In 1997 and 1998, James Management Associates (James), an accounting and management consulting firm specializing in health care in Nashville, Tenn., researched, assessed, and made recommendations on the issue of small nonprofit agency cash flow and financial management problems.

Small community-based organizations and nonprofit organizations are important laboratories for the development and demonstration of many of the Robert Wood Johnson Foundation's (RWJF) programs and interventions. Many such agencies experience financial difficulties.

The grantee organization interviewed staff from 20 community-based organizations funded under various RWJF national programs.

Key Findings

Project findings suggested the following:

• Cash flow and financial management issues are more prevalent in newer or smaller community-based organizations or those operating in a changing environment.
• These issues always affect the effectiveness of the community-based organization's programs, but the degree and extent of the impact vary greatly, from mild to fatal.
• Resources exist in various regions of the country for assistance to community-based organizations; however, there appears to be a lack of information about the quality of these resources or how to access them.

Key Recommendations

• Initiate changes to RWJF's internal processes and programs and increase core support funding for certain costs.
• Assume more active development of grantee management capabilities.
• Collaborate with other philanthropic organizations to pursue infrastructure development initiatives.

Funding

RWJF supported the project with a grant of $50,000 between December 1997 and February 1998.