Hilda H. Polanco, managing director of Fiscal Management Associates (FMA), is the go-to woman for nonprofits in hungry times. With a degree in accounting from New York University, and with a stint at Ernst & Young under her belt, she founded FMA in 1999 to help nonprofits improve their financial skills.
Offering a range of fiscal management services to nonprofits across the U.S., FMA has 30 employees and an annual budget of about $4 million. Its clients' budgets range from $500,000 to $75 million, with an average of $10 million to $35 million.
Three of FMA's clients are featured on HispanicBusiness's Top Hispanic Nonprofits 2012 ranking—Casa Central, La Casa de Don Pedro and Comunilife Inc. Polanco and her team have worked with Comunilife several times. In one instance, FMA helped the New York-based nonprofit transition from outsourcing its financial management to bringing it in-house.
"(FMA) did an analysis of the financial structure and support system within the agency and helped us to understand where there were weaknesses and strengths," said Comunilife Executive Director Rosa Gil. "We have a very strong department of finance now.
"It is critical to have a top-notch contracting operation because that is part of our bread and butter," she added.
Is It Safe to Merge?
The Great Recession forced many nonprofits to merge, downsize or simply close their doors.
"It's a period of time where many organizations are really looking at their financial conditions," Ms. Polanco told HispanicBusiness. "2012 is the year to have the courage to face the current conditions, and those who have been able to make changes, have."
Among the strategies she suggests are collaborations and mergers, which work particularly well in the Hispanic community.
"There is a cultural bond that exists," she said. "I also see a willingness on their part to support up-and-coming organizations in a really nice way, where an experienced (nonprofit) is taking the time to really nurture a younger one."
Mergers are another option to save services for millions of families. Stronger and larger organizations can take the programs of organizations that are no longer able to maintain their operations, Ms. Polanco said.
And funders are catching on. There has been an increased energy in creating separate funds to "help organizations think about how to collaborate or merge, legally," she said. Money raised pays for a consultant to help with negotiations, an accountant to make sure that everyone understands the numbers, and a lawyer to draft the documents.
"Funders don't want to see services lost, but they also realize that not all organizations are going to be able to survive," she said. "It's very difficult for a funder to impose a merger, nor would they ever want to do that—to say that you're both grantees of ours, we think you should merge. That is like a forced marriage, and that won't work."
Getting the Board on Board
Ms. Polanco said one of biggest challenges that nonprofits face is maintaining a focus on the future while using the past as a frame of reference.
"Leadership cannot let the challenges of the day-to-day operations cloud long-term thinking," she said.
That leadership role includes the board. The key lies in allowing management to run the day-to-day operations while the board provides oversight and adheres to its key role—fundraising.
"(O)rganizations that want to grow and are doing well are much more successful when they have the power of the board behind them," Ms. Polanco said. "And when I say the power of the board (I mean) the ability to raise money (and) bring relationships to the organization."
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