Nonprofit Financial Planning Case Studies

Case Study:  Strategic Planning & Development

A nonprofit agency dedicated to serving a specific population for over 75 years faced troubled times as its core service population dwindled. Once the prime provider, the organization now faced competition for its services. This situation was further exacerbated by reductions in government funding. At the same time, the organization’s leadership had experienced a good deal of turnover in the past 10 years. The twelve-person Board of Directors had long tenures with the organization, but evidenced little real engagement. Fundraising was negligible and the efforts to do serious fundraising were resisted by the Board, many of whom wanted to maintain their “pet” annual fundraising activity. It became clear to the Board members that the situation had to change or the organization would close.


nonprofit-financial-planningDuring a periodic investment committee meeting, a McKinley Carter Nonprofit Financial Planning advisor became aware of this very threatening situation. The advisor suggested that the Board engage in a strategic planning process to establish a framework for establishing a path to sustainability.

The McKinley Carter Nonprofit Financial Advisory team first engaged the Board in an extensive SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. Surveys were sent to Board members, staff, donors, clients, community agency partners and volunteers. A good description of each of the tested areas emerged, from which four key areas were identified as strategic drivers for the organization.


With assistance from the McKinley Carter Nonprofit Financial Planning Advisor, the Board and Executive Director developed specific goals and tactics for each driver with measurable standards, deliverables, and timelines for completion. These would govern the organization’s operation and growth over the next three years. McKinley Carter also assisted the organization in developing a financial analysis to determine appropriate spending levels and fundraising goals to meet future endowment draw-down needs.

Meanwhile, the organization has restructured its Board operations; aligned officer roles with a committee structure to support advancement, finance and other programs; assessed existing fundraising initiatives and developed a fundraising plan; and is beginning to invest in capacity-building resources.

Case Study: Funding Cuts

The financial situation for a local nonprofit social service agency was not a bright one. The executive director had learned that the annual allocation of state-legislated funds would be cut significantly in the next fiscal year. Therefore, when the organization had the chance to apply for a sizeable foundation grant to make up the difference, the executive director, treasurer, and the agency's finance committee leapt at the opportunity, organizing a group meeting to begin the detailed application process in earnest.

What they learned, however, was disconcerting: the application process required full disclosure of the agency's financial condition, including the status of the agency's sizeable endowment. The finance committee, which was made up of board members, realized that the extent of their endowment management had been a biannual letter from the bank holding the funds.

Although the finance committee contained several savvy businessmen, they wisely concluded that none of the group members had the expertise to maximize the endowment's potential. They agreed to call upon the McKinley Carter Nonprofit Financial Planning team for help.


Step 1

During the first meeting with the agency's executive director, treasurer, and chair of the finance committee, the McKinley Carter Nonprofit Financial advisor outlined the five-step process they would follow to design an investment policy statement and allocation model. The advisor proactively took the first step in their initial meeting by interviewing the three agency members to understand the agency's financial history and goals.

Step 2

Once the nonprofit advisor had collected all the necessary information; the investment specialists took the next step of conducting a detailed analysis. They prepared a comprehensive report, including asset allocation analyses and the risk/reward characteristics for the endowment.

Step 3

After the report was completed, the third step included the nonprofit advisor scheduling another meeting with the organization's executive director, treasurer, and complete finance committee to review the details of the analysis. During this comprehensive meeting, all questions were answered and the advisor confirmed, to the group's satisfaction, that they understood the agency's investment goals. When the meeting concluded, the advisor used this information to prepare specific recommendations for the organization's approval, the fourth step.

Step 4

At the next meeting, the advisor presented an investment strategy for the endowment. Longer-term investments with prudent risk would enable the principle to grow, while other measures would provide regular interest payments that would help defray agency operating costs. For the first time in many years, the endowment would be able to serve the agency as its original donors had intended. Upon accepting the advisor's recommendation, several finance committee members commented that they never would have had the time —much less the expertise — to prepare such a plan.

The complete report and recommendation were presented for a full vote at the next general board meeting. At the meeting, McKinley Carter’s nonprofit financial planning advisor suggested the organization of an investment sub-committee of the finance committee, which would be comprised of board members who expressed an interest in, and knowledge of, investment strategies. Not only did the board approve the recommendation, but the new investment committee became the organization’s liaison with the professionals at McKinley Carter.

Step 5

In the final step, McKinley Carter created a communications plan for the organization whereby quarterly statements of the holdings, allocation, and performance of the portfolio would be sent to the agency and an advisor would schedule annual meetings with the agency's investment sub-committee to review overall financial goals and the endowment’s use in achieving those goals.


Meanwhile, the organization was awarded the foundation grant, and several successful fundraisers helped ease the immediate financial crisis. The encouraging endowment performance of the first report gave the emotional boost the agency needed to continue its mission in the community. Best of all, with a strong portfolio under the watchful direction of McKinley Carter, the organization was able to attract – and carefully invest – several new large donations to the endowment.

Case Study:  Planned Endowment Growth

A college in western Pennsylvania was struggling to raise funds once the area steel industry began shutting down. Looking ahead, the school determined that its $8.3 million endowment would not be sufficient to continue its several programs of excellence. The college knew they needed to increase their endowment to support their financial goals and maintain the school's sterling academic reputation, but they weren't sure where to begin.


First, the college, under the leadership of a nonprofit financial advisor with McKinley Carter, designed a plan that included a spending, savings, and gift policy. The plan provided for disciplined spending of the school's principal fund, stimulated endowment savings, and encouraged new gift support. Then, with the advisor’s leadership, the school developed a planned giving initiative, with a proactive outreach to attract prospective donors.

Nonprofit Financial Planning-2

At the plan’s inception, only three individuals had included the college in their estate plans. The advisor worked with the college staff and trustees to aggressively market charitable trusts and annuities to potential donors, developing a roadmap that would become an integral part of the plan's execution.


Through these diligent efforts, the school increased the number of individuals who named the college in their estate plan by 50% and developed an endowment of $38 million with an expectancy pool of future gifts estimated at more than $20 million. Moreover, the school is committed to keeping the endowment growing to ensure its long-term financial viability.

Any case studies are intended to illustrate services available through McKinley Carter. They do not necessarily represent the experience of other clients nor do they indicate future performance.