Reference no: EM133492863
Case: The Riverdale Prevention of Domestic Abuse Association is an NFPO that has been operating for eight years as of December 31, 2021, its latest year end. Its mission is to provide immediate refuge for clients experiencing or threatened with domestic violence. It rents office and other space in several locations across a community in a mid-sized Canadian city, and it provides the following services.
Emergency residence for victims of abuse
Drop-in counselling
24-hour crisis helpline
Emergency childcare services
Community charity shop
In addition to the programs noted above, the association puts on a gala fundraising event in February of each year. This activity consumes most of the time and effort of management and staff for the four to five weeks preceding it and is difficult to pull off. However, the event is very successful. To the end of December 31, 2020, net fundraising over the years has totaled $600,000 in unrestricted funds.
The emergency residence and childcare programs have been operating since the association was formed. These programs are the primary beneficiary of fundraising revenue. They perennially lose money because provincial grants and other related revenue are insufficient to cover costs. Maintenance and security at the residence are expensive, and most clients are unable to pay even a small amount of rent. Program managers and staff are hard to retain because of financial constraints and the emotional toll of providing the service. High costs also limit the number of spaces in the residence. Demand significantly exceeds supply. Some funding is received from the provincial government. Besides the usual 2021 grant, an additional $100,000 grant was received in December 2021 to cover 2022 emergency residence expenses.
The 24-hour crisis helpline began operating in 2021. The crisis helpline is also difficult to staff. Positions experience high turnover because of the voluntary nature of much of the work, emotional stress, and low salaries for employees. The helpline operates out of the administration office and uses about 20 percent of its other supplies and its rent, utility, and interest expenses. The emergency childcare service is housed in one room of the emergency residence and uses about 10 percent of rent, utility, interest, and other supplies expenses.
Drop-in counselling services are provided by a trained staff member. A federal grant covers salary and benefits for this person. The program has low employee turnover and requires little management oversight. Use of office space and supplies is negligible.
Other than the emergency residence program, the community charity shop generates most of the revenue for the association, despite competition from other charity shops in the area. However, the activity requires constant supervision by management. Fortunately, staff and volunteer turnover is low. The shop is housed in a separate rented location near the administration offices.
The current board is in the midst of a strategic planning session and has decided to use balanced scorecard/strategy mapping and matrix mapping processes as evaluation tools.
Audited financial statements for the year are included in Appendix A, excluding notes. The statements are prepared on the restricted fund basis. The statement of operations and changes in net assets shows only direct revenue and expenses associated with each program. This includes the salaries of program directors and their staff. The value of services donated to each program by arms-length volunteers is estimated and recorded in each program. Only the value of goods purchased and re-sold in the charity shop is recorded. The value of goods donated to the charity shop are not recorded. Year-end inventory reported on the statement of financial position relates to purchased inventory held for resale in the charity shop.
When queried, the executive director provided a rough percentage breakdown of the time the executive director and operations staff spent on each:
Operations Fundraiser Emergency residence Drop-in counselling Crisis line Emergency childcare Charity shop
5% 10% 30% 5% 10% 20% 20%
Required: (Assume you are a member of the board.)
a. Balanced scorecard/strategy mapping
i. Choose four perspectives and develop a balanced scorecard for the Association. Describe two strategic objectives for each of the four BSC perspectives and identify one associated measure for each objective.
ii. Develop a strategy map. Explain your rationale for linkages.
b. Matrix mapping
i. Choose four criteria by which to evaluate the social impact of the Association's activities.
ii. Subjectively evaluate the Association's activities based on the information in the case and your chosen criteria. Use a table and provide brief explanations of your rankings below the table.
iii. Draw a matrix map manually or using software like Excel®. You may revise the financial information to reflect what you believe is more accurate.
c. Financial performance
i. Without reference to ratios, make four observations about the Association's financial performance on an overall and program-by-program basis.
ii. Evaluate the financial performance of the Association using ratio analysis, including comparisons to prior years. Use yearly totals for calculations, not individual program figures. Show any calculations on which your observations are based. Ratio definitions are unnecessary.
d. Make four recommendations about strategy and changes to financial operations for the association, with reasons.