Mid-Year Update on F4DC’s Finances

Like the rest of the world, F4DC has been affected by the global recession—we just don’t have as much cash coming through as we used to, and we’re not able to predict very well what our cash flow is going to be like from this year to next.

“Why’s that?” you may ask. It’s because our financial resources come from the estate of my father (who died in January 2007), and the recession is making it very hard for the estate to “settle.” As I said in an earlier blog post:

It’s because of the kinds of investments that my Dad made, which were mostly not in the stock market or other publicly traded instruments. He mostly invested in privately arranged loans to commercial real estate developers, start-ups of companies making medical devices, that kind of thing. We can’t get the money in these kinds of investments “on command.” We have to wait till the loan agreements become “liquid,” or pay off in the form of cash. And then we have to wait a little while longer while the estate settles this aspect of its business and pays off its various beneficiaries, of which F4DC is one.

One effect of the global recession is to slow that whole liquidation process down even more. So, we’re getting by on smaller and somewhat unpredictable distributions from the estate.

With the downturn and uncertainty—in fact because of the downturn and uncertainty—we’ve made efforts to cut way back on our overhead so that we can put more of our available resources into the community, through grants (see the news about our new Matching Grants Program) and special projects. (See Ed’s blog posts about the Southern Grassroots Economy Project, which has the potential to build a healthier, sustainable economy over the long run.)

You can see how some of these changes are playing out in two financial documents you can download: Our June 30, 2010 Balance Sheet (pdf) and January – June 2010 Income and Expense report (pdf). The balance sheet shows that we have about $375,000 in the bank: not quite where we thought we’d be three years out from the founding of F4DC, but enough to make a difference in reaching our mission.

In the Income and Expense report, you can see that we’ve had about $145,000 in income in 2010. We’ve been advised that this is basically it for the year, unless one or more of the private equity investments makes a surprise move toward liquidity.

Our biggest expense category so far this year is personnel, but this isn’t going to be ongoing. This big number was incurred at the start of the year and reflects the severance payouts we made to our staff as we bid them farewell.

Now, I’m pleased to say that our biggest ongoing expense category is grants and awards—and it’s about to take off substantially with the new Matching Grants Program. And the work we’re doing to contribute to the development of the Solidarity Economy in the Southeast is going to be showing up in our travel and meeting expenses. Keep following Ed’s blog posts to see how this evolves: we’ll be meeting, convening, and spreading the learning of folks who are actively building productive, collaborative, democratic, community-based enterprises.

F4DC’s 2009 990-PF form

For an organization that talks a lot about transparency, it’s been a while since we’ve updated the financial information on our website. F4DC’s been through a big transition in the last year. We’ve moved from being a staffed organization with an office to an all-volunteer organization working out of our homes and coffee shops. It’s taken some time, but we are officially caught up!

You can now download our 2009 990-PF form for review. The 990-PF is kind of like a foundation’s tax return. It’s the official report we make to the US Treasury every year, in which we talk about how much money we have and what we did with it. All non-profits file a 990, and foundations (a special kind of non-profit) file the 990-PF. If you ever want to check out a non-profit’s funding sources and expenditures, ask to see their most recent 990’s (or 990-PF’s).