Economic Scenario Planning for Name of Foundation
description
Transcript of Economic Scenario Planning for Name of Foundation
April, 2010
Prepared for: Board of Directors
Economic Scenario Planning for Name of Foundation
Community Foundations Leadership Team
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I. Introduction
II. Expected Scenario
III. Alternate Scenarios
IV. Discussion
Contents
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With the Help of the CFLT’s Economic Scenario Planning (ESP) Model We Have Developed a Five-Year Forecast for Our Foundation
Introduction
In response to the worsening economy, the Community Foundations Leadership Team (CFLT) created the “Confront the Brutal Facts” task force to help community foundations better understand the challenges of the current economic climate and its impact on budget and business decisions
Based on the task force’s recommendation, the CFLT commissioned CF Insights and FSG Social Impact Advisors to create an Economic Scenario Planning (ESP) model (“stress test”) for community foundations available free of charge as an assessment and forecasting tool to answer pressing questions, such as:
– Under what circumstances will the foundation’s assets return to pre-recession levels?– How will the foundation’s income statement be impacted if the market does much
better or much worse than expected?– What adjustments need to be made to spending policies if absolute grant levels are to
be maintained in the coming years?– How much of a gap in administrative fees might the foundation be facing / how much
revenue from other sources does the foundation need to generate in the coming years?
– What impact would a major new gift have on the foundation?– Can the foundation afford to increase its operating expenses in the coming years?– Will the foundation have enough operating cash?
We have used the ESP model to create three scenarios for what the next five years could look like for our foundation and look forward to discussing these with you today
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Today We Will Present Our Assumptions, Show How They Impact Our Operating Model, and Discuss Key Implications for the Foundation
Our goal for today is to discuss these and related topics and determine the best course of action as the foundation heads into the next year
Introduction
• First, we will present a five-year forecast based on our current expectations of market performance, donor behavior, spending policy elements, alternative revenue growth, and operating expenses
• Next, we will show how changes to these assumptions would impact core operating indicators
• The key findings from these analyses highlight several important discussion topics:
Key Finding Discussion Topic
Insert key finding here Insert discussion question here
Insert key finding here Insert discussion question here
Insert key finding here Insert discussion question here
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I. Introduction
II. Expected Scenario
III. Alternate Scenarios
IV. Discussion
Contents
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Key Assumptions
Our Expected Scenario Is Based on [the Latest General Economic Outlook and Local Trends We’ve Experienced in the Past Few Months]
Expected Scenario
Expected Scenario
Summarize scenario qualitatively here
Category Assumption Rationale
MarketPerformance Insert assumption Insert rationale
DonorBehavior Insert assumption Insert rationale
SpendingPolicy Insert assumption Insert rationale
OtherRevenues Insert assumption Insert rationale
OperatingExpenses Insert assumption Insert rationale
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Summarize Results in Headline Here
Expected Scenario
Comments
• Insert comments here
Assets
35,000 35,000 35,000 35,000 35,000 35,000
$0K$10,000K$20,000K$30,000K$40,000K$50,000K
Historical Year 1 Year 2 Year 3 Year 4 Year 5
Gifts
2,500 2,500 2,500 2,500 2,500 2,500
$0K
$1,000K
$2,000K
$3,000K
$4,000K
Historical Year 1 Year 2 Year 3 Year 4 Year 5
Grants
2,500 2,500 2,500 2,500 2,500 2,500
$0K
$1,000K
$2,000K
$3,000K
$4,000K
Historical Year 1 Year 2 Year 3 Year 4 Year 5
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Summarize Results in Headline Here
Expected Scenario
PersonnelNon-Personnel
Comments
• Insert comments here
Revenues
750 750 750 750 750 750
$0K
$500K
$1,000K
Historical Year 1 Year 2 Year 3 Year 4 Year 5
Operating Expenses
530 530 530 530 530 530
200 200 200 200 200 200730 730 730 730 730 730
$0K
$500K
$1,000K
Historical Year 1 Year 2 Year 3 Year 4 Year 5
Surplus / Subsidy
20 20 20 20 20 20
-$250K
$0K
$250K
Historical Year 1 Year 2 Year 3 Year 4 Year 5
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Summarize Results in Headline Here
Expected Scenario
Comments
• Insert comments here
Months of Cash in Operating Reserve
6.0 6.0 6.0 6.0 6.0 6.0
$0K
$5K
$10K
Historical Year 1 Year 2 Year 3 Year 4 Year 5
Fee Revenue % of Operating Expenses
80% 80% 80% 80% 80% 80%
0%
50%
100%
150%
Historical Year 1 Year 2 Year 3 Year 4 Year 5
Grants % of Assets
5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
0%
5%
10%
Historical Year 1 Year 2 Year 3 Year 4 Year 5
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I. Introduction
II. Expected Scenario
III. Alternate Scenarios
IV. Discussion
Contents
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[ABC] Scenario
These Two Alternate Scenarios Test How Key Operating Indicators Would Be Impacted if Some of Our Assumptions Panned Out Differently
Alternate Scenarios
[XYZ] ScenarioSummarize scenario qualitatively here
MarketPerformance Describe key differences or write “none” Describe key differences or write “none”
DonorBehavior Describe key differences or write “none” Describe key differences or write “none”
SpendingPolicy Describe key differences or write “none” Describe key differences or write “none”
OtherRevenues Describe key differences or write “none” Describe key differences or write “none”
OperatingExpenses Describe key differences or write “none” Describe key differences or write “none”
Summarize scenario qualitatively here
Key Differences to Expected Scenario Key Differences to Expected Scenario
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Summarize Results in Headline Here
Alternate Scenarios
Assets
33,000
35,000 35,000 35,000 35,000 35,000
40,000 40,000 40,000 40,000 40,000
32,000 32,000 32,000 32,000 32,000$30,000K
$35,000K
$40,000K
$45,000K
$50,000K
Historical Year 1 Year 2 Year 3 Year 4 Year 5
Expected ABC Scenario XYZ Scenario
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Summarize Results in Headline Here
Alternate Scenarios
Comments
• Insert comments here
Comments
• Insert comments here
Comments
• Insert comments here
Expected Scenario Gifts
2,500 2,500 2,500 2,500 2,500
$0K
$1,000K
$2,000K
$3,000K
$4,000K
Year1
Year2
Year3
Year4
Year5
ABC Scenario Gifts
2,750 2,750 2,750 2,750 2,750
$0K
$1,000K
$2,000K
$3,000K
$4,000K
Year1
Year2
Year3
Year4
Year5
XYZ Scenario Gifts
2,250 2,250 2,250 2,250 2,250
$0K
$1,000K
$2,000K
$3,000K
$4,000K
Year1
Year2
Year3
Year4
Year5
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Summarize Results in Headline Here
Alternate Scenarios
Comments
• Insert comments here
Comments
• Insert comments here
Comments
• Insert comments here
Expected Scenario Grants
2,500 2,500 2,500 2,500 2,500
$0K
$1,000K
$2,000K
$3,000K
$4,000K
Year1
Year2
Year3
Year4
Year5
ABC Scenario Grants
2,750 2,750 2,750 2,750 2,750
$0K
$1,000K
$2,000K
$3,000K
$4,000K
Year1
Year2
Year3
Year4
Year5
XYZ Scenario Grants
2,250 2,250 2,250 2,250 2,250
$0K
$1,000K
$2,000K
$3,000K
$4,000K
Year1
Year2
Year3
Year4
Year5
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Summarize Results in Headline Here
Alternate Scenarios
Comments
• Insert comments here
Comments
• Insert comments here
Comments
• Insert comments here
Expected Scenario Surplus / Subsidy
20 20 20 20 20
-$250K
$0K
$250K
Year1
Year2
Year3
Year4
Year5
ABC Scenario Surplus / Subsidy
35 35 35 35 35
-$250K
$0K
$250K
Year1
Year2
Year3
Year4
Year5
XYZ Scenario Surplus / Subsidy
-15 -15 -15 -15 -15
-$250K
$0K
$250K
Year1
Year2
Year3
Year4
Year5
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Summarize Results in Headline Here
Alternate Scenarios
Expected ScenarioRevenue Mix
500 500 500 500 500
35 35 35 35 35
150 150 150 150 150
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014
Asset-Based Revenues Operating Endowment / Reserve Revenues Other Revenues
ABC ScenarioRevenue Mix
500 500 500 500 500
35 35 35 35 35
150 150 150 150 150
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014
XYZ ScenarioRevenue Mix
500 500 500 500 500
35 35 35 35 35
150 150 150 150 150
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014
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I. Introduction
II. Expected Scenario
III. Alternate Scenarios
IV. Discussion
Contents
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How Do Our Assumptions and Results Compare to Our Peers?
To come
Discussion
• If you’ve participated in a peer learning group, you can use this space to show what you’ve learned about how your peers are thinking about the coming years
OPTIONAL
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Based on the Results of the Economic Scenario Planning for Our Foundation, Several Key Discussion Topics Have Emerged
Discussion
Key Finding Discussion Topic
Insert key finding here Insert discussion question here
Insert key finding here Insert discussion question here
Insert key finding here Insert discussion question here
Secondary Finding Discussion Topic
Insert key finding here Insert discussion question here
Insert key finding here Insert discussion question here