Finance Highlights 2008 0729 - Laserfiche WebLink

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Development: Fundraising expenditures have increased significantly from $85K in 2004 to $185K in 2007. The support generated by fundraising, as reported to us, was assigned to other departments on the financial statements when the money raised was earmarked for that department. The result of this practice impacts the operating statement for the Development Department which, as a result, appears to be less effective than they are. As a practice, we recommend that the fruits of fundraising expenses be reported together with the costs. In spite of this practice, Development provided a surplus of $96,018 for the four years. As discussed later, an examination of individual events shows that fundraising has been routinely successful. Non-governmental gifts and grants come from a number of local Foundations and a large number of individuals; there is no concentration of support from a single donor that, if withdrawn, would create a major financial setback for the Center. Opportunities for Cost Reduction Besides Provider Payments ($17.1M) and personnel costs ($9.9M), Occupancy Costs are the largest expenditure of the Center, totaling nearly $1.6 Million or 4.6% of the budget. The Center has exposure here to rent increases from the existing owners, or from new owners if the building is sold. The owners have expressed a willingness to sell the building to Davis Street at abelow-market price. The Executive Director is actively pursuing this process and seeks to share ownership responsibility with the City and County. The acquisition of the building is an extremely complex undertaking and represents the best opportunity for the Center to reduce its overhead and improve sustainability. Raising the necessary funds in a capital campaign will improve many of the financial ratios on the Balance Sheet. Computer maintenance was surprisingly high overall - $77,114 in Administration and $283,620 total for all Departments. We are told that the programs required to maintain the correct information and produce the correct reports required to administer the APP Program are quite complex and have been developed internally. The Center is considering pursuing an additional revenue stream by licensing the software to other contractors in the APP Program. While the evaluation of this strategy is beyond the scope of this study, the additional revenue stream could provide additional diversification while at the same time serving to further the relationship between Davis Street and the government agencies regulating the program. Results of Financial Operations Summary The operating programs of the Center are generally robust and healthy and, other than the exposure resulting from concentration of revenues and surplus in the Alternative Payment Program, there are no apparent weaknesses that would jeopardize the sustainability of Davis Street as a whole. Moreover, there are significant opportunities present in several sustainability Study: Davis Street Family Resource Center - 4/08 Page 11 of 96