Understanding the Fiscal Health of an Organization

Introduction

Fiscal health is a concept used to designate the current state or financial situation of a person, organization or an agency. Variables used to over a descriptive understanding of fiscal policy include the volume of savings, retirement proportion, and the percentage of income used in non-discretionary expenses. Also, the aspect of solvency is of at most importance as far as the fiscal health of an organization is concerned. Non-profit organizations usually have a challenge of offering protection over their viability and financial health. Financial mishaps and bankruptcies frequently occur because of lack of integrity, poor management and inability to monitor significant fiscal resources. This essay aims to demonstrate an understanding of the basics of the fiscal health of an organization, through analyses of one healthy organization and one not-so-healthy organization. 

Healthy Organization: The San Diego Symphony Orchestra

The San Diego Symphony Orchestra is a highly rated charity organization based in San Diego, USA. For decades, this organization has managed to provide high quality and superior musical experience to the society. Its music, innovation, and educational programs are designed in such a way that they can appeal to all age groups in society. According to the Charity Navigator, the San Diego symphony orchestra has an overall score and rating of 92.51%; its financial rate is 93.07% while the rate of accountability and transparency lies at 92.00% (“Charity Navigator – Rating for San Diego Symphony Orchestra”, 2019) . The overall impression is that the organization has managed to remain as a leading orchestra due to its impeccable financial management approach, a need to touch the lives of each member of the society and an intense urge always to provide high-quality music. 

Not-So-Healthy Organization: The Seattle Symphony Orchestra

The Seattle Symphony Orchestra is an organization which provides musical products and services related to historical activities, cultural activities, and youth organization activities. The organization has been operation since November 1965, and it is based in Seattle. In the year 2018, this orchestra won the Gramophone Classical Music Awards (“Seattle Symphony Wins Orchestra of the Year!”, 2019) . It was an award awarded due to its contribution towards the production of recorded music throughout the year. The idea that the Seattle Symphony Orchestra has not been given any rate yet translates to the fact that it is a not-so-healthy fiscally. A more significant percentage of its finances usually come from the government grants and paid services. 

Comparison and Conclusion 

To rate an organization, charity navigator relies on the fiscal health of the organization under review. It uses finances due to the individual organization to determine the rating. As such, the charity navigator characterizes Seattle as “in Deep Financial Trouble” and San Diego as “Highly Rated” because the former receives less than 40% and the latter receives more than 40% of their finances from own funding. 

The numbers of the organizations help to determine their fiscal health respectively. The figures show that the San Diego Symphony Orchestra financially stable as compared to the Seattle Symphony Orchestra. 

In addition to the factors mentioned above, information such as the number of performances carried out per year is needed to determine the fiscal health of an organization. It is also essential to provide a comparison view of the percentage of tickets sold that major performance and how successful the performances tend to be. To evaluate the fiscal health of an organization, one also needs to take into consideration the profitability ratios, expenses, revenue, activity ratios, debt ratios, and cash balance. 

References

Charity Navigator – Rating for San Diego Symphony Orchestra. (2019). Retrieved from https://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=7472

Seattle Symphony Wins Orchestra of the Year!. (2019). Retrieved from https://www.seattlesymphony.org/watch-listen/beyondthestage/orchestra-of-the-year