Name: Funding Pipeline Fundamentals for Finance Leaders
Uploaded: 2026-04-29T18:31:36.127Z
Duration: 57 min 52 s
Description: Funding Pipeline Fundamentals for Finance Leaders

Transcript for "Funding Pipeline Fundamentals for Finance Leaders": Hi, everyone. Thank you for joining us today. My name is Rachel, and I'll be kicking things off. Thanks for joining us for today's webinar, Funding Pipeline Fundamentals for Finance Leaders. Before we get started, just wanted to go over some housekeeping items. First up on the right hand side of your screen, you'll see our control panel with the chat, docs, polls, and q and a. These are tools to help you interact with us throughout today's session. In the docs tab, you can download today's webinar, and we'll also send you an email of the webinar recording after the session. All poll questions will appear in the polls tab, which will only pop up when we push a question out. Each poll will stay open for a few minutes so that you can have time to respond. If you are looking to obtain CPE credit today, responding to the polls is required. The polls tab will disappear once the poll is closed. For the chat q and a, feel free to shoot us a message throughout today's presentation. And if you have any questions, you can submit them there in your control panel and we'll answer them as quickly as we can. If you do have any streaming issues, we do recommend that you try refreshing your browser first as this usually resolves the issue pretty quickly. And if you're a current customer with us today and have a question about your software, we recommend using the chat or calling the support number provided here. And then a quick note on CPE credit. So CPE credit is available for this session and you must answer all three poll questions as I mentioned earlier. Certifications will be sent out within two weeks of today's webinar via email. And if you have any questions or issues, you can reply, to our email, which we'll drop into the chat for you guys. Alright. Well, let's go ahead and dive into it. I'm happy to introduce you guys to Paul, and he is going to take things over from here. Well, thank you, and and happy to be here today. We've got an interesting topic that we're gonna discuss in terms of going through funding pipelines and fundamentals for finance leaders. And it's one of those topics that it's now more relevant than ever, especially with the uncertainty in our world. And hopefully, I can give you a few real real world tips to take home. But we want this to be interactive. So if you have any questions as was mentioned before, please put them in the chat, and we'll make sure to get to them before the end of today's presentation. Alright. A little bit of background about myself. Again, my name is Paul Preziati, and I'm a partner with Johnson Lambert. Johnson Lambert is a national CPA firm. We provide audit, tax, consulting, and including CFO services to nonprofit organizations, and I co lead our national nonprofit practice. I'm based in San Diego. I've been here about four years, but again, as mentioned before, we serve a national client base. My colleague, Mike Gelman, is having some technical difficulties right now. He may or may not pop in during this presentation, but if not, I'd encourage you to check out his organization's website. Their name is Sustainability Education for Nonprofits LLC, and Mike's an independent strategist with that organization. And, again, they provide a lot of CFO and CEO and and COO services. But let's go ahead and get into our presentation. Here, you can see our objectives for for going through funding pipelines, and we're gonna talk about a number of things here. Where we're gonna start is what's the methodology, why do we do it, and how to use it as a tool. And then we're gonna go through a few core benefits in terms of how we document, exploring the range of of potential funding changes, assessing your confidence, and then we're gonna close again, with, the dashboard report. That is one tool that may or may not be available because that might have been saved on on Mike's screen. That being said, if if that is is not available, we'll make sure to send that to everybody at the conclusion of this presentation. And, again, if you have any questions as we're going through, please put them in the chat. Let's start with the why. I I always find that helpful, especially when we're talking about this topic here. And the reason for the why is that financial health is linked to sustainability. And what's one of the largest components in in financial health? Well, it's how are we getting into the money in the door? And for many of your organizations who who live in the nonprofit universe, it's through that funding pipeline. And that can come from a number of sources from donors, independent grantors, maybe it's your members. But you can't be certain about your sustainability and financial health unless you have a handle on that pipeline. So that's why we do it because you can't have one without the other. You need to understand your pipeline to understand if your organization is financially healthy and sustainable. And then thinking about the other outcomes too of of why we do this. If you don't know your financial health, looking at these bullet points here, you might ask yourself, am I gonna be able to deliver on them? And that's thinking about delivering on the mission, being a sphere of influence, attracting funding. All of those sound like great things in concept, and they are when you actually put them into use. But a question I pose to everyone on this webinar is if you aren't financially healthy, can you deliver on these topics? And you can take a second to to mull that over, but you certainly can't deliver on your mission without being financially healthy because mission delivery is tied to resources. You also need money to be a sphere of influence. Again, that's not to say you can't do something, but any efforts you're gonna take to be an influencer out in the community, it's gonna take time and effort, which they're tied to financial health. And then to attract funding, someone once told me, you need to spend money to make money. Right? And that might not be something you you equate directly with the nonprofit universe, but, again, you dive deeper. You pay people to help with fundraising. You pay to have platforms to track your fundraising. Even though you're looking to raise money, you need to be financially healthy to do so. So said another way, you need financial health to do everything you wanna do to deliver on your mission. And then predicting the unpredictable, you know, reading that, it's it's kinda funny. But, I I you know, I I've been doing this about twenty years, and, this is probably the most unpredictable time I've I've seen in the let alone the world. Let's just limit ourselves to the nonprofit community. And the way I like to think about it is you can't predict the unpredictable. So we're gonna be here a year from now at the April 2027, and something's going to have happened where I say, I didn't believe that was possible. We've done it each of the past couple of years. And so how does this apply to this funding report? Well, you need to be prepared for multiple outcomes. Whether you know, I like to look at the positive first, whether that's an overly positive outcome in terms of, oh, more funding came in the door than I thought, to looking at the downside of I lost funding for this revenue stream. You have to be able to think about multiple scenarios and and where you're going, and this pipeline report is gonna help you to do just that. And as I mentioned before, you know, to the extent there are funding disruptions and and changing of funding patterns, that's something where it can have quick and unintended impacts over your organization. And that's not to say the funding report's gonna solve everything. It won't. You're probably gonna have to have multiple conversations if that happens. But thinking about it ahead of time could make those conversations easier. It could expedite them, and it could prepare you for multiple scenarios that you didn't think were possible before. And and this just gives a little more context, again, to the extent that you have uncertainty related to funding. It's one of those things that I truly believe is is an initiative that you have to do, a step you have to take just to say, hey. I'm prepared for some for multiple scenarios. That's not to say I know the answers to every scenario, but I've at least considered multiple outcomes here when thinking about funding. Now let's think about the concept of a funding pipeline versus a budget. And you can see some of the points that are mentioned here with respect to budgeting. Budgeting, it's very easy to take the SOWIE approach. Now for those of you who don't know what SOWIE is, it's an acronym I I probably use too much, but it stands for the same as last year, where you have a a set of assumptions. Those assumptions may or may not change, and they're somewhat hard to predict. So it it's not unusual to end up at the same answer from a budgetary perspective. Now if you take into account this funding pipeline and you expand those range of scenarios, that can lead to you or your organization analyzing outcomes that you didn't think were possible. Maybe they're not gonna happen, but at least you've considered them now for the future. So I do like to think of these these as two different exercises. That's not to say a budget isn't great. It's absolutely something you should do. It's a must have for a nonprofit organization. But a budget is more powerful when compared when compared and included with the funding pipeline because they serve two different purposes, and both can help you to accomplish the mission of your organization. And, again, why do we need it? Because predicting the future is difficult and things that are ever changing. You know, I I focus my commentary mainly on economic conditions, but there are other conditions that you should consider too in in terms of the needs of people that rely on your organization, and then also your your willingness and ability to provide services. Again, you know, that may change over time based on your organization, its needs, and its ability. And you can you can, update how you provide those services based on where you end up at the pipeline. So even without just saying, oh, I use this pipeline for financial resources, it helps you to get to a set of other outcomes and answers that you might not get to otherwise. It looks like Mike may have joined us. Mike, can you go on stage? Okay. Mike may have not gone us. Okay. Oh, there we are. Yep. I'm here. Got that technicality figured out. Okay. Okay. It looks like we can't see your video, but that's okay, Mike. Alright. Mike, can you see the slides? Yes. I got the slides now. Okay. We can see it. Alright. Moving on to difficulties in the funding pipeline. And, Mike, do you wanna give a fifteen second intro, here of yourself? Sure. Sorry about that technical difficulty on the road. As Paul, I'm CPA. Worked with nonprofit organizations my entire career as a consultant now through public accounting, but now as a consultant CPA. Sitting between a CFO, chief financial officer, and CSO, chief strategy officer around sustainability as you'll see in sustainability education for nonprofits is an open access website and fiscal strategies as our consulting site. And, Paul, sustainability is a key issue and funding pipeline. It's a it's big and disruptions in funding. And, Paul, we can pick up where we are here in talking about the near term, short term, and and intermediate term. And, Paul, I'm sure you covered this, but looking forward, the funding pipeline is is critical in that, but to break it up into these three segments. And near term is the current budget period, and next year, looking at through that lens. And then the third element, the intermediate term, will be past the prior year. So usually, at any point in time, we're looking at all three. Would you agree, Paul? Absolutely. Yeah. It's important to look in multiple different scenarios and understand multiple outcomes because, again, looking at the short term and comparing it to the long term, seeing those long term needs, you may realize, hey. I need to pivot for what I thought I needed to be at in the short term. And, you know, for example, like, right now, if you're twelve thirty one year end, we're well into this year. You you're looking at the impact on this budget year. And you could be making decisions that would make this budget year look better or a better position. But how's that impacting next budget, which we're a few months away from putting together, and the years following? So it's always to keep the eye on the future. Okay, Paul? Next slide. So the intermediate term, I think and that's where the funding pipeline really comes into play. It puts the focus of things that you could be moving the chess pieces around the board now in in the light of how it's gonna impact years two and three down the road. Next slide, please. So the innovation Paul, I wanna pause here for a second. What's really critical, as youth consider these funding changes, which the pipeline allows us to do, we can start to say what ifs and explore those with enough act to react to them. And that's the best part of it. It really embraces opportunities. And sometimes people think of the funding pipeline as a negative. I think of it as positive. It gets a chance to say and and situations where funding could be increasing in some cases. But just to pause and say, if this grant, which renews and you're gonna see this in the example in two or three years, you know, we're in the second year of a three year grant, might be coming out next year. You could start to say, well, what if it doesn't? What if we don't have a replacement for that? What that would look like? So looking at the future is the most in critical part of this, the funding pipeline, and that's it solves that riddle of we hear about something now. And, Paul, can I bring in one element of this? Before where the funding pipeline comes in is you it could be as simple as you hear about something in in in a streaming, talking with the funder. And you say, you know what? This could have a domino effect on our funding down the road, and it gives you a place to go and start to explore that now. And that's why I would like to say the funding pipeline will help solve that riddle. Okay? And it's just a it's it's a place to do assessments. But, Paul, I really like that word in the middle of the page. The funding pipeline gives you a chance to do these rolling reassessments. And we do that, right, Paul, with you know, when we put our annual budgets together, but we don't have a mechanism on a monthly basis to say, hey. What if this changes? What would it look like? Yeah. And I've heard it called a number of different terms. As long as you are analyzing circumstances and facts as they're changing, you're getting to the right answer. What we don't wanna do is just say, oh, here's the budget. Here's where we're at, and end the conversation. And that's why looking at the funding pipeline in conjunction with that is so beneficial. And back to the near term, short term, and intermediate term, the near term, you might have to make a quick pivot. But when you start to look at the, you know, the short term and the intermediate term, it's when you can start to say, how can we control our future? Okay? And so that's why we we wanna bring all three on and you'll see all three elements when we go through a template on this in a in a few minutes. Okay. Now the big one here, why do most people not put in a funding pipeline? It's scary when you look at that. I'm gonna make a statement that a lot of people disagree with, but I'm gonna make it anyway. You ready, Paul? You know, bud putting a budget together is never easy. Right? But it would be relatively easy if I could tell you what your funding would be to the penny for the next three years. Expense budgets are extremely hard, but we're lining up expense budgets to a ever changing funding goal. Okay? And so the funding pipeline said, boy, what do what do we look like if this disruption happened? If this, you know, long term, you know, funding source, this grant. What if it you know, there will come a day where no funder lasts forever? No grant source lasts forever? No program lasts forever? What does it look like? And how many times, Paul, have you seen where organizations hesitate to, like, turn off something because they're so addicted to the revenue stream? And here, it gives you a voice to say, well, what if we were to pull off that over the next two years? And and now we get a chance to explore the revenue stream. And I just find this thing, like, so important to, you know, it's a visualization tool. Just visualize that. And and still you're can be a glass half full person. You're visualizing the future, and we'll see this in the example a little bit. It's like, well, you know, looking forward, looks like we got 75% of our funding in. Pretty rock solid for the next two years. I look at those glasses half full. We only have to go hunt for the other 25%, the variable part. Or we're at 90%. We're only at 60%. So it gives you that look forward, that high low parameters. I just wanna know that. In a you know, we're gonna talk about this here in a few minutes, Paul. But, you know, like, in a a best case, worst case scenario before we get to our first polling question, I wanna know those parameters. I don't wanna sort of the likely case in the middle. I just wanna show, like, where's the bottom? Where's the top? And I'm really from a risk management point of view, I'm always guarding against you know, I don't wanna fall below that bottom level. Can we still operate? What do we need to do and such? Yeah. But allows you to have conversations that you might not have otherwise just considering, hey. This wasn't necessarily our set budget, but it's a possibility. What would we do, again, looking to the positive, if this funding source went to the high end? And then also, what are a range of outcomes we'd consider if we were at the lower end? So I think we're at our first polling question. here. Please. Again, does your organization or organizations you work with have a process to reassess funding? And you can go to the polls tab to respond to that. And, again, yes. We have a we have a number of outcomes here. Yes, no in the middle. Give you a little bit of time to respond here. Where do you think we're gonna end up on this one, Mike? Well, I wish everybody would be checking a. And so everything below a is is it really helps to highlight people that they need this process to look forward. It's scary as we just pointed out, but it's good. So I don't know how many a's we're gonna get. That's where I'm really kind of fun chunking and interested in looking at. Okay. We'll give you just a couple more seconds to respond here. You know, the absence of a is called the hope and pray method. Yep. Alright. We have our results available. So how does it look? I will tell you once they pop up on my screen. Okay. While we're let's just let's move on to the next slide here while we're waiting. for those results. Yep. We're going to spend the rest of the time Paul, we're within, like, two minutes of where I wanted to be on this part of it, which is really the stage ending to actually get into a template. And the template is really a demonstration of three moving elements that we're gonna go through. You can build this template out, Paul, in a many different ways. And no two of these look alike, but we're using this as sort of a base scenario. And if you want an example of what a template you can get your hands on, you can click on this or when you get the PowerPoint slide, then it'll take you to a template. So before we start talking about template, let's go through the four core key benefits. Number one is huge. It's a real time documentation, Exploring the range of things that as as they're changing, and you can access confidence level and then how that how we can pivot and change, not just, you know, remember the near term, short term, future term, but in next year's budget and the budget years after. Okay? So a place as we heard, Paul, and literally, I have talked with the executive directors, CEOs who have literally heard about something. You know, think back to your favorite disruption where they found out that a funding source and agency was our was something was going on. Didn't know that the day before, the next day, and they might have been. They might have had a concentration funding risk. Or but even not that, you know, funding is even a small amount of funding disappears is harmful. There's no actual place when they hear about that to go and and make an you know, make a posting, and that's what this provides you. And like I say, funding pipeline solves a no journal entry riddle. I hear about something. What does it look like? You know, it's projections, forecast. And this is the front end on a multiyear budget is to concentrate on the revenue side. So there's no immediate journal entry. Right? There's no formal place to what I just heard, and and no and no notice of changes really showed up. Okay? And it could even be, you know, sentiment among constituents. So So this gives you a place to document those changes as soon as the information becomes available in a real quick relatively easy way and see what the outcome looks like. Okay. So just be aware again one more time that when you hear about this, Yes. it provides you a chance to to, you know, take a look in the future. Okay? Visualization. Paul, I wanna stop here for a second. We've talked about this best case, worst case a little bit. But visualization is not for a single person. Okay? It's the it's among a group of managers sharing together. And so when you have these ideas in your head and you get to show it on the funding pipeline, then you can share it with your team. And I believe from there, it should go into a finance committee, executive committee, even a board to be able to take a look at this. And I think these funding pipelines, you know, the board's, small and even larger sized organizations have gotten used to looking at it twice a year. We're gonna talk about the frequency of this. Of course, we always have, like, if some information pops up, we can go to it. But it helps to signal that we're a well managed organization. We hear about something. We have planning in place. What you can't do is just, like, do the wait and see thing. So I think the funding pipeline answers that question is, you know, wait and see. How clear these signals are? Don't know. And so that's where the best case, worst case comes in a little bit. And, Paul, don't you think you know, you hear about something I don't like to predict to repeat myself, like, where I think it's gonna be. I wanna know, like, what the parameters are. Best case is we keep the funding for the next year. Worst case is we lose or we lose half of it or whatever. And so. that wouldn't I where I think these conversations are are or where I think having the conversation is most beneficial is talking about the range of outcomes. Said another way, something that's not in the report. Right? Because everyone can read this funding report ahead of time, but what you can't have is that interactive discussion about the range of outcomes. Exactly. And this, allows you to hit you that. hit you hit the nail on the head, and that's what the report does at best case, worst case, and you can take a look at that. And then and the demonstration of that is is, is right here from a safety level. And I like to look at this on the range of outcomes, what are best case, worst case, likely case. So if if you look at a real quick, if the case is is, it's the worst case and your likely place is near the worst case, is you're saying we're probably not gonna keep this. And if you go to the next one where your best case and likely case are close together, it shows that you have a super high confidence level, and you see that out in your peripheral vision, you know, in the three column format. And then in the middle, you know, the middle is the middle, you know, that we're there. But you can quickly assess. I love when you go down the sheet, you'll see this. You can go down and say, hey. You know, our likely case is 96% of our funding. We have one element that might be 10% that we're gonna keep it, but that 10% might be only two or 3% of total revenue. And you can see that, you know, the worst case is we're gonna lose this, but we're gonna be at 95% of total funding, and this is the moves we can make. And it you'll see it in your peripheral vision when you see the report, but that's what will go through people's minds real quick when when they see it. So that's why I'd love to be able to explore the outside ranges, both the low end and the high end. And you can just chart this. And you'll see here, we're gonna go through an example that's looking at the fiscal through the '26 and then look at '27, '28 going forward. Okay? One thing to talk about, and we hinted about this, Paul and I, a few minutes ago, is that percentage. And in Paul, I think the skin of the onion with nonprofits when it comes to funding is very thin. Even a loss of 3% of a critical funding source, it's only that percent of a total fund. It has an impact definitely on the bottom line, but the psyche of an organization, it might force a reshuffling in departments of a few people and such. And so what this enables you to do is say, hey. If we lose this chunk of funds, we're still at the 95%. We'll show you a visualization of this in a minute, you know, how that looks. But you could start to see, like, okay. Take a deep breath. We're still you know, based on this projection, we're at 94, 95% of our budgeted funding. Okay. What can we do? You know, it's not always just about making it up. Another layer to this, Paul, that I've seen with and I stole this from another organization, so I just wanna let you to know. It's a difference when you're looking at prospects. So we've talked about disruptions of funding you're receiving now. I think you also need to think about, like, your prospects. And I like to call them low, medium, and high when it comes to prospects. And that can be changing. Current funding could be great, but you have this whole prospect list that you're looking on for '27, '28, '29, and they're moving within that. And so. there's an obvious chance to look at that. it too is is the is the red, green, yellow stoplight approach. Exactly. Again, just getting folks to think about that potential range of outcomes could go a long way. Perfect. So when you put the best case, worst case light gray together with a low, medium, high, you start to see. And as an example, you'll see in this example and, again, I wanna let you know I I used this and saw it used at other organizations is I like to separate out how I feel about current funders because we have a history with that. Right, Paul? Separate from funders we are new to the organization. So it's like going on a date. You don't know if there's gonna be a second date. Right? Now a new funder who you're getting money from is a total different type of prospect than people you've never gotten funds from. Okay? And so you're assessing within these three buckets is is an interesting thing. And I always like to say, like, for new funders, for example, just assume a 50% renewal just to be safe and make your projections and your forecast a little safer. Right? Because we're not relying on them. Every new funder is going to renew. Okay? And so you could see divided into three buckets to repeat, the current funders versus the new funders versus the prospects. And you'll see that in the example here, how we separate those out. Okay. Planning cap. Real quick. Pausing for dramatic effect, Paul. We're talking about funding. Right? That information, you're sharing it internally, of course, but if you're sharing it at the board level and such, be careful. We might have some specific names of donors, grant sources, IGs, you know, contacts and things. And so you wanna make sure that that you are very detailed in your journal, but we like to use the top dashboard, Paul, where we'll give a summary of that. But you're on the top dashboard, you're scrubbing out names and things and such that might be. affecting the funding list. So I just I'm always careful. Well and and one other thing I would say too is let's, let's consider not using Excel. Excel is is not necessarily safe. Let's consider using third party software that's encrypted. And I'm sure the Blackbaud team has some solutions they can show you too. But yeah. Especially with where AIs go, and there's a whole host of data security considerations that we're not gonna have time to dive into Right. We're gonna use, you know, just a basic template to show how these sections interact, but we encourage you to use, reporting that is shareable but controllable today. and that you can have access and and control access and things and such. Okay, Paula. It brings us to polling question number two at this moment. Alright. Polling question number two. What sources of funding are you most concerned about that are subject changes from past funding patterns? Grants, contributions, corporate sponsorships, fees for services, investment income, other could be all the above. Yeah. We don't have all the above. I'm gonna guess here people are gonna say grants under the mindset that a lot of those are coming from US funder sources that may be gone, but I'm I'm I'm curious. I could see b here too. I could see c. But, again, make sure you're to respond so that you can receive your credit. Yeah. And this can really change. Like, I think about higher education. There's so many different elements of how those funds come in in any one of them. But, again, I think the skin of the onion when it comes to funding is so thin. It doesn't you don't have to lose 30%, 40% of your funding to, have a major disruption. For member based organizations, probably, you know, my favorite thing, A 5% drop in membership is gigantic. A 5% drop in registrations, 5% drop in enrollment. Should I keep going? You know, any one of these, because they can be a leading indicator of other issues. Okay? Nobody wants to see enrollments going down. That can affect donors. Right? Definitely. Definitely. Okay. Give you just a couple more seconds. Do we have the results available? Grants is our winner. Alright. I'm normally not right, but this time we, we predicted accurately. Alright, Mike. We got a little bit more content to cover. Let's move forward. Yeah. Sure. Paul, one one favor for me. Did anybody check corporate sponsorships? I'm curious about what we've been seeing, some drifting in the patterns on corporate sponsorships. That's been a tough one. And it's also been, like, a leading indicator of some things. So keep an eye on that. Okay. We're gonna talk about the template, the example, how to work through it a little bit, and we're gonna spend the last fifteen minutes just going through some of the sections of the template, seeing how they interact. Okay? So periodic assessment of the funding streams, and we're doing sort of a risk based assessment as we're going through. Okay? Keep in mind the three buckets, near term, short term, intermediate term. Okay? Collaboration of this pipeline, really critical. I think it sits in the finance department, Paul, but the information going into it should mostly not be coming from finance. It should be people have those answers. Yeah. And that speaks to a budget should be a collaborative process. Maybe it isn't all the time, but especially this funding report, a lot of this information is gonna come from other team leadership, and you're gonna need to interact with them to make sure you you get the correct assumption for the funding report. And, Paul, we were talking about treasures this morning on a different program and such. Information sharing, if it's not done well, well, could be one of the Achilles' heels. And I think the finance department needs to take the lead, not going out in the field, the finance department, but talking to department heads, program managers, fun you know, and making sure that, you know, that this regular sharing of information. Paul and I have a presentation we do that's strictly around the communications between the finance department and the development department. Right, Paul? How many tripping hazards are in there when they're not communicating on a regular basis? Right? There's so many tripping. hazards. I mean, I've always said where we found the most audit adjustments is looking at a set of board minutes from fundraising and seeing them discussing this transaction. And then you ask finance, hey. What's this transaction? And they say, I've I've never heard of it. Now there's not a one for one when we're applying. it to this funding report, but it's the same sort of logic. If you put this together and you go in front of the board and there's a member of your team is on fundraising there and they say, well, that that's not accurate, then you're gonna create a fiasco and you're not gonna get to the right answer. So that's all to say collaboration is critical. Yeah. And also alongside the collaboration, Paul, looking back over the last five years now, when you get noticed that's a funder, a donor, there's something there, the sooner we connect with them, the better, not when it's too late. And so making sure that the sharing of information and the funding pipeline is and I think has really helped to that. But how many times have we seen where a donor made a five year pledge, for example? This is just a basic mistake that happens all the time. Three years into a five year pledge, the donor makes their third year payment, their commitment. Right? Finance sees it because the funds came in the door. They haven't communicated that to the development department that just sent out a reminder letter saying, oh, we're just sending you a friendly reminder that your your, your next pledge payment is due, and they had paid it three weeks earlier. The air comes out of the balloon immediately even though it's just a common mistake. And so these type of things, these communicate that's where I think the funding pipeline really helps to optimize this keyword. Operational planning and its stress test is, you know, this the, the funds going forward. Okay. So funding pipeline, I think, Paul, I've been called out on this a couple times, but I think at a minimum, even when things are going great, because you can optimize, it's twice a year drill. And my the way I like to key it around is I always think, you know, it's a circle. But for me, it's the beginning of the next budget cycle is I like to update the funding pipeline. Again, budgeting is easier if I know where my funds are coming from and what that assessment is best case, worst case. And I think you do another one after year end and and not that they're always separated by six months. So you're doing it twice a year with about a six month break between them. But if I only had to do it one, you know, and we do this in our head, it's really before the budget cycle. And then we assess after year end, after the audit comes out, you know, just so they're separated and say, hey. Do our forecast and our things, you know, look. So I I'd like that twice a year, Jill. Yeah. And you're in a period of and. I think that's a good baseline too. But let's say there's something more uncertain from a funding perspective, then maybe you you up the frequency. Again, just basing it on your organization, your needs. Two, I would say, is the baseline. Yeah. I exactly. And I think, you know, in a disruptive period, I fall back to the quarterly. Right, Paul? But the beauty of the funding pipeline, I e, no journal entry required, is it's just you know, we just heard about some. Go back in there real quick instead of just relying on your brain and say, hey. What does this looks like if seventeen months from now this grant doesn't renew? Because I just heard something from someone, you know, that that organization's going in a different direction or something. So, you know, I I think during disruptions, it's a quarterly basis, unless, you know, something comes up. Paul, I think there's one more point in time. As a CFO and you're communicating with CFOs, even when I don't have the answer, I wanna demonstrate that I'm thinking about the future, that I heard the same thing in a media stream about an if you federal agency doing something. And we have a way through the funding pipeline to say we're starting our an action around it. Worry, not worry, and such. So I I just think it's it's there. Paul, one more polling question, and then we're gonna get into, seeing how it flows through a template. Alright. Polling question number three, and make sure to answer this on the polls tab in order to get your credit. Does your organization use multiyear planning for budgeting, funding pipeline, and programs and operations? Yes, no, or sort of? I think we'll have more sort of in in that bucket than I'd I'd like to see, Mike. Yeah. I think there's a a a perception and and a bias that multiyear planning is difficult. And I always like to say, if you spend twenty hours on a budget, I don't know how many hours, I will spend two hours on a two to three year outlook because it's based on just two or three key assumptions, not necessarily like inflation and things, around key variables. And usually in two, three, four, two or three of them will be on funding. And I I always save one variable for labor because I always feel like that's the biggest chunk in the budget, and it's our capacity issue and all that. Paul, you and I have talked about that many time. You know? So I'm always looking at what labor looks like in the future. Okay. And, you. know yep. We'll just give you a couple more seconds here to respond. I. would Blackbaud. team, what's our results here? Sort of. That's funny. Yeah. I I think that. probably, makes sense here. Again, just know that you considered a little bit, but maybe you're not fully doing it. Yep. Paul, I'm gonna I don't answer the question, but I'm gonna ask it to you anyway. Could a key staff position that exits unexpectedly affect your funding in the future? Say, Yes. Yeah. So done. Probably. Yeah. So, again, the funding pipeline based on that because that person had a certain relationships with a certain donor, all of a sudden, that they might that prospect might move categories. Okay. So we're gonna go through the the pipeline report now. This is up on we can provide this to you. You can email Paul and I. We can give this out to you. We're not saying to do it in any one format or in using any one application. We're just doing this. These templates don't show up in, well in PowerPoint, so you'll see it. We're gonna break it down into sections, but I'm really big, for, you know, I like to even if it gets small, I like to be able to use my peripheral vision and see everything on one page. And these all the elements will come together now as as you see us go through. But I wanted you to see that it fits on one page with a lot of explanations and things and such. The key area is starting out. Like, what sounds complicated is not. It's starting out in the upper left hand corner to to categorize your key sources of funding. And you could see here this is very general, and you would be specific and get rid of any extra lines you have. And you could see we have grants at the top, then we have different levels of contributions and, you know, fee for service. And whatever you you have, because this will help give more space in the funding, worksheet as, you know, display dashboard when you come up, but honing in on here. Now once you've identified your key areas, usually, you're leaning on one or two. If you're a member based organization, it could be fee for serve and memberships. Right? If you're a higher education, it's gonna be around tuitions and things and such enrollments. Okay? If you're a donor based organization or if you're a grant based organization, Paul, we're gonna use our grants because I feel like it's a really good one to walk through an example, but we're gonna, use grants here to show. And and so here, when we then go and we start to break down the grants tab, you'll do just for grants by itself, and you'll start to break down, and you're looking like, what was it? So you can have use your peripheral vision. Where did we end up the year before? We're doing a a fiscal year, calendar year basis. 25 the year before, we're in '26 now, the current budget year. And, again, this shows member. So two would be the, near term. Three is short term, you know, how whatever we learn that might be impacting our revenues coming in, and then four is looking out. Okay? And I always think it's good to look back historically. So we we have one year. I don't wanna put too much history in place. And you could start to see here and in this example, and you'd we have a real mix of things here. Just everybody I hope everybody can see this okay. It's a little hard to get on to a PowerPoint. But you'll start to see that we have a mix of organ you know, funding. And the mix is, of course, different funders, but different lengths. Some have been here for a long time. Some are gonna be brand new. Some don't show up until very late out there in '28 and '29, and some show up in the prior year in '25. And so what does that give us, Paul? It gives us a mixture of current funders, prospects, and new funders. They're all showing up on the same page, and they're all moving here. And, Yeah. And I just wanna emphasize too, this is just one way to do it. You could look at this and say, I need more detail, or you could look at this and say, I need less detail. right. I've repeated this a number of times. It's gonna come down to your organization, who are the stakeholders in this sheet, and how do they best digest data. So I would just say this is the beginning idea, but definitely use your creativity and your knowledge of your organization to shape it to you. Yep. And send it to us so we can steal it. We'd love to see different formats, and we've seen so many. Right, Paul? But if you look at the top line and the middle line there, you could see you have a grant that's been around for a long while that all of a sudden is starting to disappear. We'll come back to that when you look at the out years. And you put your you're doing your birth case worst case for, you know, where are we going in '26. And then as you move down the page, you'll see an example of something brand new that could be coming in. And so there's this mix. The best part of it is, Paul, you know, bottom line of reports. We all look to the bottom line. Soon as you get a report. Right? Statement of activity, you look at the bottom line. Right? Well, here, I'm looking at those percentages. And in that best case, worst case, likely case, I'm saying like, okay. I can deal with this. Right? Or I can't. You start to see those percentages. And remember, you gotta make this work for nonfinancial people too. You don't wanna scare the crap out of them with too many numbers. Okay? So let's go into step. The confidence factor, that high, medium, low is more around that prospect point of view, and you'll see that show up here when we break down in this is in that lower left hand corner on this design report, where we start to separate our current funders from new funders, funders who are receiving money now, and prospects. And we and, you know, they're all three or just three different animals to me, Paul. You know? I think you gotta look at them separately. And I don't know which one has more of a shock value to me, but I have to fall back on the top bucket. The people who have been funding us, who we've received funds for, or people who've been regular members, had they all of a sudden start is that starting to slide or something? Okay. Yeah. And and and what I find useful in this exercise too, you know, the confidence level, give an explanation in the legend of what you what those mean. And, again, these could mean different things to you, but just make sure people have context and never assume. Right? Because when you assume, bad things happen. Exactly. Exactly. And we won't break down the word the same. But I again, a visual aid, you could see this real quick. Okay. Now by itself, it doesn't mean much, but when it's sitting on the page and you can use your peripheral vision, it really helps. So you're monitoring each funding category. You're doing this. Remember, this example is just looking at the grants. But you would look at donations. That could be bifurcated, trifurcated into, you know, individual donors, foundations, planned gifts, major gifts. It could be however you like to slice and dice it to Paul's point of view. Build this report out to fit to you, and less is more. Right, Paul? We don't wanna get too fancy with it. Okay. So step three is to roll these different areas. You know, most exempts I've ever dealt with have three or four key areas they really lean on, grants plus donations, and maybe a little bit of fee for service. Or it could be mostly fee for service and a little bit of grants. You'll figure it out. This will roll up to the top page, and now we don't have individual donor information or, you know, grant source information to see how the top page comes together. Okay? And you're looking at the balance sheet is and you're saying, this is a funding pipeline report. Why is the balance sheet in there? And I I know this takes up room most I would say more than half the time, Paul, the balance sheet disappears, but it still remind people of our financial health. And if you could quickly see the balance sheet and saying, holy, you know what? You know, we have no operating reserves. Our skin in the end is really thin, or we have a lot of operating reserves. We're a healthy financial organization. You know, we don't have debt service. And just so people can see that, you can add elements of, like, we've been dipping into operating reserves or we've been adding to them. So I like this. Only on the top page, I'd like to put in a condensed balance sheet so people can see the health of the organization. Yeah. Okay? It just helps you to get to a better answer from a decision making standpoint when you have both the information from our funding outcomes, which impact our income statement, but then you can see how they impact our reserves at the same time while you're evaluating. It it just facilitates the discussion. Exactly. And now as we said many times, the numbers without the backstory are meaningless, and the backstory without the numbers are meaningless. And here you get to add the backstory in the notes. And so it's that combination trying to fit us all into one page so we can use our peripheral vision, and you get so the notes here. And if if you look and you look at that large green box in the middle, on the bottom, you'll see that that grant, you could see that that was a multiyear grant that has been around for a long time. No grant lasts forever. For the first time, we think it might not flip over. And, Paul, I always came back to me with an organization early in my career I worked with that they had this grand source that was rolling in five year increments. What a blessing. It was a huge amount of money. Right? And it just renewed like clockwork. But all of a sudden, you know, we found out no grant lasts forever that we might not get that anywhere. They had a change in the board, and the board said, we didn't start bringing it and granting to other organizations, whatever. Things you don't control like the weather. And everybody was saying, well, we're okay for the next three years because it that grant doesn't end for three more years. But the planning needs to start now. And and one more thing, I just I know I'm preaching to the choir here a little bit, but the chance of having that grant renew again in three years goes up if you're in active conversations with them about it now versus ignoring it to the last minute. Right, Paul? There's only benefits that come out of these early warning signs that come up. So Yeah. It leads it leads to potential decisions and outcomes you might not have made before and just makes you consider a different universe than the one you might be in. so telling the story comes down to the top page, which is the one that you're using outwardly facing the I just wanna let you know the the details. You'll be very careful with how you use those. So on the top page, we we can we show this, and you could start to see those percentages. And here, you know, we only have the grants flowing up. But this whole story comes down to what was the significant driver. Okay? And this is this is easy to easy to see here. The significant driver was that one long time grant that they've been leaning on. I guess, Paul, you would say that's a concentration funding risk. I mean, all organizations have some concentration funding risk. Right? Nobody has the perfect three legged, stool, right, where everything is exactly equal, a third, a third, a third. Okay? And. take a look at the two red arrows here. This is what boils down to, and I think this pops off the main page in a minute, is is that all of a sudden we can see, like, you know, our percentages for this year are too bad. A little bit of planning. We have about six, seven months left to go in the year, and, and we can, you know, how can we work out? And the glass is half full is, like well, you can look at this at, like, in '28 and '29. We've got a big chunk of our funding already identified, and we're years away. And we can start working on filling out the rest. Or you can be the glass is half full at this point and say, well, we better get nervous now. And that's different for each organization. Yeah. And I think it's a healthy conversation to have for all the reasons Mike mentioned. Thinking a little bit about audits, one of the disclosures and I I to be clear, I think a lot of disclosures and audit financial statements are, let's say, useless. Concentration of risk is an important one, and it's a conversation that's that's not had enough, and it's one you can't solve overnight. You look at a lot of these organizations where they had x amount of concentration risk with a certain federal agency, and they're not in a great spot right now. So keep that in mind. If you hit take nothing else from this presentation, concentrations is a topic your audit or finance committee or your board should be discussing on a regular basis. I I believe that brings us towards the end of our our presentation, Mike, if we just wanna wrap. it up, with, a few just. wanna add to what you said is that, you know, capacity is a risk, and concentration funding is a form of capacity. You know, your funding capacity might be going down. And to assess that and I think sometimes on audits, Paul, people just you know, they're not paying attention. These these audit comments are good, and the funding pipeline gets you a chance outside of the audit to talk about it. So just as a wrap up, there's no journal entry a lot of times when will hugely impact an organization's positioning for the future, and the funding pipeline fills fills in that place. So, Paul, that brings us to an end here. We can go ahead and wrap up and and such. So you'll see here. I think the best part of this is is that as the very last comment. As as shifts are happening, that we're just not gonna take a wait and see. You have a way to show actively without making journal entries to show parameters, you know, best case, worst case a little bit. I hate by the way, I never use those words best case, worst case because they sound bad. Well, I'll use it more light, you know, better sounding word. words you wanna use, it's your choice. My takeaway from this is and what I've seen in practice because this is something Mike and I actually use with committees we we serve on. These reports lead to conversations that are beneficial that you might not have otherwise had. So, again, we wanna thank you for your time today. We we apologize for the technical difficulties. Mike, you can see a little bit of information about Mike's organization here. Mike, you just wanna add a couple of, comps commentary about that. Yeah. There's, there's a the a lot up here in the funding pipelines and multiyear budgets and how to plan around multiyear grants that you might find interesting. You can access that through here. Again, you can always email Paul and I. We have some templates. We can shoot them right back out to you. Paul's contact information is here. And I just wanted to point out there was a word in that conclusion called sketchpad, and I love it. You know? To me, it's a nice way to say, hey. This is Roya's sketch of what the future could look like. Remember, every artist sketches what before they start the work. So thank you. We'll throw it back over to the, Blackbaud team here. Hello. Thank you guys so much. That was so informative. Hope you guys all enjoyed today's webinar. I did push one poll question out to everyone. So if you could take a moment to answer that. And then just a reminder as well that everything that was reviewed today, the webinar itself will be emailed to you afterwards, and you can also go into the documents tab and we've included some resources that we think you'll find helpful. One final poll question to, shoot out to you guys is if you're interested in working with Mike and Paul. So I am going to share that out now. Just a second. Alright. So that is out there, and that is our last question of the day. We really appreciate you guys all joining us. And, again, thank you for bearing with us while we dealt with some technical difficulties. But, Mike, we're glad that things worked out and you could join us today. If anyone needs. anything, please shoot us a note, and we'll be happy to get in touch with you. Have a good day, everyone. Take care. Thank you. Bye.