In the article
"Do you equip your board for financial strategy?”
by Kate Barr, she provides perhaps the best, or at least the simplest, analogy explaining the importance of financial analysis that I've heard.
She says, "Would you serve your friends a bowl of cake batter and then wonder why they don't rave about your beautiful cake? Probably not. You'd pour the batter in a pan, then bake and frost it before you serve the cake at a party.”
So what does cake, or its beginnings, have to do with your nonprofit's financial position and strategy? Barr continues saying, "Too often, nonprofits give their board members the financial information equivalent of the bowl of batter rather than the finished cake. Sure, the ingredients are all in the bowl, but many financial reports need to be baked and frosted before they can be served.”
Click the below link to read more about proper presentation of your nonprofit financials and how to avoid leaving your board ill-equipped to assess the situation in your organization.
[Jitasa Blog: January 15]