March 8, 2007 | Read Time: 1 minute
NEW BOOKS
The Cash Flow Solution: A Nonprofit Board Member’s Guide to Financial Success
by Richard and Anna Linzer
The standard “bottom line” budget favored by the corporate worldÊÑ in which the year’s expenses and income are totaled, without categorization or clarification, in one columnÊÑ is not detailed enough to give nonprofit board members a clear financial picture, write Richard Linzer, a financial and organizational consultant, and Anna Linzer, a poet and writer.
“For many nonaccountants or people without financial training, the terminology and reports generated by this system can be quite daunting, and in some cases, opaque,” they argue.
Instead, the Linzers offer tips on cash-flow accounting, a system that provides a month-by-month breakdown of expenses and income and elaborates on those figures in footnotes. With such information charity board members can more easily see the big picture, such as when most of an organization’s donations come in and when expenses are highest.
Clarity is essential in financial reports for the board, the authors write: “Good governance in the nonprofit world demands that you and every other board member understand the fiscal position of your institution.”
In the first half of the book, the authors describe other elements of cash-flow accounting, including financial forecasts, the costs of raising money versus borrowing money, and taking inflation into account.
The second half of the book answers frequently asked questions about borrowing, endowments, budget deficits, deciding whether to own or lease real estate and equipment, and other issues.
Publisher: Jossey-Bass, 989 Market Street, San Francisco, Calif. 94103; (800) 956-7739; fax (317) 572-4002; http://www.josseybass.com; 131 pages; $24.95; ISBN 0-7879-7833-7.
