We studied the averages of working capital for organizations by sector, budget size, geographic market, and BIPOC/Non-BIPOC for the year 2019
2019 Key Takeaways, By Sector
See Budget Ranges by Sector
To appreciate working capital levels for organizations of different size, it helps to understand what’s going on with working capital's component parts (not shown in the chart).
The Starting Point: Unrestricted Assets
Small (those that reported detail on assets by restriction) organizations’ level of unrestricted current assets was 61% of total expenses, whereas that of Medium and Large organizations was roughly 41%.
Layer in Unrestricted Current Liabilities
As organizations increased in size, their unrestricted current liabilities increased in proportion to their unrestricted current assets. Large organizations’ relative level of unrestricted current liabilities limited their working capital.
A Balance Sheet Side Note
On average, only Large organizations had access to readily available cash and investments that exceeded the amount captured as unrestricted current assets. This measure includes unrestricted and temporarily restricted cash, cash equivalents, investments, and line of credit limit. Large organizations that have a long planning horizon or plan multi-year projects depend on the release of previously raised, multi-year money sitting as temporarily restricted cash. We know from the SMU DataArts Fundraising Report that as organizations grow in budget size, the release of restricted net assets into the current year – a clear sign of multi-year planning – becomes an increasingly important part of the year’s contributed revenue. Galvanizing donors behind a big idea that will occur in the future appears to be a hallmark of growth.
2019 Key Takeaways, By Geography