Financial SCAN: First Online Service to Offer Comprehensive Analysis of Nonprofit Financial Health
GuideStar and Nonprofit Finance Fund Partner on New Industry Standard for Interpreting Nonprofit Financial Data
Financial SCAN provides nonprofit leaders and their supporters and advisors with greater clarity about how to interpret and use this data in decision-making and strategy.
We believe our user-friendly visual tool will become the new industry standard for interpreting nonprofit financial data.
This innovative new tool builds the financial management capacity of nonprofits and helps grantmakers engage with their grantees about financial health and funding needs.
Washington, DC and New York, NY – April 10, 2012 — Today GuideStar and Nonprofit Finance Fund (NFF) launched Financial SCAN (Situation and Comparables ANalysis), the first online platform to provide a comprehensive picture of a nonprofit’s financial health. Financial SCAN makes nonprofit data and analysis more consistent and accessible, creating a new industry standard.
Financial SCAN draws data from Forms 990 received directly from the IRS and presents the information in an easy-to-read, shareable format with financial dashboards and graphs, an educational guide, and questions to prompt discussion among nonprofit leaders, grantmakers, donors and advisors. The platform offers a more complete interpretation of financial health than is currently available, and it focuses on metrics and trends that are most meaningful when assessing an organization’s financial strengths and weaknesses.
“Understanding a nonprofit’s financial story can be daunting, since the way money flows in and out of the sector is complex and counterintuitive,” said Rebecca Thomas, Vice President, Strategy & Innovation, for Nonprofit Finance Fund. “NFF and GuideStar recognized that there was no reliable and easy way to access useful financial information, so we pooled our expertise to address this unmet need in the sector. Financial SCAN provides nonprofit leaders and their supporters and advisors with greater clarity about how to interpret and use this data in decision-making and strategy.”
“As the leading source of nonprofit information, we saw an opportunity to improve the use of Form 990 data by adding a layer of education and analysis, and we knew NFF was the right partner to help us create this new financial resource,” said Lee Glenn, GuideStar’s senior vice president. “We believe our user-friendly visual tool will become the new industry standard for interpreting nonprofit financial data.”
Nonprofit supporters often consider limited financial metrics, such as overhead ratio, when making judgments about which organizations to support. Financial SCAN focuses on ratios and trends that have a far greater influence on a nonprofit’s overall financial health and capacity to deliver excellent programs. The analysis can help change the conversation about what it takes for a nonprofit organization to be stable and effective. With just a few clicks, Financial SCAN provides a financial heath dashboard that illustrates five-year trends and ratios for a single nonprofit organization as well as more detailed graphical analyses of a nonprofit’s profitability, expense trends, revenue dynamics, balance sheet health, and liquidity. A peer comparison dashboard allows users to review an organization’s financials side by side with up to five peer nonprofits of their choice. An educational component interprets the data in the report and poses questions to provoke dialogue about a nonprofit’s current situation and future goals.
“This innovative new tool builds the financial management capacity of nonprofits and helps grantmakers engage with their grantees about financial health and funding needs,” said Kathy Reich, Director or Organizational Effectiveness Grantmaking at the David & Lucile Packard Foundation. “By creating a new standard for nonprofit financial analysis, Financial SCAN underscores the relationship between strong finances and effective programs.”
For more about the benefits and uses of the Financial SCAN report, and for pricing information, visit www.guidestar.org/financialscan. Interested parties are invited to a free webinar on May 3, 2012, to better understand Financial SCAN and its many uses. To register, please visit http://www.guidestar.org/rxg/news/webinars/5-3-12-webinar-nonprofit-financial-health.aspx.
Lindsay J.K. Nichols
About Nonprofit Finance Fund (NFF)
NFF (www.nonprofitfinancefund.org) provides millions of dollars in loans to nonprofits and pushes for fundamental improvement in how money is given and used in the sector. We provide a continuum of financing, consulting, and advocacy service to nonprofits and funders nationwide. From workshops, to one-on-one consulting, to financing, our services are designed to help great organizations stay in balance and grow or innovate when they’re ready.
GuideStar (www.guidestar.org) connects people and organizations with information on the programs and finances of more than 1.8 million IRS-recognized nonprofits. GuideStar serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media. GuideStar’s mission is to revolutionize philanthropy and nonprofit practice by providing information that advances transparency, enables users to make better decisions, and encourages charitable giving.