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Building Capacity Builders, Part 2: The Investee

Posted by Cecilia Garza

SVP Partners Tanya Anderson, Debbie Newell and Paul Cavanaugh had their first meeting with Open Arms Perinatal Services at their location in North Beacon Hill just as spring was settling into 2015. They were cautious, fully aware that finances can be a sensitive subject for anyone. But as it turns out, they had nothing to worry about.

Co-founder and executive director of Open Arms at the time, Sheila Capestany, had been waiting for an opportunity to take their finances to the next level. Also, the meeting space, true to Open Arms’ character, was like sitting in a family living room, taking the stress out of the air.

“I think they meet there with mothers and their babies. It needs to feel warm and comfortable,” Tanya remembers. “So it was the perfect environment to start this conversation, because normally in finance you sit at a table that’s cold and stark. It sort of took the thing down a notch.”

Open Arms was the first of three organizations to test SVP’s financial health assessment. The agency provides women from marginalized communities support through pregnancy, birth and postpartum. By selecting women from the communities they serve to be trained as doulas, Open Arms has the capacity to work with mothers in 17 different languages. Their Outreach Doula Program is also the first of its kind to receive national accreditation from HealthConnect One.

When SVP approached Open Arms about going through the assessment, it was a strange time for the organization. The executive director was months away from transitioning her leadership of the organization.  And in the last three years they lost two major funding sources, each circumstance requiring the team to work through the change as seamlessly as possible. In the first case, a 10-year commitment to support a large initiative that Open Arms was a part of was ended five years early. The funder decided to end the project not because Open Arms and other partners weren’t fulfilling their agreements but because the grantor’s focus had changed. Fortunately Open Arms was notified a year in advance, and with some heavy lifting was able to replace most of the lost income. In the second case, a three-year contract for a peer counseling breastfeeding program was moved to a different organization a year before the contract ended. Open Arms was forced to lay off the program director, and the eight women peer counselors transferred with the program.

Meanwhile, one of their young doulas was facing much tougher challenges. Just after the organization lost the first funding source, she was diagnosed with breast cancer. After fighting for two years, she passed away shortly after Open Arms lost the counseling contract.

“It was just a very, very hard time,” says Sheila.

“It deeply affected staff morale, on a soul level. One of the things that Open Arms is, is that it’s a community as much as it is an organization. And it just felt like the community was going through a hard time — but we weren’t going to fall apart.”

Sheila explained that as the executive director she was constantly asking herself how she could build Open Arms in a way that kept behind-the-scenes issues from adding to staff stress.

“How do people grieve the loss of a coworker who’s really like a sister, and make room for that in all of our policies?” she says. “I felt like financial management was one of the big pieces of that. It gives the staff the opportunity to do their work better if we have smooth-functioning infrastructure.”

Even though they had experienced major funding changes in the past two years, Open Arms was not looking at a desperate financial oversight like some of the organizations SVP had seen merge or close over the years. What they were enduring was an uphill battle, the kind of hurdles most nonprofits their size face.

In 2011, following the departure of their bookkeeper, Open Arms contracted 501 Commons and Sheila filled the counterpart role of managing finances. Their financial system was completely overhauled. Yet while their processes were more transparent, their reports still weren’t informing decisions. The board’s limited understanding also left a gap between the kind of reporting they needed and the kind of reporting they were receiving.

“I felt like we had good processes in place, but it didn’t all hang together,” Sheila says. “It kind of lacked that overall vision of what financial management looks like.”

So while members of the Finance Community of Practice describe prudence going into that first meeting, Sheila describes the assessment as a huge act of partnership between Open Arms and SVP.

“Oh, I was very excited,” Sheila says. “I know that I know a lot, but I know what I don’t know. And finances were my biggest learning curve when I came into the job.”

As the organization’s financial manager as well as executive director, Sheila held a lot of knowledge about their processes in her head. The assessment provided a new opportunity to get that information in writing and shed light on how to move forward. It was also a chance to get the board engaged in a way they had been craving, and empower them around dollars, financial management and fundraising.

Through the assessment, Tanya worked with Open Arms to create a cash flow analysis, finally putting a finger on what the organization’s fundraising pattern was compared to their financial needs. If they were spending the same every month, but had dry months in fundraising, problems come up. This, along with tracking restricted funds next to unrestricted funds, placed the organization in a better position to start building reserves. Fundraising was not new information to the board and staff, but having a better understanding of where they were gave them better direction to start fundraising for growth.

“I had been wanting a cash flow analysis for a couple years, and just could never wrap myself around it,” Sheila says. “So that information I kept in my head. I could tell you what our dry months were. I could try to walk our board through what they were seeing.”

The work began just a few months before Sheila’s departure, a seemingly bad time to begin a project of this nature, but one that, instead, set the stage for achieving longstanding aspirations at Open Arms. When current Executive Director Dila Perera came on board, she had a clear picture of the organization’s financial health, processes she could follow, and a board that could play a more meaningful role.

“One of the things that came out of the assessment is that we are relatively solid for a small organization, and I think it’s just going to make us stronger,” Dila says.

Open Arms Mother and Baby

Open Arms received new funding this year from one of their long-time supporters, Thrive Washington, to expand their home visiting program. The grant will amount to $148,000 and allow Open Arms to train 20 Somali, Latino, African American and ultimately Native women to serve their communities as health workers. It will also allow the organization to begin hiring more staff to serve more clients, effectively tripling the size of their Outreach Doula Program.

The new grant is a huge win for Open Arms. And having gone through the assessment, Dila says, the organization is better equipped to handle it. The expansion will require a significant startup and upfront costs as they train new trainers and then new staff. Since the grant is based on reimbursement, the financial reporting the assessment put in place has given them a way to really assess their bandwidth in operating costs and to plan accordingly.

“We are really actively thinking about how to build a longer runway for Open Arms so that we can be better positioned to weather changes in our funding, grants that are based on reimbursement and other new opportunities,” Dila says.

As executive director, Dila is still very much the organization’s CFO. In the past year, though, they have also added a treasurer to the board and now cite the assessment when applying to new grants.

“A lot of the changes that were suggested by the assessment strengthened the transparency of our finances so that it was more accessible to more people,” Dila explains.

“So I’m still definitely the CFO, for certain, but I feel like there are more people who have a higher level of information and insight into our finances now, between the board and staff, than there were before I started.”

Building on the success with Open Arms, SVP’s Finance community-practice-timeline-graphic-revisedCommunity of Practice has gone through the financial health assessment with seven organizations thus far, with three more planned over the next year. By 2017, the process will be integrated into the first year with all incoming investees.

For Tanya, leaving the first meeting with Sheila and seeing how the organization took the assessment and ran with it solidified the kind of work she does outside SVP and the work she and the Finance Community of Practice spent so long developing.

“It was affirmation,” she says. “I think we could see potential of what this could mean for other organizations if it went the same way.”

Continue reading Building Capacity Builders, Part 3: The Philanthropist to learn about the transformation Tanya experienced working closely with the SVP Finance Community of Practice and how her definition of philanthropy has subsequently evolved over the years.


Cecilia Garza_small

Cecilia Garza is SVP’s communications manager. In her free time, she enjoys sailing the Puget Sound by way of her small yet comfortable Coronado 25’ and romping the beach with her 10-pound Italian Greyhound.

Learn more about Cecilia and read more of her work here.

2 Comments:

  1. Pingback: Social Venture Partners » A Head for Numbers, a Heart for Change

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