Advancement · Grants & Funding

Five numbers that say
whether you will be here.

A nonprofit can grow every year and still be fragile: half its money from one funder, two months of cash, no plan if the director leaves. Enter five numbers from each year’s financial statements and five governance checks. The scorecard works out months of reserves, the largest source’s share, the surplus and growth, scores them out of 10 and shows the trend across years.

Score a yearWhat you get
$12one-time · every device you sign in on
Buy · $12

Included with Caveat Classroom and Whole-school licenses. Or get it in the Grant writer’s desk, $49 for 55 items.

Fiscal years

The worked example is made up: three years of a youth orchestra that cut its dependence on one funder from 50 to 29 percent, then ran a deficit while building reserves. Saved on this device only.

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What you get

Advancement · Grants & Funding$12 · included with Classroom and Whole-school licenses

What you finish with
A record per fiscal year: organization, year, revenue this year and last, expenses, spendable unrestricted reserves, revenue from the largest source and five governance checks. Works out months of reserves, the largest source’s share, surplus or deficit and revenue growth, and a score out of 10; shows the trend across years; flags reserves under three months, one source over 30 percent, deficits and falling revenue.
Who it is for
Executive directors, finance staff and board members of nonprofits and school foundations.
Format
Browser scorecard with a saved record per year. Prints one year, every year in a table or a blank scorecard; downloads a spreadsheet (.csv); exports and imports a file.
Access
$12 one-time, yours on every device you sign in on; the tool opens once you are signed in with it. Included with Caveat Classroom and Whole-school licenses. Also in the Grant writer’s desk ($49) and the Advancement Suite pass ($99), and 1 more bundle. Everything you type stays in this browser; nothing is sent to Caveat.
Where it lives
The Grants & Funding space in Caveat Advancement.
Support
Questions about access, an order or a correction: team@caveatacademic.com.

How to use it

  1. Take the numbers from the year’s financial statements.
  2. Count only reserves you could spend.
  3. Answer the five governance checks honestly.
  4. Add a record for each past year.
  5. Bring the trend to the board’s finance meeting.

Score a year

How it is scored

How the ten lines are scoredLineA point whenReserves3+ months (1 point), 6+ (2)Largest source30% of revenue or lessSurplusRevenue covers expensesGrowthRevenue no lower than last yearGovernanceOne per check passedHow the ten lines are scoredReservesA point when: 3+ months (1 point), 6+ (2)Largest sourceA point when: 30% of revenue or lessSurplusA point when: Revenue covers expensesGrowthA point when: Revenue no lower than last yearGovernanceA point when: One per check passed
The lines are this scorecard’s stated rule, drawn from common guidance; they are a way to watch trends, not a rating of your organization.

Months of reserves

Unrestricted reserves you could spend, divided by a month of expenses. Guidance from the nonprofit reserves field commonly puts a minimum at three months of operating expenses, with six as a stronger position. Buildings and restricted funds do not count; they cannot pay salaries next month.

One source

When a single funder, grant program or event brings a large share of revenue, losing it means cutting programs. The 30 percent line here is a rule of thumb for when to start spreading the risk, not a published standard.

Sources

  1. Nonprofit Operating Reserves Initiative Workgroup (2008). Maintaining nonprofit operating reserves: an organizational imperative for nonprofit financial stability.
  2. Tuckman, H. P. and Chang, C. F. (1991). A methodology for measuring the financial vulnerability of charitable nonprofit organizations. Nonprofit and Voluntary Sector Quarterly, 20(4).
  3. BoardSource. Recommended governance practices: budget approval, audits, succession planning and board giving (boardsource.org).
  4. Internal Revenue Service. Form 990, Part X (balance sheet) and Part VIII (statement of revenue), where these numbers can be found.

The worked example is made up. The score is this tool’s stated rule, a way to watch trends. Nothing you type is sent to Caveat. Support: team@caveatacademic.com.