Results Presentation

Report
Purpose of This Document
•
This set of slides is intended to provide community foundations with a template for presenting the findings of their
activity-based costing analysis
•
Foundations can use any or all of these slides as appropriate
•
To use these slides, foundations must:
• Enter the results of their activity-based costing analysis in relevant slides
• Update the peer foundation data on appropriate slides based on current benchmarking data available on the CF
Insights database (www.cfinsights.org) (NOTE: this data is available to members of CF Insights only)
• Need help analyzing the data or putting together presentation materials? Contact [email protected] for
information on pricing.
Helpful Tips when deciding what to include/exclude :
• Who is your audience? A Finance Committee may want the nitty gritty details on all products while the Board may
be more interested in very high level findings and a few key recommendations.
• Where can you drill down?
• Determine key decisions your foundation is considering. For instance, are you looking to evaluate the viability of
certain products? Do you want to consider investing further in certain areas?
• Was there anything that surprised you? For instance, did you expect DAFs would be generating a big surplus,
but the foundation is subsidizing them? How do the data explain the results (perhaps the effective fee and/or
average fund size are low)?
• Where would peer comparison data be helpful?
• The CF Insights database can help put some of your data into context (note that not all data sampled here
is available for all community foundations). Contact [email protected] for assistance.
SHARING KNOWLEDGE. GROWING IMPACT.
Activity-Based Costing Analysis
Presentation of Results
YOUR COMMUNITY FOUNDATION NAME
DATE
cfinsights.org
AGENDA
I.
Methodology
II.
Sample Slides for Overview and High-Level Findings
III.
Sample Slides for Peer Data
IV.
Sample Slides for Discussion
3
© CF Insights 2012
Methodology
Community Foundations Can Build Transparency Into the Costs and
Revenues Associated with their Products by Asking New Questions
• How much cost is associated with each Foundation product?
• Which products make money and which do we subsidize?
• Are our subsidies consistent with our mission and strategic priorities?
• What determines cost for each of our products?
Activity-Based Costing can help you determine answers to these questions
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© CF Insights 2012
Methodology
The Cost-Revenue Study Uses Activity-Based Costing to Assess the True
Cost of a Foundation’s Products and Services
• Activity-Based Costing (ABC) allows organizations to determine the actual cost associated with each
product or service
• Cost data is gathered and traced to specific activities, then costs are allocated to products or services
based on their utilization of activities
Expense 3
Expense 2
Expense 1
Expense 4
Costs are
assigned
to activities…
Activity 1
Activity 2
Activity 3
…then allocated
based on utilization
of activities
Product 1
Product 2
Staff costs are assigned to activities and products based on reported time, weighted by individual salaries,
including taxes and benefits
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© CF Insights 2012
Methodology
100% of the Foundation’s Staff Time, Cost and Other Expenses Were Assigned to
a Matrix of Products and Activities
Cost Matrix
DAF
Discretionary
Scholarships
Fee for
Service
Agency
Planned
Giving
Supporting
Orgs.
Initiatives
Community
Leadership and
Services
…
16 Products
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
Maintaining
Funds
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
$Y
Making
Grants
Providing
Non-Grant
Services to
the
Community
Other Staff
Activities
>100 Activities
Acquiring or
Establishing
a New Fund
or Gift
The model uses a set of standardized rules for allocating activity time to products
where staff were unable to do so
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© CF Insights 2012
Methodology - Products Used in the Analysis
Description
Product
Unrestricted
Field of Interest
Designated
Geographic Affiliates
Agency Funds
Scholarship
Donor Advised Funds /
Endowed
Donor Advised Funds/
Non-Endowed
Fee for Service
Funds that meet community needs as they arise through the Foundation’s Grants Program and are typically held in
perpetuity, producing an annual income
Funds allowing donors to support a broad area of concern
Funds created to ensure ongoing assistance to specific non-profit and charitable organizations, monitored to
ensure that they fulfill purposes that donors intended to support
Specific fund names
Sample product list and definitions Update to include your products and
Funds providing an annual income to be distributed in the form of scholarships
product definitions
Funds held by the CF where the donor has specified that the fund’s income or assets be used for the benefit of one
Endowment funds established by individual non-profit organizations to be held and managed by the CF. The CF
makes regular reports and distributions to the organization.
or more specific public charities or areas of interest, subject to spending policy
Funds held by the CF where the donor has specified that the fund’s income or assets be used for the benefit of one
or more specific public charities or areas of interest
Funds which require a significantly customized set of services, including committee work, event planning
Supporting Orgs.
Specific fund names
Fiscal Sponsorships
Specific fund names
Other
Special Initiatives
Community Leadership
Planned Giving
Fundraising for Operations
Specific Initiative names
Activities specific to each foundation, typically resulting from its mission driven priorities. Examples include:
activities that support the growth of philanthropy in the community, providing technical assistance to non-profits,
convening funders through grant writing workshops and local presentations.
Charitable trusts including Charitable Remainder Trusts and Charitable Lead Trusts
Fundraising activities to support the foundation's operations .
7
© CF Insights 2012
AGENDA
I.
Methodology
II.
Sample Slides for High-Level Findings
III.
Sample Slides for Peer Data
IV.
Sample Slides for Discussion
8
© CF Insights 2012
High Level Findings
% of Total Assets, Revenues and Costs by Product
100%
2%
4%
3%
Fee for Service
Update14%with your products and data
80%
Planned Giving
34%
38%
Leadership Activities
Initiatives
35%
60%
13%
Fundraising
3%
40%
20%
37%
Total
DAFs
represent
43% of
assets
Supporting Organizations
Total
DAFs
represent
26% of
revenues
20%
6%
6%
15%
15%
19%
6%
2%
Total Cost
$10M
0%
Total Assets
$800M
22%
Total Revenue
$10M
9
Discretionary
Total DAFs
represent
21% of
costs
Endowed DAFs
Non-Endowed DAFs
Designated Funds
© CF Insights 2012
High Level Findings
Costs and Revenues by Product Category
2011 Costs & Revenues ($M) Operating Budget Only
Total Revenue
$12,000k
Total Cost
Total Surplus/Subsidy
Update with your products and data
$9,000k
$4,793k
$6,000k
$3,000k
$105k
$0k
Total Foundation
Fund Types
Initiatives
($3,000k)
Civic Leadership
Other
($283k)
($937k)
($3,467k)
($6,000k)
($9,000k)
($12,000k)
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© CF Insights 2012
High Level Findings
Surplus, Subsidy and Investment for Each Product
2011 Surplus/Subsidy/Investment by Product ($k) Operating Budget Only
$600K
Surplus
Subsidy
Investment
$450K
$300K
$254K
$209K
($40)K
-$600K
($43)K
($47)K
($106)K
Community Leadership
($22)K
DAF - Non Endowed
($16)K
Supporting Orgs.
Fee for Service
Scholarships
($7)K
Fund Raising Funds
-$450K
DAF - Endowment
-$300K
Unresricted and FOI
-$150K
Designated
$0K
Agency
$34K
Geographic Affiliates
$65K
Fiscal Sponsorships
$91K
Planned Giving
$150K
($588)K
Cross-subsidizing is not unusual in a community foundation business model and it is
important to be intentional about where investments are made
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© CF Insights 2012
High Level Findings
A NUMBER OF INTERRELATED FACTORS INFLUENCE THE SUSTAINABILITY
OF THE PRODUCTS PROVIDED BY COMMUNITY FOUNDATIONS
– Number of products, and asset concentration in each product
– Degree of customization allowed or encouraged by the Foundation
– Endowment or grantmaking emphasis of each fund - or rate of
pass through
– Average fund size in each product category
– Pricing discounts from published pricing and matching pricing to
underlying cost drivers
– Revenue diversification beyond asset-based fees
12
© CF Insights 2012
High Level Findings
Details for Products that Generate a Surplus
Surplus Products
Product 1
Total Surplus
Generated
Total Assets
Product 2
Product 3
Product 4
Product 5
Update with data from your products
that generate a surplus
% of Assets
% Total Revenues
% Total Costs
Average Fund
Size
Breakeven Fund
Size
Breakeven Fee
(Costs as %
Assets)
Effective Fee
(Revenue as %
Assets)
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© CF Insights 2012
High Level Findings
Details for Products That Require a Subsidy/Investment
Product Investments
Product 1
Total Surplus/
Investment
Total Assets
Product 2
Product 3
Product 4
Product 5
Product 6
Product 7
Product 8
Update with data from your products
that require a subsidy/investment
% of Assets
% Total
Revenues
% Total Costs
Average
Fund Size
Breakeven
Fund Size
Breakeven Fee
(Costs as %
Assets)
Effective Fee
(Revenue as %
Assets)
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© CF Insights 2012
AGENDA
I.
Methodology
II.
Sample Slides for High-Level Findings
III.
Sample Slides for Peer Data
IV.
Sample Slides for Discussion
15
© CF Insights 2012
Sample Peer Comparison Data
Peer Data Can Help Put Your Foundation’s Findings Into Context
•
Members of CF Insights can access a variety of financial and operating metrics for hundreds of peer
community foundations at www.cfinsights.org, including details on:
• Assets, Gifts, and Grants
• Product Mix
• Staffing
• Operating Expenses
• Geographic Indicators
•
Additionally, numerous community foundations have completed the Activity-Based Costing analysis.
Surplus/Subsidy and cost data by product for these foundations can also be accessed at
www.cfinsights.org
•
Need assistance accessing the data or looking for more detailed Activity-Based Costing data from
peers? Contact [email protected]
•
We’ve included some sample slides in this section that may help you assess your performance in
comparison to peers. This is not an exhaustive representation of all the data available to members!
•
Interested in learning about the benefits of becoming a CF Insights member? Contact
[email protected] or visit www.cfinsights.org
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© CF Insights 2012
Sample Peer Comparison Data
Assets by Product Among Peers
Sample CF
Peer 1
Peer 2
Peer 3
Peer 4
CF Insights members can access this data in the CF Insights Database
17
© CF Insights 2012
Sample Peer Comparison Data
Percent of Total Cost by Product Among Peers
Sample CF
Peer 1
Peer 2
Peer 3
Peer 4
CF Insights members can access this data in the CF Insights Database
18
© CF Insights 2012
Sample Peer Comparison Data
Percent of Total Costs by Activity - DAFs
Peer 1
Sample CF
Peer 1
Peer 2
Peer 3
Peer 4
CF Insights members can access this data in the CF Insights Database
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© CF Insights 2012
Sample Peer Comparison Data
Total Surplus/Subsidy - DAFs
Sample CF
Peer 1
Peer 2
Peer 3
Peer 4
CF Insights members can access this data in the CF Insights Database
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© CF Insights 2012
Sample Peer Comparison Data
Operating Budget
$2 M
$1.6M
$1.3M
$1.2M
$1.1M
$1.0M
$1 M
$0 M
Total Asset
Size ($M)
SAMPLE CF
Peer 1
$140
$52
Peer 2
$91
Peer 3
Peer 4
$97
$103
CF Insights members can access this data in the CF Insights Database
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© CF Insights 2012
Sample Peer Comparison Data
Costs as % of Assets (Breakeven Fee for Products)
4.00%
SAMPLE CF
3.00%
Costs as % of Assets
Peer 1
2.00%
Peer 2
Traditional Percent of Assets Fee at 1.0%
1.00%
Peer 3
0.00%
Donor Advised
Agency
Unrestricted/FOI
Scholarships
Supporting Orgs
Peer 4
Would this data be helpful to you? Contact [email protected] for access
22
© CF Insights 2011
Sample Peer Comparison Data
Fee Revenue as % of Assets (Effective Fee)
4.00%
SAMPLE CF
3.00%
Revenue as % of Assets
Peer 1
2.00%
Peer 2
Traditional Percent of Assets Fee at 1.0%
1.00%
Peer 3
Peer 4
0.00%
Donor Advised
Agency
Unrestricted/FOI
Scholarships
Supporting Orgs
Would this data be helpful to you? Contact [email protected] for access
23
© CF Insights 2012
Sample Peer Comparison Data
Revenue Mix
100%
6%
7%
7%
$ Other Income
9%
23%
24%
80%
$ Fee for Service Revenue
$ Interest Income
60%
99%
90%
$ External Gifts/Grants for
Operations
84%
40%
76%
69%
$ Disbursements from
Operating Endowment/Reserve
20%
$ Support Fee Revenue
0%
Sample CF
Peer 1
Peer 2
Peer 3
Peer 4
Would this data be helpful to you? Contact [email protected] for access
24
© CF Insights 2012
Leadership Funding
Community Leadership and Initiatives Revenue Sources
Percent of Total Revenue for Leadership
100%
3%
7%
19%
5%
80%
9%
Admin Fees
16%
28%
29%
Operating
Endowment
Disbursements
60%
External Gifts
97%
81%
40%
79%
65%
62%
Other Revenue
20%
Operating Budget
0%
Sample CF
Peer 1
Peer 2
Peer 3
Peer 4
Would this data be helpful to you? Contact [email protected] for access
25
© CF Insights 2012
AGENDA
I.
Methodology
II.
Sample Slides for High-Level Findings
III.
Sample Slides for Peer Data
IV.
Sample Slides for Discussion
26
© CF Insights 2012
Discussion Tool
Informed by a New Set of Facts, the Foundation Can Engage in Productive
Board/Staff Dialogue and Make Intentional Strategic Choices
Questions
• Are our operations aligned with our mission and strategy?
• To improve sustainability, achieve impact, and promote philanthropy going forward,
what changes should we make in our:
• Product portfolio?
• Processes?
• Policies?
• Pricing?
• Revenue sources?
• How do we prioritize investment of resources?
– Which fee based products will we subsidize, if any?
– How should we trade off subsidizing certain fee-based products versus community
leadership activities?
• How do we develop and evaluate new product/service introductions?
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© CF Insights 2012
Discussion Tool
Before Determining Changes To Make Based on This Data, the Foundation
Should Step Back and Consider Its Strategy
•
•
This business model analysis provides key information on products’ sustainability,
community investment and opportunities for change
Before determining any changes to these products’ fees, costs or policies, however,
the Foundation must step back and review how each product plays a role in achieving
its strategic priorities
What are
our strategic
priorities?
What mix of products aligns
with our strategic priorities?
– Within fee based products
– Fee based vs. community
leadership products?
How do we position priority products for
growth?
What operational changes do we make by product:
–
–
–
–
Price
Policy
Processes
Revenue sources?
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© CF Insights 2012
Discussion Tool
Strategy Should Guide Prioritization and Adjustment of Products
Product
Emphasis
Product
Revenue
Adjustments
Opportunities to Reduce/
Redirect Costs
Unrestricted
Field of Interest
Designated
Update with your Products
Geographic Affiliates
Agency Funds
Fee Based
Products
Scholarship
Donor Advised Funds / Endowed
Donor Advised Funds/
Non-Endowed
Fee for Service
Planned Giving
Fundraising Funds
Supporting Orgs.
Initiatives
Leadership
Community Leadership
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© CF Insights 2012

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