Year of Publication



Martin School of Public Policy and Administration

Date Available


Degree Name

Master of Public Financial Management

Committee Chair

Dr. Urton L. Anderson

Executive Summary

Many factors can affect the financial status of a nonprofit entity, but at the core level, financial condition is the ability for an organization (for-profit or not-for-profit) to meet current and future financial commitments. Moreover, further insight into this definition is more complex in nature according to some academics. Maher, Ebdon, and Bartle (2020) mention definitions for financial condition that focus on time. For example, short-term financial health typically focuses on the ability to meet obligations in a 30 to 60-day period with cash on hand. Long term financial condition includes the capacity for an organization to meet annual obligations and other long-term liabilities like employee benefits. McDonald (2017) provides that financial condition also pertains to the ability of a local government (or a nonprofit) to provide services at an adequate level. Assessing financial condition is helpful to both donors, the public, nonprofit decision makers, and other stakeholders. Federally required financial disclosures like Form 990 and other voluntarily audited disclosures can help stakeholders of nonprofits determine if an organization has the resources needed to satisfy its mission. Assessing financial metrics that concern liquidity, expenses, revenue, operations, and others are helpful in the determination of overall financial health. Again, the main goal of a financial condition analysis is to ascertain that an organization can meet current and future obligations.

The following research presents the results of a financial condition analysis conducted for three Louisville, Kentucky based arts nonprofits: the Louisville Orchestra, the Louisville Ballet, and the Speed Art Museum. These organizations were chosen because these are some of the premier arts organizations in Kentucky. Additionally, because these organizations are not-for-profit entities their financial data is publicly and readily available due to required disclosures by the IRS in Form 990. This research assessment provides stakeholders of nonprofit entities with insight into the analysis of financial condition using these three arts organizations as examples.



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