Last fall I had the opportunity to takes some classes on nonprofit management. I thought it would be good if I knew just a little bit about what I was supposed to be doing. It was a challenging season for Joel's Place and I was struggling with how we were going to keep our doors open. Every class I attended would have at least one exchange like this:
-Instructor: "Never, under any circumstances, do ______________ because it will lead to ________."
-Me (raising my hand): "Hypothetically...if someone were to have already done _______...and it did lead to _________...how would they recover from that?"
I learned a lot during my classes and am so grateful for the opportunity. However my time in the fall had a couple of unexpected interactions also. I put together a list of the foundational organizational problems that Joel's Place had, mostly concerning money (or lack thereof). I was trying to figure out how to prioritize them and move forward. The list included...or theoretically included:
- Cash flow. We have a hard time meeting our payroll
- A large line debt of credit from a fundraiser-gone-wrong from several years ago
- No organizational reserves (the standard recommendation is 3-6 months worth)
- A $300,000 balloon payment due in September of 2014
I came back to work knowing that the next couple of months would determine whether Joel's Place would turn a corner and become sustainable or whether it was time to close.
The first eight months of this year have been focused on turning that corner. Our summer of Free Skating was an incredible success (Thanks again Conoco Phillips and Fred Meyer!), transforming our slowest season into three months of nonstop kids and activities. Usually we end summer in the hole between $10,000-$20,000. At the end of August this year we will have our bills paid and have a little money in the bank. More amazing than that, we have come up with a solution for the Balloon Payment. Through the generosity of grants, donors and community support, we have secured a financing source that will allow us to check off many of our financial issues. I won't bore you with amortization schedules and budgets, but here is the cliff notes version:
- Our monthly cash flow is improved by $1,000 per month, making it substantially easier to pay our staff.
- The line of credit is gone.
- We have an Operational Reserve fund that could cover one month's expenses in case of emergency
- The Balloon Payment is taken care of, replaced by affordable monthly payments.