Ep. 96: How to Monitor the Health of Your Organization with Stephanie Skryzowski
EPISODE 96
How to Monitor the Health of Your Organization with Stephanie Skryzowski
About the Episode:
Recently I was on The Prosperous Nonprofit podcast with Stephanie Skryzowski and I knew I wanted to continue the conversation over here on The Purpose & Profit™ Club. Stephanie Skryzowski is a visionary Chief Financial Officer who helps nonprofit leaders better understand and use their numbers to make smart decisions to grow their bottom line and their impact. She is the Founder and CEO of 100 Degrees Consulting which provides financial strategy and bookkeeping services to nonprofits around the globe. Throughout our conversation you’ll learn what a healthy nonprofit organization actually looks like, the importance of adopting an abundance mindset, and the key numbers you should be looking at. Whether you’re looking to grow your revenue, expand (or decrease) your overhead, or you’re wondering if it’s smart to take on debt, this episode is for you.
Topics:
How Stephanie thinks about nonprofit finances and the overall health of an organization, plus how she’s breaking down the old school ways of thinking
Why Stephanie believes that one of the most important things nonprofit leadership can have is an abundance mindset
What revenue diversity looks like for healthy work and where Stephanie sees the biggest opportunity for new revenue streams
A safe amount to spend on overhead and what a healthy organization actually looks like and where your board fits into this conversation
Why Stephanie wishes she was seeing more long term thinking and strategy in the nonprofit industry
The key numbers you need to be looking at in regards to your finances and actionable steps to take today
Stephanie’s opinion on taking on debt (like a loan) as a nonprofit
Think you’ve reached out to “everyone” in your network? Out of ideas to get noticed and get funded? Generate leads for your nonprofit or social impact business: https://www.splendidcourses.com/prospect
Christina’s Favorite Takeaways:
“Money is an unlimited resource. There are an unlimited number of dollars in this world, there's not a fixed pot, and there is always more where it came from.” – Stephanie
“Expansive thinking pulls us outside of these boxes that we have kept ourselves in for a long time.” – Stephanie
“Playing the long game always yields much bigger and better results.” – Stephanie
“There are likely major donors that are just giving fractionally each year because you haven't asked them, because you haven't cultivated them.” – Christina
“If we can articulate our vision in a much more compelling way, I think people are going to be much more excited to come along for the ride with us.” – Stephanie
“Understanding your finances doesn't have to be stressful or hard, and really, there's only a handful of numbers that you really need to be looking at every single month.” – Stephanie
“Trust the timing of your life.”
About Stephanie:
Stephanie Skryzowski is a visionary Chief Financial Officer who helps nonprofit leaders better understand and use their numbers to make smart decisions to grow their bottom line and their impact. She is the Founder and CEO of 100 Degrees Consulting which provides financial strategy and bookkeeping services to nonprofits around the globe.
Stephanie is passionate about educating leaders to understand, use, and communicate their numbers to build sustainable nonprofits and increase their impact on the world. She holds a Master’s degree in Public Administration from New York University, focusing on nonprofit management and finance, and is the creator of Master Your Nonprofit Numbers, an online course in financial management for nonprofit leaders."
Connect with Stephanie:
Episode Resources:
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How to Work with Christina and Splendid Consulting:
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Christina Edwards 00:24
Welcome to the podcast. Stephanie. Now I put into chat GPT I let it tell me how to phonetically pronounce your name. And so we're going to try it ready? Yes, yes. Squares. offski. How'd I do? Not good?
Stephanie Skryzowski 00:55
No. Okay. If you were like in Poland, that's how you would say it. So it's just screws out ski. But I think in Poland, they would say like sugar soft ski. So you've got the like, authentic pronunciation. Ah, at GBT GVT nurse my
Christina Edwards 01:14
100 degrees consulting. So listen, so my maiden name is spelled. I'm not gonna say it's spelled tz a VA RAS. And so as just a baseline to chat GBT. I said say my maiden name and it got it pretty good. I was like, All right. So that was my baseline and sub RS is how
Stephanie Skryzowski 01:32
to say this. I was gonna say sub Rs. That doesn't seem that tricky. Oh
Christina Edwards 01:36
my gosh. Oh, was it tricky? Yeah, I would listen. Affectionately. I was like, just Tarzan would come out of people are like tz Tarzan. We don't know. All right, well, we're gonna dig in. So you are the founder of 100 degrees consulting. Tell us about your work and what you do. And I'm really thrilled for this conversation because this is outside my zone, but a zone I'm super passionate about for the nonprofit and social impact world. Yes.
Stephanie Skryzowski 02:04
So 100, you guys consulting provides CFO that's chief financial officer, and bookkeeping services to nonprofits. So we are basically like an outsourced finance team for nonprofit organizations. Yeah, that's the that's the one sentence description of what we
Christina Edwards 02:22
do. Yeah. So you have a love for numbers in a way that is outside of my zone. And I would imagine a lot of a lot of small to midsize shops come to you. And they're heavy on the love for maybe the program side, the impact side, the storytelling side, the fundraising side, and not so much the finance side, is that fair to say?
Stephanie Skryzowski 02:42
100%. We are like those people that you reluctantly hire because you have to, and we do all the work that like, you know, you got to check the box, you got to have a budget, you got to do your 990. But like, no one's perfect. I shouldn't say nobody. But most people are not particularly excited. From a business model perspective. It's great, because everybody needs us. We are you know, we're sort of filling that compliance need. But yeah, we're, we're not exactly the people that that you're excited to hire.
Christina Edwards 03:12
Okay, but one of the reasons why you and I got along so well is because your approach to this world is very forward thinking. And that's what I want to talk about today. Because I do think that there is an old school way to think about a nonprofits finances and maybe a newer school way to think about it. So tell me about your way. How do you think about the finances? How do you think about the health of an organization? What are some standards you'd like to see? What are some red flags?
Stephanie Skryzowski 03:40
Yeah. So when we're thinking about the financial health of an organization, I mean, I'm looking at revenue diversity, are we getting our revenue from a bunch of different sources? Do we have, you know, three to six months of cash in the bank? And do we have a forward thinking forecasts where we are looking 12 to 24, to maybe even like 60 months, five years into the future, from a financial perspective, because it's, I see a lot of organizations who have these beautiful strategic plans that he spent a lot of money to create, and what is missing is the financial resource plan to go along with it. And so then, you know, we get into the next year, and we're like, okay, let's achieve, you know, a strategic plan objective number two, and we're like, oh, wait, we have no budget for that. We didn't really think about the financial side. And so I think that forecasting piece is another really, really important thing that I see in financially healthy, financially healthy nonprofits. And the last thing I'll say that's like a little less tactical, I just talked about revenue diversity and cash and forecasting very like technical things, but I also think I'm an abundance mindset in the leadership of the organization is so important because if we are sort of operating out of that scarcity mindset, where it's like, okay, there's a fixed pot and we have to like squeeze as much as possible out of this fixed pot of money. And we're going to like scrape by on pennies and not pay our people well, and, you know, have a duct taped laptop, which I did have when I was working in a nonprofit, like that is not the way to grow it, expand it to have the impact that you want to have. So I think maybe that's even the foundational piece is that you've got this, like expanded abundance mindset in our leadership as well.
Christina Edwards 05:25
So when you say abundance mindset, I think of somebody recently who was saying that they're competing for dollars. So it's the opposite of thinking about competing for dollars. Yeah, like, let's actually just for a minute, and then we'll come back to more more tactical, like, what does an abundance mindset look like? Sounds like versus what you what you sometimes hear or see.
Stephanie Skryzowski 05:49
Yeah, so there really is unlimited resources, right? There's not one pot, if you think about it, like money is just, I don't explain it super well, but like, money is an unlimited resource. There are unlimited number of dollars in this world, there's not a fixed pot, and there was always more where that came from. And so maybe you're thinking like, Okay, I'm just going to, you know, I'm going to apply to all the grants that you know, are even tangentially related to my organization. And then maybe you don't get any of them. And you're like, Oh, well, there's, like, that's it. That was that was it that was all that I have to apply for? Exactly like no, absolutely not. There's always, always more money. It's so just kind of that's one. I don't know if that's one way to think about abundance. Yeah.
Christina Edwards 06:36
I love it. It's reminding me so I just hosted this workshop. And you know, if you look at like, the state of philanthropy, right now, there's a report you could grab, that shows that individual giving down, blah, blah, blah. And also, GoFundMe has had they almost double every year, so I was pulling their impact reports, which they don't write the same every year. So it's hard to like totally. But I can tell you, they're like top line revenue keeps going up and up and up. And I'm like, How can that be? If there was just one pot of donors who had ate a finite amount for them to say, this is how much I'm giving to go fund me? Then their revenue would be flat year over year, right? And so it's like, not only are they growing in revenue, they're growing and donors. And I said that and somebody on the workshop said, How do I get to go fund me? And I was like, You're missing the point. This is not about getting a GoFundMe account. Nanananana know, whatever fundraising tool you have is fine. It's about realizing that. Yeah, there's plenty out there and tapping into it. That's the work and believing that it's out there, right first, and then tapping. Yeah.
Stephanie Skryzowski 07:41
And look at like MacKenzie Scott, who came onto the scene a few years ago, and just started giving away these massive transformational gifts, like one time unrestricted money and millions and millions of dollars per organization. And like, that wasn't really a thing in the mainstream, like, five years ago. And now that's becoming more normal. Like five years ago, we wouldn't have dreamed that that was like, a thing. But I mean, yeah, right. Exactly. Exactly. So it really is like, it is unlimited. And you have to you have to believe it. Of course, it's it's more than just belief, right? We can't just wished for something. And then $5 million from somebody magically appears in our bank account. But yeah, it's like, how can we get creative and think outside of these sort of lanes that we've stayed in really consistently and in you know, start to get creative? Or maybe it means asking for more money from a donor you normally asked for 50,000. Less asked for 100,000 this year, and let's see what they say. Right? Like, it's that sort of expansive thinking that pulls us outside of these boxes that we have kept ourselves in for a long time.
Christina Edwards 08:50
I just feel like just you don't hear that from a lot of CFO. So I love that. Thank you for sharing that piece with us. But that's such an important piece is is when you have somebody who's looking at the numbers to actually say to you, you know what, Christina? Here's what's possible over here. Like, I believe in you to hold that for you I think is really important. I want to go back to revenue diversity that you mentioned, which is so when I think of revenue, diversity, I think a little bit almost of strategy diversity that people come to me with and they're throwing spaghetti at the wall, which means they're like, We applied for these grants. We are also doing online fundraising, we haven't an event strategy. So we're also doing this we're also doing that I know that's not what you mean, what is a nice makeup or mix of revenue diversity for healthy work?
Stephanie Skryzowski 09:40
Yeah, so that's a great question and a great like point right where this is not a throw the spaghetti at the wall and get like little bits of money from a million different places. No. We want to really hone in on the handful of areas where we can be experts and be really strong in raising money. But what I mean is that we don't want all of our eggs in one basket when it comes to actual money in the door. So I worked with an organization who had a government grant that was from the federal government that was funding about, I don't know, 70 75% of their annual budget. That's a lot, right. So like, if that government grant goes away, they're left with only 25% of their budget and need to like come up with 75% from somewhere else. And that's what happened. This federal government said, Listen, we do not want to make up three quarters of your annual budget, you need to diversify your revenue. So we are a smaller percentage of the total. And so the federal agency like backed off their grant little by little over the course of like three years, and then they don't have the grant anymore. And so they had to do this like real fast under pressure, we don't want that situation. So what I mean is like thinking about maybe the three or four areas in which you're really strong and focusing on that, so that you have a spread of revenue across different sources. Now, maybe if you're, you know, if you're really strong and individual fundraising, great, well, let's diversify across individuals, right? We don't want like three individuals funding the whole organization, then you probably wouldn't pass the public support test anyway. But thinking about different sources of revenue. Yeah, but it does that does also does not mean like you said, like, throwing spaghetti at the wall and having 100 different sources of revenue, because we're not in do very well at that either.
Christina Edwards 11:30
At certain revenue levels, maybe for small to midsize shops, do you see like, the most opportunity for revenue sources that they are there, when you look at when you when a nonprofit comes to you and sort of assessing their financials and doing some discovery? And they're at 750,000? Or something like that? Are you like, Oh, that's interesting, I see some opportunity for them to develop a revenue stream here or to go deeper with this revenue stream, versus like some low hanging fruit. I suppose that's what I'm trying to say. That's a little bit more across the board.
Stephanie Skryzowski 12:05
Yeah, like where to find low hanging fruit? Or like how I look at that. Yeah, yeah. Yeah, I mean, so when, when I come in, I'm always looking at like the last five years of financial statements. So I'm looking at the income statement over the last five years, and likely on your income statement on the revenue section on the top, you've got it broken down your revenues broken down by source. And so I can see over the last five years, what each has done. And so if we see, you know, maybe under individuals, it's like, gone up 15 20% year over year, that's great, that's a good sign, well, maybe that's a sign that we can actually crank that up a little bit more. And there's some opportunity their grants. On the other hand, maybe that's like, you know, up and down, up and down, because you get a big multi year grant, and we recognize all the revenue, and then the next year, not so much. But maybe there's some opportunity in there to look at renewals. Okay. Well, this funder funded us before, like, it's been a couple of gap years, but maybe we can go back to them again. And so I'm always looking at history and seeing what the trajectory has looked like. And, you know, I think another opportunity area that I'm seeing some organizations is around like fee for service or like earned revenue. And so there may be opportunities within the organization to like, ramp that up, I have some, you know, some clients that are like making things like sort of artisan craft type things as part of their programs. That's a revenue stream. I've seen some organizations do like consulting, like IP, intellectual property, that they have sort of created this framework that they're now able to license out to other organizations and make revenue on that. So yeah, so that's kind of how I look at it. I definitely like to look at, yeah,
Christina Edwards 13:47
what a membership be also in that category of fee for service, like, some sort of,
Stephanie Skryzowski 13:54
yeah, yeah, yeah.
Christina Edwards 13:56
Okay, cool. I'm curious on monthly gifting, do you have any opinions or thoughts on monthly on recurring giving programs? And do you like to see them? What are your thoughts?
Stephanie Skryzowski 14:08
Well, yes, and no, I mean, yes. Because for their, for some donors, it's going to make it easier for them to give more and more consistently. And so it also provides a recurring revenue stream for the organization. So you know, that okay, every single month, we've got roughly $10,000 that's coming in from monthly giving. Great. I think in other areas, if we're not doing it strategically, and really being mindful of who we have in our monthly giving program, we may be missing out on an opportunity to go bigger with them and to make a bigger ask, whereas like, we just settle into like, okay, they're giving us $100 a month, $1,200 a year great. But if we cultivated the relationship a little bit better, maybe they would have given us 5000 Like they're going to 1200 Why not 5000. So I feel like there may be some missed opportunity there, especially for organizations who are just kind of treating their monthly giving program as like a set it and forget it kind of thing. Because for revenue, that is how it feels. It's like, great. We've hooked them into our monthly giving now we don't have to think about them again. But I think there could be some missed opportunity there. I'm curious to what you think is like on the fundraising side.
Christina Edwards 15:21
So I feel like there has been a lot of talk about monthly giving lately, like it's a trend in the same way that like, I don't know, whatever was a trend a few years ago. So it's a trend. So a lot of a lot of organizations are interested, they're coming to me, they want to start one, they already have one, but no one's in it. So they want to actually have a successful one. And I'm all in I like it, it makes sense, with the like little asterik, right? That like what does the rest of your revenue stream look like? So for example, I would always rather you go make sure that we've cultivated some major donors upstream before you spend a lot of time cultivating $25 donors per month, which I think is seems obvious, but it's a common mistake that I see with smaller shops, because it may feel a little bit more comfortable and less, more comfortable to just send a social posts out an email out soliciting monthly donors to everyone then go to meet face to face and ask for $10,000 gift. So I see as some of that resistance there. And then the other piece with monthly giving is that we forget like we're like, here's the upside, we get this recurring monthly income, which allows us to do XY and Z. But we forget about like, what is their donor experience? Like why what's in it for them? Why should they stay? Many organizations haven't fleshed that out? In my coaching program, we're doing a month on monthly giving, so that they can actually figure that out if they're interested in like cultivating that. So I like it, but I like I like it, if you're ready. I like it if there's that, that asterik that that kind of piece on monthly giving. Does that make sense?
Stephanie Skryzowski 16:55
Yeah, and I also think like, I know, in my business, as a business owner, I've really learned that like playing the long game always yields much bigger and better results. And so as you're thinking about as you were talking about, like setting up this monthly giving program versus going out and having, you know, sitting down with a major donor like that might be a longer time horizon. But that relationship is going to be so much deeper, and the reward is going to be so much greater, I think. And so I think you're right to have that, you know, to have that balance, for sure. And then you you listed
Christina Edwards 17:32
like in how you talked about monthly giving was an interesting kind of piece, which is, I think a lot of times people do forget that their major donors are monthly givers. And they're sort of mixing the fact that just because somebody gives once a month recurring, it comes straight out of my checking account, doesn't mean they don't also want to give that $5,000 gift but people forget to ask or forget to cultivate those people that there is some overlap. Not all some people just want to spread their gift over. You know, that's easy. But that's another piece. And that's like a little bit more of an advanced, maybe strategy. But that yeah, there are likely major donors that are just giving us fractionally each year. Because you haven't asked them because you haven't cultivated.
Stephanie Skryzowski 18:14
Yeah, yeah, exactly. And I feel like for smaller, you know, to medium shops, as you've been talking about. You probably don't have like that many people at your monthly giving program that you don't know who they are, and that you can't like go that extra bit to build a bit of a relationship. Yeah, yeah, totally. Totally. Okay.
Christina Edwards 18:35
Good point. All right, I want to talk about I'm gonna talk about expenses. I was like, What am I want to talk about expenses, the word of like, how nonprofits spend money. So when I was on your podcast, we got into a big conversation about overhead. And how I might my thesis just just to give him bring everybody up to speed is that I don't I don't like it when nonprofits say good news, we spent you know, 3% of our total budget on on overhead, which I translate to good news, we pay our staff poverty level, they're barely making ends meet. And the churn in our development and programs position is bananas, Aren't you proud of? So like that's, that's my is that I don't think it should be a badge of honor. But I do think with that, I'd love to hear your perspective and also like, Okay, people saying, okay, Christina, I hear you but what is a what is the right a safe amount to spend on overhead like what does a healthy organization that is more forward thinking with like?
Stephanie Skryzowski 19:38
Well, yes, I 100% agree with you and I have been part of organizations that loved that have touted their very low overhead Meanwhile, I'm I've got my duct taped laptop and I'm like, toiling away over things that like we could have easily hired somebody to do for like $1,000 and I'm spending like months on these things. So yeah, definitely been there and have experienced that firsthand. And it's just, it's just so short sighted, right? Like, we're we're not investing in the right things to help us grow and to help our impact, like exponentially expand. It's like, it's just very short sighted. So yeah, I'm with you. And in terms of a sort of healthy amount, I mean, there's a lot of different opinions on this, I think the Better Business Bureau has an opinion and Charity Navigator has an opinion. And your auditor probably has an opinion, our auditors that I've worked with, you know, with many different organizations like that, you know, sort of 15% and if it starts creeping up to 20 or beyond that, they're gonna say, okay, what are we are we allocating our expenses properly? is the first question that they ask like, why does it seem like because they know that your organization is doing really good work? And I know you're managing your money? Well, so like, Have you not allocated something to programs that should be is usually the first question they're asking. But anyway, usually around 15% is not going to raise any eyebrows, it's not going to raise any red flags. And, you know, again, assuming that you're allocating your expenses accurately when I say that, for those of you that don't know, basically, you know, there are expenses like rent, for example. That is not that's not a solely an administrative or an overhead expense. That type of expense should be partially attributed to programs and probably a little bit to fundraising and probably some to admin as well. And so you know, if anybody listening is not doing that, you probably have a pretty high overhead rate. That's not entirely accurate. So anyway, that's what I'm talking about what I mean, allocating but yeah, so I would say long answer to your question around 15% Is, is probably not going to raise any red flags but still gives you a healthy amount to work with.
Christina Edwards 21:55
Yeah, I saw this Facebook post recently in one of those nonprofit Facebook groups. And the the organization was lamenting that I guess Grammarly used to have a free like you could get grammar Lee's pro account for free for nonprofits. And now they're now nonprofits have to pay for it too. And they were lamenting about that. But they were also in the post basically saying now I can't use Grammarly. Like now I haven't don't have Grammarly. And I was like, and the thread of comments that were like, This is awful. Us too. We're in it too. And I was like, Is this real? Am I hallucinating like Grammarly? I don't know how much it is a year, but it's got to be $100 or less a year. Like it's cheap. Yeah, that like to talk about short sighted. But this is it is this that is a very extreme example of organizations, sometimes being reluctant to spend money because they think they need to keep the overhead low. Right. And then you talked about, you could have hired a consultant to do something when you were working in a house for 1000 bucks that took you wait longer and the amount of time so that's where I see it's like, by the Grammarly, get the can book pro account, like get the thing, you know, like $100 $300 software is how you create time, but a lot of times, and this may be and I wrote down in my notes board, this may be part of the relationship and the culture of the board of like overhead has to be low. So maybe the question I have for you next is how does the board fit into the mix of this conversation?
Stephanie Skryzowski 23:29
Mm hmm. Oh, my gosh, I first of all, love it. I remember talking to a an executive director about Calendly. You know, like the software though. Yeah, calendar booking. I mean, yeah. So you know, as a podcast host and a business note, like, you know, I know, we've used this for years. And they were like, Oh, it's $15 a month. And I'm like, Okay, you were literally save like six hours of time. Like, we don't even have to do the math. Like, that's a no brainer, but they were hesitant about like 1520 bucks a month. So I hear you, um, the board. So? So yeah, I mean, a lot of times, we do have to get a you know, there's two different two different types of boards, and I'm sure well, there's lots of different types, but there's the type of board that's like, okay, Executive Director, whatever you say, like you just tell us we're gonna, you know, put our stamp and signature on everything, like we trust you. We're good. That's like a, that's helpful as an executive director, because you can really, you know, share with them your strategy for impact and growth and investment and those kinds of things, and then their support. That's like super micromanaging, and they're in your business, and they are asking, why did the overhead rate go from six and a half to 7% last year like that is that's hard. And I've dealt with those kinds of boards as well. One thing that I've seen with those kinds of boards is bringing in a third party that has been very, very helpful. Sometimes we are the third party. Sometimes it's like an executive director or brings on my company as their external finance team and we're coming in and presenting the financials and showing them you know, Look at this, look at that look at this metric. And that external person can be really helpful. Yeah, in other cases, I've also seen bringing the auditor in. And so typically, most of the auditors that we work with like to come to a board meeting once a year, present the results of the audit. And this one audit firm that we work with, they actually have this whole sheet of like metrics and benchmarks that they like to share, to say, Hey, this is how your organization is stacking up against our, like 1000s of other clients. And so one of the metrics in there is looking at the the overhead rate. And so that's when they're sharing, yeah, we're seeing, you know, average is 15, to 20%. And you all are up, you know, 13%. So that's a really good number to be added. And they do flag it if it looks too low. And so I think that is a really good strategy of bringing in someone outside of the organization to just talk to the board in a different way. And I've seen that be really helpful.
Christina Edwards 25:55
I feel like there are some boards where it's either we've always done it this way, or the group on the board has, doesn't have a lot of training on just how to board right how to be a board member. And so it's like, no one's totally driving the ship, like I've had Ed say, let me get back to you on a $200 spend, you know, and it's like, that is a terrible use of everyone's time and a terrible use of donor dollars, if you want to think about it, right, because now the IDI is going back and forth on a $200 spend, which if they're leading the organization, I hope that we trust them to spend $200 in the right way. So it's like, and I see that kind of mix. Sometimes it is kind of old fashioned thinking, but not always. Sometimes it's just the board is like I guess we're supposed to approve $200 spends every week. So I love the idea of having a third party like trusted third party come in and go, here's the range of normal, here's where we like to see it. Here's some opportunity, you know, and and giving them more language to board better? I don't know.
Stephanie Skryzowski 27:04
Yeah, I think also putting parameters in place. And, you know, depending on how the board is, this might be a difficult conversation, or this might be a huge relief to them. But saying like, okay, the executive director has the ability to approve expenses up to X amount, or X percentage of the budget. And only when it exceeds that must they get approval from the board chair or whatever, like putting these guidelines in place, I think are really helpful for everyone. Also, your auditor likes those because they're nice internal controls where somebody, you know, the executive director needs approval. And the other thing that I've seen as well is, you know, this is kind of kind of the same kind of different, but the auditors really liked to see the board, looking at the executive directors expenses. So whether they are expenses incurred on the organization's credit card that the executive director holds, or expenses that were reimbursed to the executive director, like just having somebody on the board of the finance committee looking at those quarterly is, is nice as well. And that provides the board a sense of like, sort of a sense of control and review. And, you know, but also just giving the executive director the power that they need to spend what they need to spend when they need to spend it. Yeah,
Christina Edwards 28:18
totally. I love all of those kinds of levers. I'm curious, what do you feel like is something that the nonprofit world is is getting wrong right now? Or is an opportunity to improve upon like, what is something another way to say it would be like, I wish blank who like what is a wish you have? Huh,
Stephanie Skryzowski 28:41
I wish Um, well, I wish that there, there's two things I'm thinking of I wish that I was seeing more big picture, long term thinking and strategy. I'm feeling like a lot of organizations I see are thinking about their work, and the their impact and the transformation of whatever they're doing in the world. In this 12 month block, right? We budgeted the beginning of the year. And we're looking at an our sort of vision stops at the end of the year. But I'm thinking of this one organization in particular that I work with, who can they have a an incredibly healthy cash reserve. And they are continuing to get six and seven figure multi year grants again and again and again. So their funders are not saying like, Oh, you guys have plenty of money. You have plenty of grants, we don't need to help you. They're like no, we're in we want to we want to like expand this even further. And the reason why one of the reasons why this organization is continuing to get funding, even though again, they have a really healthy revenue stream they have a really healthy cash reserve is because the CEOs are able to sort of articulate the So big vision, like a five year tenure, $50 million vision, their budgets like 10 million or 12 million, but they're like, Yeah, this is actually a $50 million problem. And so sure, maybe we have 10 million to get through this year. But like, can you help us get to the 50 million. And so they're able to bring people into this huge vision that's so far beyond just like this little 12 months of this year, that they just continue to grow and expand. And I would love to see this visionary thinking more in the nonprofit sector, instead of just like, we have our budget for this year, we're trying to meet our budget for this year, like, let's think bigger it lets like, you know, if we can articulate this vision in a much more compelling way, I think people are gonna be much more excited to come along for the ride with us.
Christina Edwards 30:44
Yeah, I think that that's sort of zooming out macro that can be very advantageous for painting the vision of what's possible to your donors to your your your funders, that is missed sometimes when we're going micro, and we're like, we have to plug this gap today. Today, we need to fund this one thing right here. Yeah, yeah. I love that. Yeah. Okay. So I'm, as we're kind of talking about your work and where you're talking about a $10 million organization? Where's your sweet spot of organizations that work with you? Where? How big do they need to be? How small do they need to be to hire a fractional CFO and work with you?
Stephanie Skryzowski 31:28
Yeah, so the average is about $2 million in revenue. But we do have organizations that are less than a million, and then we've got organizations that are 15 million, I would say is like our biggest, usually after 15 million, they probably have the both the need, and the resources to hire a full time CFO in house. But until then, they're you know, sometimes there's not the need for a full time CFO, they need the work, but not 40 hours a week necessarily, depending on the structure of the organization. And so then on the opposite end, under a million dollars, they definitely need bookkeeping, but the CFO need is is much less, maybe you need some help with budgeting and cashflow management, and maybe some grant financial reporting and things like that. But it's a bit less. And so once you're starting to get over a million and into the multi-millions is when we're really going to be most valuable. And you're really going to get like the bang for your buck basically.
Christina Edwards 32:34
Love it. Love it. Love it. Yeah, I'm curious, what do you consider a small shop organization? In funding? It's like, what do you consider a major gift is totally checked.
Stephanie Skryzowski 32:43
I know, I know. I'm under a million is what I personally consider a small, a small shop. Yeah. What do you consider a small shop?
Christina Edwards 32:53
So I usually define him if I'm even using the term small shop, I would just yeah, like, you know, if you're under half a million, I'd probably say and if you're in kind of more of a growth mode 500 to a million than a million, like, and then I go one to three in my head. And then three and beyond. Yeah, something like that. So I usually will anchor it in. If I'm like saying it to somebody so that they can go Oh, right. That's me, or that's not me. Yeah, as I do, right. Like some people, a major gift is at least over 5000 If not 10. And some organizations, it's anything over $1,000. And like, in that sense, it's there's no right or wrong. It's you get to define it and then cultivate those donors. Yeah. So true.
Stephanie Skryzowski 33:36
Yeah. I mean, I'm thinking about one organization I worked with, and for them a major gift was like, 30,000.
Christina Edwards 33:42
Yeah, how about that? There you go. Yeah,
Stephanie Skryzowski 33:45
like 1000 that's just like a regular donor. That's not a regular job. Isn't this not a major gift? Yeah. Um,
Christina Edwards 33:51
can we loop back to the abundance piece and the mindset piece, which is the organization who defines a major donors $1,000 Right now, because everybody starts somewhere, can't feels impossible that they would get a $30,000 gift today. I know, because I've worked with so many organizations like that. It's like, they'd be like, Christina, who's gonna give us $30,000. And like, literally, you start walking by crawling like you start somewhere and just holding the vision that that is possible for your organization and continuing to, to continuing to go is what gets you to that $30,000 gift. But I do think that there's a mentality that like, that's not possible or maybe the other objection I would hear from my from my smaller shop folks would be a $30,000 donor only gifts to organizations not like ours, they only give to the big blah blah blahs, right. What would you say to that?
Stephanie Skryzowski 34:43
That is a limiting belief, man, that was the first thing that came to my head like says who says, did all of those people, all of the people in the world to give $1,000 gifts? Or they give $30,000 gifts? Have they all told you that they would never give? No of course. thought that is a limiting belief. That is a story that you're telling yourself. That's what I would say.
Christina Edwards 35:04
Yeah. Oh, good. Yes. Anything else you want to make sure that we touch on before we wrap up?
Stephanie Skryzowski 35:12
Oh, man, no, I'm just I'm loving that we have, that we're having this conversation, and that we absolutely share the same beliefs and strategy on numbers and the importance of managing your numbers. And I would say, for, you know, the executive directors and nonprofit CEOs listening, I get a lot of like, oh, but it's hard. I don't like math. Like, I don't understand my finances. Yes. And like, it's actually not that difficult. It doesn't have to be stressful or hard. And really, there's only a handful of numbers that you really need to be looking at every single month. So if we need to, like start real small, and just say, Okay, what are the key numbers we need to be looking at? Let's look at revenue compared to last month. And look at the variances expenses compared to last month, let's look at how much money we have in the bank, how much cash we have in the bank. And and look at the trends of those right? Look at over the last six months is revenue going up or is revenue going down expenses up or expenses down. And that's a really easy place to start. There's, of course, we can go like much deeper and talk about a lot more different financial metrics. But I think that just starting to really, actually look at your income statement that you get from your finance person, not just like glance at it eyes, glaze over, toss that aside, actually starting to look at your numbers is going to tell you a lot and it really doesn't have to be hard. And so I just want to share that encouragement because I get lots of people saying like, I don't like math, I'm bad with numbers like, No, you don't have to be it's it does not have to be hard.
Christina Edwards 36:46
I think that's a great point. I remember years and years ago, when my CPA was like, Christina, I don't know what you're using, but you gotta move to QuickBooks, if we're gonna work together and just be having a dashboard. Having him help mass happy helping to distill the information actually does if, as somebody who doesn't love some of the stuff that you just talked about, I like it, but I don't love it. I don't nerd out on it. But having an added glance can help me go, oh, wow, here's some opportunities that I've missing out on this, that this is a revenue stream that I'm seeing has some legs, and I didn't really realize it till I looked at it broken down as income, right? Or, you know, I know I'm spending a lot of time over here. And it's not making much over there. Right. So it's like, sometimes, and I track my time, because my brain tells a story that isn't true. So sometimes what I'll do is I'll track my time and say, I spent a lot of time on this, this offering this project, and then I'll look at their actual revenue and go, Oh, that's actually not true. Right. This is this is a good use of my time. And so when you could correlate instead, like your, your beliefs, and actually look at the actual data behind it, I think it can inform revenue growth, too. So I love it for that. And I totally agree. If it's not, if it's not your zone of genius. That's okay. Because that's a that's why we hire people who it is their zone and can work very fast and say this is this is this is what you've got. But when you said that I realized that I wrote down, I was like, wait, no, we have to talk about this. What are your thoughts? On nonprofits taking on debt?
Stephanie Skryzowski 38:26
Oh, that's interesting. Um, do you mean debt? Like long term debt? Like a loan? Or do you mean debt, like having a credit card, or, like having a mortgage on the property?
Christina Edwards 38:38
Like alone, like alone, like, say, for that say, say, the nonprofit that's like, you know, I, our big plan in the next five years, it's a little more vision casting is gonna require some upfront lift on, you know, hiring or on marketing or on blah, blah, blah, you know, and so we don't have the funding for that right now. Could they take a loan out? What are your thoughts on that?
Stephanie Skryzowski 39:03
Yeah, so anyway, yeah, yes. So I've definitely seen nonprofits take on debt for a variety of reasons. Lots during COVID, taking advantage of like the, you know, small business, government loans and things like that. I've seen organizations open a line of credit, just like a revolving line of credit, to basically fill the gap between cost reimbursement grants. So you got to shell out a whole bunch of money upfront, and then the funder is going to repay you but you know, how governments are they take forever, and so there's a gap and so they've taken out a line of credit to help fill that gap. And I have also seen organizations take on debt for growth and for expansion. You know, the way I think about it is okay, is this is this really what we need to do? Do we need to take on debt? Is there a way that we can actually like, tap into our current network, our current funders, To say, Hey, listen, here's our vision, can you be part of this initial like, you know, this initial push to get things off the ground? I personally would start there before taking on debt. But if that's not an option for, you know, or you just don't have that ability, the biggest thing I would think about is like, Okay, well, if we're going to do this, what is our ability to repay look like? Because we obviously, like any kind of debt, personal or business, whatever, you don't want to get yourself into a situation where it's like, oh, we're, we can't pay this back. And so that's where that forecasting piece and that long term forecasting comes into play. And so if you're like, Okay, well, we know that, you know, we have a signed contract for a grant that begins in six months, but we need this runway for the next six months. Okay, well, then maybe that's, you know, something that you can think about. But I would say, knowing what that forecast looks like, revenue coming in every single month expenses going out every single month really having it mapped out. I'm not totally against it. But I would say for like, expansion purposes, there are other things that I would probably try first, before, before taking on debt.
Christina Edwards 41:09
Yeah, no, I think we're pretty in line. I was actually talking to a client about that. And I'm like, here's what I'd rather you do? Let's go fundraise. Let's Yeah. Yeah. And, and, you know, I think that Dan poletto talks about this quite a bit, too, in his work, which is like, and sometimes if you've got a big vision, you need some big funding behind it to get the big funding. It's like, would you spend $10,000, to make 50? I'm like, Yeah, I would, but a lot of organizations, would it now a lot of organizations is going to be more zeros that they would even go Get, get get debt for that in Dan's example, but I think I bring it up just because I think we're in the sector allergic to even that idea of debt. Because debt, you know, again, it's like overhead and the whole thing. So I appreciate your knowledge on that piece.
Stephanie Skryzowski 41:59
Yeah, yeah, I'm with you, I think I would try, there are a lot of things I would try first, and like, I would certainly not take on debt to like, make payroll, like, that's not what we need to do. If, if we don't have the money to make payroll, I think we have bigger problems that a loan is not going to solve.
Christina Edwards 42:16
Thank you for that. Because that's a very black and white distinction. But also, it's like, if you're thinking, I'll take on debt to keep me from taking courageous action, aka, going to fundraise. That's the same piece of like, you know, go meet with a funder, go ask, you know, ask the hard questions, and then go meet with another funder and go ask the hard question and go and go and go and go, and that's probably going to be a cultivation anyway, and how you get out of needing the duck to begin with? So yeah,
Stephanie Skryzowski 42:49
and I'm like, I think, you know, maybe you just need to get in different rooms, right? Like, if you're like, Well, I don't know, anybody that is, you know, in the position, we'll find some different people then like, again, there's a lot of people in this world and one of them has to, you know, be passionate about the work that you're doing and have money to be able to support you. And so maybe it's a matter of getting in different rooms. I love you know, I think yeah, we talked about Rachael Rogers, right? Last time on my podcast, and, you know, I think she has this, I think it was a podcast episode, where she's like, Yeah, I'm talking to like, my, my, the people that I coach, and they're saying, like, oh, I can't do this, or I can't do that. Or like, I ran out of options, or I tried everything. And she's like, have you really tried everything? Like, have you really tried everything? And of course, the answer was always like, no, of course, I haven't tried everything. And so thinking about that, like, Well, have you really tried everything? Like there's probably some more that you can do?
Christina Edwards 43:50
So yes, yes, I gave my coaching program, I gave them a a thought experiment, which was, if you had to go raise $50,000 Today, or this week, in order to keep your 501 C three status, what would you do? Well, actually, I said, if you had to raise $50,000, what would you do if you had to raise it this month? And it was like, little, I don't know, little, you know? And then I said, if you had to raise it to keep your status, what would you do? And they got all scrappy. All of a sudden, the ideas came in, and I was like, why aren't you doing that? And it was like, yeah, all of the internal work and I'm like, Alright, I got you. But it was like, Yeah, you know, when you dial up the urgency and friction internally, suddenly you're like, Alright, I'm willing to do a lot more than I'm doing right now. And telling myself I've tried everything.
Stephanie Skryzowski 44:44
I have done that so many times in my own business too. And it's like, yeah, actually Rachael Rogers at our at a mastermind retreat. She had us do that kind of exercise like okay, if you if you needed to, like double or triple your revenue this quarter, what would you do? It's like, oh, okay, well, that's a little different than like a 10% growth or something. It's like we got to double. Okay, we got to think differently. Yeah, so I love that that's such a good prompt for your your people. Yeah,
Christina Edwards 45:12
it like breaks breaks open your own like, No, I can't do that stuff. Yeah, before we wrap up, I do like to ask every guest what is one thought that you'd like to think on purpose. So this could be an affirmation and a mantra, just anything that kind of keeps you keeps you rooted in this work. Okay,
Stephanie Skryzowski 45:29
I'm obsessed with affirmations and mantras and I, when I saw this, I was like, Okay, I have four that I like, I'm constantly thinking of all the time. I love this. Okay, the first one that came to mind was, everything always works out for me. So if I'm ever feeling like, oh, I don't know how to handle this, or I don't know what to like, everything always works out for me. And I repeat that to myself. And honestly, it really helps. Another one that you want me Cheryl Forsch I stopped there.
Christina Edwards 46:01
Oh my god, we need all four. No, okay. We'll take them. Okay.
Stephanie Skryzowski 46:05
Okay, the next one is trust the timing of your life. And I say that one, because I am an Enneagram three, I'm a planner. I like to think about the thing and then do the thing. But sometimes it doesn't always work out, you know, in my timing. So trust the timing of your life. Okay, number three, I have enough time to do everything I need to do. This one is like, oh, right, I have enough time to do everything I need to do. And I'm looking at my calendar. And I'm like, That is not what the calendar is telling me right now. And looking at my to do list like it is not saying the same thing. But I repeat this to myself, I have enough time to do everything I need to do and I always do. Time is magic like that. Okay, my last one. My last one. So I'm a I'm a runner. And I have run a bunch of marathons. And this module has gotten me through like mile 18 When you're like, Oh, I still have eight miles to run and the wheels are coming off. And it's like not a good situation. So my mantra is, I am healthy. I am strong. I can do this all day long. I just repeat it in my head over and over again.
Christina Edwards 47:23
Hi, I'm struggling. Like yourself that beat to champ to Oh, that's good. Anyone listening is having to do any like calls. Like if they're doing any sort of calleth on in between it would be like that where you're like alright, yeah, right of like, yes, yeah. Whether it's asking or thinking or anything that just feels like Oh, yes. Amazing. Thank you for those tell us where they can reach out to you connect with you hire you all the things?
Stephanie Skryzowski 47:57
Yes, yes, you can find us at 100 like the number 100 100 degrees consulting.com. If you want like a forecast template, if you're like, oh, that sounds interesting. 100 degrees consulting.com/cash. And there's a forecasting template there. So you don't have to just start from scratch looking at Excel screen like how do I create a multi year forecast. That'd be a great place to start. And you can find me on LinkedIn or Instagram. Stephanie's Krzyzewski
Christina Edwards 48:25
scores AUSkey got it? Yes. SK ry Oscars. Yeah. All right. Amazing. Anything else before we wrap up? This has been so fun. Thank you for this conversation about oh, nonprofit finances.
Stephanie Skryzowski 48:41
I know thank you so much for having me. Now this was fantastic and I yeah, we're totally on the on the same wavelength when it comes to nonprofit management and finance and leadership and all the things of it.
Christina Edwards 48:52
Amazing. Thanks. Yes.