Financial Ratio Analysis Comes to Nonprofits

Virtually all nonprofit organizations, including colleges and universities, have been adversely affected by declines in governmental assistance, unfavorable economic circumstances, and greater competition for private gifts and grants. Also creating problems for educational nonprofits are enrollment declines and excess staff hired during the expansion years. "Cutback management" has become part of the language of university presidents, museum and hospital directors, school headmasters, church officials, governors and mayors, and other leaders in the nonprofit sector [17, 18].