs and to further refine their forecasts.
The Review
“We were extremely pleased and continually impressed with the Taproot team’s extremely high level of expertise, commitment, and dedication throughout the project. We are the grateful recipients of an amazing Financial Analysis tool that adds a tremendous amount of value to our costing and planning processes, and we will be utilizing it for years to come.” – Executive Director
Apply for this Service Grant
If this project appeals to your organization and you have the recommended items in place, please review our grantmaking process and criteria, and then apply. If you have questions about the grant or your eligibility, please contact us.
