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Should We Close Our Non Profit

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Tim Sid

Junior Member
What is the name of your state (only U.S. law)? Washington
I am a member of a non profit organization which has struggled for the past couple of years. Our funds for operating the business end are getting low. The funraisers we do really help our community and they are still doing well. We support three schools in our area for low income families we help the local food banks, heart disease research & cancer research. We run a social room & kitchen to pay the bills (Insurance, Power, Property Taxes Ect.) Business has picked up over the last 4 months we changed our menu cleaned & painted to make the business more desireable. We are now making enough to cover our current bills just barely. When things were going well in the past we took money every week to put in the property tax & insurance fund to make sure we had enough to pay them. We have been doing this for the last 4 months, but we were unable to do this for 6 months prior. We own the property outright (no mortgage) some of our members think we should shut it down & walk away because we do not have enough to pay the property tax & insurance ($11000). Some think we should scale back some of our business to lesson cost. I diagree I think we should loan against the property to keep it open. We just started making enough to pay the bills with the changes we made why would we scale back. The property is valued at over $300,000 why would we walk away when we have so much equity available? Is it a bad idea to mortgage to stay open? Is it better to turn the keys over & let the board sell the whole thing use the money how they feel? HelpWhat is the name of your state (only U.S. law)?
 


dogmom228

Member
What is the name of your state (only U.S. law)? Washington
I am a member of a non profit organization which has struggled for the past couple of years. Our funds for operating the business end are getting low. The funraisers we do really help our community and they are still doing well. We support three schools in our area for low income families we help the local food banks, heart disease research & cancer research. We run a social room & kitchen to pay the bills (Insurance, Power, Property Taxes Ect.) Business has picked up over the last 4 months we changed our menu cleaned & painted to make the business more desireable. We are now making enough to cover our current bills just barely. When things were going well in the past we took money every week to put in the property tax & insurance fund to make sure we had enough to pay them. We have been doing this for the last 4 months, but we were unable to do this for 6 months prior. We own the property outright (no mortgage) some of our members think we should shut it down & walk away because we do not have enough to pay the property tax & insurance ($11000). Some think we should scale back some of our business to lesson cost. I diagree I think we should loan against the property to keep it open. We just started making enough to pay the bills with the changes we made why would we scale back. The property is valued at over $300,000 why would we walk away when we have so much equity available? Is it a bad idea to mortgage to stay open? Is it better to turn the keys over & let the board sell the whole thing use the money how they feel? HelpWhat is the name of your state (only U.S. law)?

My suggestion would take a look into the business itself. Does the current financial status justify keeping it open? What can you forecast? Look at the financial statements. They will tell you a lot about what you need to know, and can give you some of the answers you are looking for. I'm telling you these things from an Accounting student's point of view. If the forecast looks good, go fir it. If not... well... there are decisions that have to be made and these decisions affect the business and the community. You might seek the help of a financial advisor or business advisor if you have the ability. Good luck!
 

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