financial advice for non-profit with $250k in the bank?
December 28, 2017 1:09 AM   Subscribe

I volunteer for a non-profit which apparently just realized that it's got $250k in the bank and no real idea what to do with it. I'm wondering if the hive mind can recommend them any resources for figuring this out. Is there an Idiot's Guide for this? Financial advisers? This is in NYC.

Without giving too many details, these people are dedicated to a particular activity and sponsor frequent, small events attended by tens (out of a membership of low hundreds). They've been chugging along for decades, just doing their thing and depositing the leftover cash into a mutual fund every year.

Some ideas that have been floated so far:
  • underwriting riskier programming
  • sponsoring some artists or offering grants to less well-off organizations in the same area
  • improving their (rented) space by securing a longer-term lease, paying for renovations, or buying a building outright
I have no idea how realistic any of these are. What are the mortgage payments like if you're buying a commercial building in downtown Manhattan? How much money does it take to retro-fit a building with central air conditioning? How much administrative labor does it take to offer $X/year in grants?

Are there people or books that can answer questions like this, in a way that is agnostic to the details of, e.g, what you're going to do in your building or what your grants will fund?
posted by anonymous to Work & Money (3 answers total) 1 user marked this as a favorite
 
Are there people or books that can answer questions like this

Yes. Start with this list of financial advising organizations/programs for NYC nonprofits. It's time to adopt a fiscal management strategy. Also, I'd recommend conducting an annual independent audit, so you won't have any such surprises any more.

What's going on with the board? The group should have a board with a finance officer or finance committee that, at the bare minimum, reviews the annual budget before implementation and at year-end, and ideally, in between too. It sounds like the group has scaled up and it's just time to manage more professionally.

Every nonprofit should have a significant cash reserve. One of the advisers above can recommend what multiple or percentage of the operating budget you should have in reserve. Beyond that, you have enough money to start considering an endowment for long-term stability and to smooth out the highs and lows of varying years. Real estate, if you don't already have it, doesn't seem like a good use of a smallish budget in a very expensive city.
posted by Miko at 6:25 AM on December 28, 2017 [5 favorites]


Yes, before anything these folks need to sort out their financial controls! Having $250K without anyone realizing it means someone could've stolen much of that $250K without anyone realizing it.
posted by praemunire at 8:57 AM on December 28, 2017 [3 favorites]


How much administrative labor does it take to offer $X/year in grants?

MeMail me. Happy to walk you through some of this. Also NYC based
posted by TravellingCari at 2:28 PM on December 28, 2017


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