Too Many Nonprofit Organizations Operate in Financial Distress
One out of three nonprofits share common financial symptoms such as dwindling cash reserves, increasing debt, deferred maintenance, unfunded depreciation (cash flow challenges), internal borrowing, staff reductions, insufficient funds for research and development, and inability to invest in new programs or products. Financial challenges for nonprofit organizations come in all shapes and sizes, and no sector of the nonprofit community is exempt. Fundraising is not always the answer.
Help Your Nonprofit Organization Avoid Or Escape From the Zone of Insolvency and Build Financial Strength
The courts have a name for organizations operating in financial distress but not technically insolvent. They call it the Zone of Insolvency. Responsibilities and liabilities are legally expanded for boards governing organizations in the Zone of Insolvency. In light of today's litigious climate of corporate accountability, there has never been a time when board members and managers faced so much corporate and personal risk in return for their volunteer service on nonprofit boards of financially distressed organizations.
Given the current economic climate, with a general tightening of credit, losses in investment portfolios, and increased competition for charitable donations, nonprofit organizations are experiencing increasing demand for services coupled with decreasing access to capital.
MattocksConsulting works exclusively with boards and management teams of nonprofit organizations to help them avoid hidden liabilities, assessing the business model, identifying critical success factors, and helping organizations avoid or escape from the Zone of Insolvency. There are only three ways out of financial distress: a turn-around, merger, or dissolution. The financial turn-around, building long term sustainability is the preferred choice, but MattocksConsulting is also experienced in mergers and dissolutions.
MattocksConsulting will help your board and management team objectively assess the realities of your situation, develop action plans, and coach you through the implementation.