Business Commons^™

Less Is More: How Grantmakers Are Using Simple Financial Metrics, Hilda H. Polanco, Luther K. Snow

The Foundation Review

This article explores how the Financial Health Analysis Tool can bridge the gap between the capacity of grantmakers to conduct financial analysis and the need to incorporate financial considerations into both grantmaking and ongoing engagement with grantees.

The tool presents four years of key financial indicators in graphs and charts that create a kind of dashboard of a nonprofit's financial health over time. This small set of simple metrics highlights patterns and trends that can help grantmakers and nonprofits see how the financial management of an organization is advancing its mission and strategy.

Using a series of interviews with a …