Financial Risk Scanning Tool
The Forbes Funds, with the help of numerous partners, has developed a financial risk scanning tool for nonprofits. Based on audit data and current financials, this tool provides both The Forbes Funds and organizational users the opportunity to quickly see their financial position and determine areas of strength and improvement. By evaluating both the past and the present, the scan can give organizations a place to begin thinking about how to plan differently for the future.
The tool, however, is not meant to be a pass/fail test. Instead, we hope that it will help organizations more effectively and efficiently view, understand, and present financial information for internal use, with boards, and with funders, and that it will serve as a conversation-starter in moving an agency toward better managing its finances.
The Forbes Funds offers it free of charge for use in any nonprofit organization that is interested. Our goal is to provide resources that will enhance the organization, and we hope that the Financial Risk Scanning Tool will do just that.
As your organization uses the tool, keep in mind that unlike a more standardized data source such as Form 990, every audit looks a little different. Thus, as you are entering information, you may run into situations where your audit does not line up exactly with the format of the tool. That’s okay! We are here to help, so just ask if you need clarification.
The tool has seven sections, each on a separate tab within an Excel document:
- The Instructions tab gives a basic overview of the tool, including directions on inputting data, detailed definitions/explanations of input terminology, and which pieces to print.
- The Input tab is where the organization will enter in their financial data: audit information from the previous 3 years, and the most recent unaudited financials. The information is then pulled into the Historic Metrics, Current Metrics, and Financial Graphs tabs to give an overall picture of the financial situation of the organization.
- The Questionnaire tab is where qualitative questions regarding financial information, practices, and management are asked of the organization. The responses to these questions are pulled into the Cover and Financial Graphs tabs to give greater insight into the financial situation of the organization.
- The Cover tab is meant to be a cover sheet for the final report. It gives a basic overview of the financial and qualitative data of the organization.
- The Historic Metrics tab is a 1-page dashboard view of the historic trends of the organization. Each graph is based on the audit data provided in the Input tab.
- The Current Metrics tab is a 1-page dashboard view of the current financial situation of the organization. Each graph is based on the unaudited data provided in the Input tab.
- The Financial Graphs tab is a detailed report based on both the historic and current data represented in the Historic and Current Metrics tabs. The report provides a description of each financial metric, benchmarks (where applicable), relevant responses from the “Questionnaire,” and a section for agency comments.
- The Agency Comments sections under each chart offer a freeform field for you as the organization to contextualize or comment on the financial data that is being presented. We encourage you to use these fields to explain circumstances, decisions, business models, etc. that would otherwise not be clear to viewers just by looking at the graphs.
We hope you find that the Financial Risk Scanning Tool is useful for your organization. For further questions, contact at firstname.lastname@example.org.
Download the dashboard to use with your organization!