Five-year budget projection for large NFP

The client

A large social service agency with a multi-faceted mission; including senior living, refugee settlement, foster care, adoption, and family preservation.

The challenge

The agency has a sophisticated finance team and a board that places an emphasis on long-term financial planning; however, they didn't have the time necessary to create the desired long-term plan. Additionally, their long-term planning would be very complicated given the vast array of services they provide.

The solution

Our team created a three-phased project plan to develop an interactive five-year budget model for their major service lines. Our experts met with management to gain an in-depth understanding of the major revenue and expense drivers. We built a custom excel-based model that projected out revenues and expenses based on those drivers by building in assumptions that management can manipulate. For example, number of residents served, rates changed, inflation, pay increases, etc. This tool allows management to adjust any assumption and immediately generate a new five-year projection.

The benefit

Long-term planning can help an organization prepare well in-advance for major changes in revenues or expenses. This was a relatively small investment made by the organization , but has a big impact on the organization’s future sustainability. Presenting the tool and the long-term plan to the board increased the board’s confidence in the organization’s management team.