Financial Equilibrium and Strength

• Annual budgets support 3% increase in net assets
• Capital reserve funded for long-term assets
• Endowment created for staff development
• Increase endowment to obtain predictable philanthropic support
• Develop new policy for the endowment spending rule

Photo: Brad Christensen

We will continue to manage the financial resources of NOLS, in a manner that builds on the past, to support our strategic goals and to insure the continuation and expansion of our mission into the future.

Our financial resources that have been generated by operations and by support from our donors are a key responsibility and opportunity for NOLS. We invest and use our financial reserves to support our students and mission while protecting the integrity of our financial resources, including our endowment. Annual budgets in support of our operating plans will achieve an increase in net assets that is equal to or in excess of 3% of total operating revenue to be supportive of our current goals and are also structured to insure the future of the school and our mission. We operate based upon financial plans that are both prudent for today and opportunistic for tomorrow. Resources are allocated in terms of clearly articulated priorities that contribute to the advancement of our mission.

Further Goals and Tactics
1. Create and fund a capital reserve for our long-term assets equal to 15% of their replacement cost by annually designating the cash flow generated by depreciation into this reserve for the next 12 years.

2. Create an endowment for the development of staff to be partially funded by current cash reserves with an additional allocation in each of the next five years reaching a goal of $1,000,000 designated from our operating cash.

3. Continue to increase the identified operating cash reserve goals and keep them in line with our growth and inflation.

4. Incorporate all of the designated amounts into one investment strategy that will maximize the investment returns based upon the time horizon of these designated amounts.

5. Increase the role of philanthropy beyond support of non-operating expenses by increasing the percentage of total operating revenue derived from the annual fund and endowment release by 25% by 2013.

6. By 2013, increase the endowment so that the total of invested assets and pledges is equal to total operating revenue, which will increase the percentage of predictable philanthropic funds available to our operating budget.

7. By 2009, develop a new policy for the endowment spending rule so that it will be adjusted in alignment with the current conditions and in support of the overall strategic plan.