The Abraham Fund Initiatives Financial Scan (Essay Sample)

The Abraham Fund Initiatives Financial Scan
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The Abraham Fund Initiatives Financial Scan
Executive Summary
The Abraham Fund Inc., also known as The Abraham Fund Initiatives is a not for profit organization that is registered with the Internal Revenue Services (IRS) as an international NGO. Thus, it is required to file the IRS Form 990 or the IRS Form 990-EZ with the Internal Revenue Services. The organization’s registered physical address is in New York, NY 10017, the United States of America, and it deals with issues relating to civil rights, advocacy, and social action, with a specific focus on intergroup and race relations. The primary responsibility of the Abraham Fund Initiatives is to advance a cohesive, just, and equitable society within Israel by ensuring equality and coexistence amongst Israel’s Arab and Jewish nationals. In order to achieve its mandate, the Abraham Fund supports policies that are based on highly innovative social models, promoting public education and advocacy, and undertaking large-scale initiatives.
The financial health of the organization is stable given its excellent performance in terms of revenues from contributions and grants, program service revenue, investment income and other incomes. Its prudent spending was also attractive to the potential donors of the not for profit organization as most of the revenues used were used for payment of grants and similar amounts. The other major expense incurred by the organization was salaries, other compensations, and employee benefits that formed part of the organization’s expenditure. In 2013, the Abraham Fund initiatives reported gross revenues of $2178349 against the previous year’s revenues of $3565194. It indicates that the organization is running on a surplus, and this would contribute to them getting Foundation support. Major accomplishments of the organization in its program involve services such as the Keren Avraham Corporation that has been instrumental in promoting peaceful coexistence in Israel.
In addition, potential donors have been attracted to the Abraham Initiatives given its essential role of promoting bilingual education in Israel, narrowing the Jewish-Arab divide, as well as promoting peaceful coexistence. The funds that are raised by the NGO are utilized prudently in assisting the Israel government to develop best practices that enhance and promote multicultural values and coexistence. Also, the grants that are given to the fund by the international donors are used in aiding the Israel government to develop economic employment initiatives that promote the integration and employment of Arab women in the country’s job market. The stable financial standing is also attributable to the organization’s partnership with key stakeholders such as the Keren Avraham, which is a non-governmental corporation based in Israel. The Abraham Fund Initiatives conducted at least 5% of their activities using an entity that is not related to itself. Thus, its transparent utilization of the funds available for its program activities contributes significantly to the organization getting Foundation support in future.
Financial Scan
Statements of Financial Performance and Financial Position of the Abraham Initiatives
Statement of Revenue
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 20122013Contributions, Gifts, Grants, and other Similar Amounts36357932175350Program Service Revenue00Other revenues  Investment Income26852152Fees from restricted gifts-2457847Total revenue35651982178349
Balance Sheet
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Assets 201120122013Cash (non-interest bearing) 8743061126676704628Savings and temporary cash investments 180442007516944Pledges and grants receivable 23399381613885618274Accounts receivable 000Loans and other receivables from current and former officers, directors, trustees, key employees and highest compensated employees    Loans and other receivables from other disqualified persons    Notes and loans receivable (net) 000Inventories for sale or use    Prepaid expenses and deferred charges 1083656904836514Land, buildings, and equipment (Cost)    Accumulated depreciation163854    16144967355507912405Investments: Publicly traded securities357903675539761Other securities00 Program-related000Intangible assets 000Other assets 000Total assets 344379829172301418526     Accounts payable and accrued expenses 51773454424049192Grants payable 6379638632742Deferred revenue 83851088611211Tax-exempt bond liabilities    Escrow or custodial account liability    Loans and other payables to current and former officers   500000Secured mortgages and notes payable to unrelated third parties 000Other liabilities 000Total Liabilities 532498561512593145     Net Assets or Fund Balances    Unrestricted Net assets 11946031067675752985Temporary net assets 1670170124152025869Permanently restricted net assets 465274652746527Total net assets or fund balances 29113002355722825381Total Liabilities and Net assets or fund balances 344379829172321418526
Financial Health Analysis
Expenses
The size of the Abraham Fund Initiatives can be determined by the amount of its annual operating expenses. The larger the size of an NGO, the higher the amount of its annual operating cash flows, and this is reflected in the organizational mission, strategy, goals, and the external environment. Thus, the organizational growth of a particular non-governmental entity is shaped by its mission and whether the donations and grants from donors can be sustainable in future. Therefore, growth is evident in an increase in the annual operating expenses of an organization depending on the external environmental factors, and the level of financial support - from its guarantors, donors, clients, and other financial support programs. In order for nonprofit organizations to be financially sustainable, there is the need to cover fully the costs of doing business such as grants paid, benefits paid to or for members, employee compensation, and fund raising fees.
In such a way, the Abraham Fund Initiatives should be able to cover both its direct costs, such as Program service costs, and its indirect costs that include professional fund raising fees and other expenses. In addition, additional expenditures will have to incur so as to strengthen the Nonprofit’s balance sheet. Such costs that have been incurred by the organization include increased investments in fixed assets and long-term investments in program-related and publicly traded securities.
The size & growth trajectory of the Organization
Expenses 201120122013Total Expenses393692941228642544766Growth Rate6.81%4.72%-38.28%
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There has been a general decline in the expenses of the organization given that the percentage decline in 2013 was at -38.28% against the previous year’s 4.72%. In 2012, the total expenses of the Abraham Fund Initiatives amounted to $3936929. The amount slightly increased to $4122864 in the following year. However, there was a steep decline in 2014, with the total expenses declining to $2544766, which was attributable to a fall in the grants and similar amounts paid. Thus, given the declining trend in annual operating costs, the growth trajectory of the Abraham Fund Initiatives is said to be contracting as it can be seen in the declining linear trend.
The notable trends in key expense categories
 201120122013Grants and Similar amounts paid281262130317761607758Benefits paid to or for members000Salaries, other compensation, employee benefits801833739700668683Professional fundraising fees0 0Other expenses322475351388268325Total expenses393692941228642544766
As a % of total expenses201120122013Grants and Similar amounts paid71.44%73.54%63.18%Salaries, other compensation, employee benefits20.37%17.94%26.28%Other expenses8.19%8.52%10.54%
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The major expenses for the organization included grants and similar amounts paid, benefits paid to or for members, salaries, other compensation and employee benefits, and professional fundraising fees. The grants paid formed the largest portion of the costs, and they were crucial in driving the overall growth of the firm. The grants and other payments formed the single largest form of expense at 71.44% in 2011, which rose to 73.54% in 2012, and 63.18 in 2013. The second major expense for the Abraham Fund Initiatives was personnel costs, which accounted for 20.37%, 17.94%, and 26.28% of the total expenses for 2011, 2012, and 2013 respectively. The other expenses accounted for 8.19%, 8.52%, 10.54% of the total expenses for 2011, 2012, and 2013 respectively. Based on the expense analysis, it can be concluded that the grants and similar payments have declined significantly in the latter years because of contraction of business operations. However, there has been a rising trend in the personnel costs and other costs due to the increasing complexity of the program services.


The annua...