Agenda Cash Flow, Projections & Forecasting Managing Revenue - PDF document

COVID-19 Response Financial Planning & Operational T ools April 2020 Agenda Cash Flow, Projections & Forecasting Managing Revenue & Expenses Business Continuity & Contingency Planning

  1. ¡ ¡ ¡ ¡ COVID-19 Response Financial Planning & Operational T ools April 2020 ¡ ¡ Agenda Ø Cash Flow, Projections & Forecasting Ø Managing Revenue & Expenses Ø Business Continuity & Contingency Planning Ø Families First & CARES Acts Highlights Ø Q & A COVID-19 Resources Ø Community Foundation of Jackson Hole Ø Silicon Couloir Ø Nonprofit Finance Fund Ø National Council of Nonprofits ¡ ¡List ¡of ¡general ¡and ¡specific ¡resources ¡included ¡with ¡ workshop ¡handouts. ¡ ¡ ¡ 1 ¡

  2. Wondering Where to Start? ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ Step 1 - Assessment ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ Cash Flow, Projections & Forecasting Ø How much do you currently have? • Unrestricted or restricted • Operating reserves • Board designated quasi-endowments • Available credit Ø How much do you spend? Ø How much can you raise? 2 ¡

  3. Cash Flow Modeling Resources Ø Silicon Couloir • Cash Management Guide/Checklist • Cash Flow Template Spreadsheet Ø Nonprofit Finance Fund • Cash Flow Tool Cash Flow Modeling T emplate Managing Revenue / Cash Receipts Ø Accelerate collection (pledges/receivables)? Ø Convert purchases to donations? Ø Convert restricted to unrestricted? Ø Stay close with major funders Ø Involve your board Ø Look at available financing options & federal assistance (SBA loans/grants, credits, etc…) 3 ¡

  4. Managing Expenses / Payments Ø Identify fixed versus variable costs Ø Identify what can be eliminated or deferred Ø Negotiate with lessors/vendors/banks Ø Reduce staffing and/or compensation Ø Collaborate with other nonprofits Ø Solicit staff input, where appropriate Ø Understand available COVID-19 relief Reducing Staff / Compensation Costs Ø Identify & protect key staff Ø Align staff with operating needs & cash flow Ø Look at pay cuts and reduced hours Ø Consider layoffs Ø Anticipate impact of staff reductions Ø Share resources with affected staff members (CARES Act, One22 Resource Center) Continuity & Contingency Planning Ø Identify options & realistic scenarios Ø Model at least two (best & worst case) Ø Communicate clearly with partners Ø Involve your board 4 ¡

  5. Scenario Planning T emplate Families First Act Highlights Ø Expanded emergency paid sick leave and emergency family & medical leave Ø Applicable to most employers with <500 employees Ø Effective from 4/1/2020 to 12/31/2020 Ø Limited exemption for family leave for lack of child care for employers with <50 Ø Costs offset through payroll tax credits CARES Act Highlights for Nonprofits Ø Emergency SBA 7(a) loans that may be forgiven (Paycheck Protection Program) Ø Emergency SBA EIDL loans & grants Ø Employee retention payroll tax credit Ø Payroll tax payment deferral Ø Expanded unemployment insurance coverage Ø Incentives for charitable giving 5 ¡

  6. CARES Act Loans Available to Nonprofits Paycheck Protection Program (PPP) Loans Ø Loan amount = 2.5x monthly payroll Ø Payroll includes: gross compensation, group health care, retirement benefits, state taxes Ø Payroll excludes: annual comp >$100K, federal payroll taxes, employees living abroad Ø Eligible uses: payroll, benefits, rent, mortgage interest, utilities PPP Loan Forgiveness Ø Equal to amount spent on eligible uses during 8-week period following loan origination Ø Forgiven non-payroll costs capped at 25% Ø Reduced if FTEs or wages are reduced Ø Nonprofits facing uncertainty are encouraged to apply as soon as possible 6 ¡

  7. Economic Injury Disaster Loans & Grants Ø Up to $2M working capital loan Ø $10K emergency advance within three days Ø PPP and EIDL loans can not be used for the same purpose Ø PPP loan forgiveness will be reduced by $10K if an EIDL advance is received Charitable Giving Incentives Ø Individuals: • $300 above-the-line deduction available to all individual tax payers for 2020 • Adjusted Gross Income (AGI) cap increased from 60% to 100% Ø Corporations: • Deduction limit: from 10% to 25% of income • Food inventory: from 15% to 25% of income Ø Cash gifts to public charities only Community Emergency Response Fund Ø Current focus: front-line health care organizations & nonprofits serving at-risk populations Ø Nonprofits facing imminent closure may also request support Ø Steps already taken to reduce expenses & access to other funding will be considered Ø Requests accepted online on a rolling basis 7 ¡

  8. ¡ Questions? ¡ ¡ 8 ¡


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