Overview:
A nonprofit school for children was facing a severe financial shortfall with no clear understanding of its cause. Carey & Co got to the bottom of the deficit and provided leadership with the financial clarity needed to make informed decisions, leading to strategic changes that restored stability and positioned the organization for long-term success.
Challenge
The nonprofit was experiencing a growing budget deficit that neither the CEO, COO, nor the board could fully explain. While they recognized the issue, they lacked visibility into its scope, cause, and potential solutions. Leadership had no financial roadmap, making it difficult to take action. Without clarity at all levels, the organization risked further financial instability and misallocated resources. They engaged Carey & Co to conduct an objective financial review, providing leadership with the clarity and data necessary to understand the problem and develop an informed path forward.
Solution
With limited financial visibility at the outset, Carey & Co first worked to understand the key players and determine where to gather accurate financial data. They had to navigate multiple layers of leadership—including the COO, CEO, and board—ensuring each group had the financial insights they needed while maintaining transparency across the organization.
The Carey & Co team worked closely with the assistant controller to reconstruct the organization’s financial picture and identify gaps in reporting. Through a department-by-department budget analysis, they discovered a $5.5 million deficit, largely driven by unbudgeted staffing decisions—dozens of employees had been hired outside the approved budget, significantly increasing payroll and tax expenses.
In a pivotal October finance meeting, they presented these findings to the board, giving them a clear financial picture. Because they had kept the COO informed throughout the process, the COO was already prepared with a strategy, allowing leadership to act quickly.
In addition to identifying the deficit, Carey & Co provided cash flow projections for 2025 and 2026, giving leadership a clearer understanding of the long-term financial outlook. These projections helped the board and leadership assess the impact of potential cost-saving measures and make informed decisions about the organization’s future.
Result
With Carey & Co’s guidance, the nonprofit stabilized its finances, prevented further losses, and implemented lasting structural improvements. By quantifying the $5.5 million deficit and identifying the root cause, leadership was able to take decisive action to correct the budget shortfall and realign expenses with revenue.
The organization now operates with a balanced budget and greater financial stability. With improved financial oversight and accountability, leadership has clearer visibility into spending, allowing them to make informed financial decisions and avoid similar issues in the future.
With a structured financial roadmap in place, including cash flow projections for 2025 and 2026, leadership can now plan strategically, anticipate financial risks, and ensure long-term sustainability. Notably, the findings also led to broader structural and leadership changes as the board reevaluated financial oversight and decision-making.
Throughout the process, Carey & Co maintained transparency with all parties involved. By focusing on the facts, they successfully navigated the sensitive internal dynamics while helping to restore the organization’s financial footing.