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Community foundations operate in volatile environments. External shocks, such as economic recessions, changes in donor behavior, and unpredictable increases in operating costs can quickly weaken financial forecasts. Financial leaders of community foundations can use this tool to test the implications of those shocks and prepare their organizations to weather the storm.

Top Takeaways

  1. External shocks, such as economic recessions and changes in donor behavior, can be unpredictable and debilitating to a community foundation’s finances.
  2. Leaders at community foundations must be prepared for those shocks and ready to deploy different strategies if and when they occur.
  3. Financial leaders at community foundations can use this straightforward tool to engage board members around pressing questions related to the financial strength of their organizations in the face of unpredictable changes.
The ESP model should allow every single foundation to create close approximations of impact on income statements and operating metrics while respecting the scarcity of their time.

This tool was created by CF Insights, an initiative of FSG from 2007-2014. In 2015, CF Insights became part of Foundation Center. The tool is available on CF Insights’ website and supported by Foundation Center.