socw 6371: community & admin practice class 9: financial management: budgeting, budget...
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SOCW 6371: Community & Admin Practice
Class 9: Financial Management: Budgeting, Class 9: Financial Management: Budgeting, Budget justification, Fund Raising, ReportingBudget justification, Fund Raising, Reporting
UTA School of Social Work6371: Community & Administrative Practice
Dr. Dick Schoech
Copyright 2009 (permission required before use)
Suggest printing slides for class using: Print | Handouts | 3 slides per page | grayscale options 1
SOCW 6371: Community & Admin Practice
Review Previous ClassesReview Previous Classes
2. Theories, values, perspectives
3. Problem definition, theories of need
4. Capacities and needs assessment
5. Evidence based interventions and logic models
6. Program descriptions, community linkages
7. Mission, Goals and Objectives
8. Information Management, performance measurement, program evaluation
9. Budgets and budget justification & Financial management
and fund raising 10. Leading, implementing, scheduling, service marketing, public relations§
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SOCW 6371: Community & Admin Practice
Views of an AgencyViews of an Agency
View = colored glasses to filter other views
• Personnel mana = view agency as people
• Information mana = agency as info flow
• Facilities mana = agency as building & things
• Financial mana = agency as money
• Collaboration = agency as part of network
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SOCW 6371: Community & Admin Practice
Budget type: line itemBudget type: line item
Definition Cost by item
Advantages of Line Item• Easy to understand
Disadvantages• Focuses attention on input & throughput vs.
outcomes §
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SOCW 6371: Community & Admin Practice
Line Item ExampleLine Item Example
• Coley & Scheinberg, pg. 78, & 89
• KKM, pg. 182 & p. 240
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SOCW 6371: Community & Admin Practice
Budget type: programBudget type: program
Def = costs out by each program
Advantages– Relates resources to programs– Focus on programs & output– Helps planning and evaluation
Disadvantages– Must cost out everything (staff time, supplies) by
program– Time and complexity §
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SOCW 6371: Community & Admin Practice
Program Budget ExampleProgram Budget Example
• Focuses on cost to achieve objectives of a program/service (if you have outcome objectives, it will focus on outcomes)
• KKM, 186, 245
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SOCW 6371: Community & Admin Practice
Budget type: Budget type: performance/functionalperformance/functional
Def = cost out outcome objectivesAdvantages• Focuses on cost for outcomes• Compares costs to achieve each objectivesDisadvantages• Requires cost per unit of service• Requires calculating indirect costs• Most people think in terms of programs and
not objectives §
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SOCW 6371: Community & Admin Practice
Performance/functional Performance/functional budget Examplebudget Example
• Focuses on functions such as training and evaluation
• Coley & Scheinberg, p. 79, table 8.2
• KKM, p 201
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SOCW 6371: Community & Admin Practice
Budget JustificationBudget Justification
• Addresses all major items in the budget
• Shows how costs are calculated
• Tries to show costs are reasonable
• Addresses any item that could be controversial
• Justifies matching funds
• Tries to give a cost per unit of service
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SOCW 6371: Community & Admin Practice
Budgeting TechniquesBudgeting Techniques
Cost Benefit analysis– Translates outcomes into economic benefits/cost for service
Cost effectiveness analysis– Focuses on cost-efficiency
Break even analysis– Focuses on when you stop loosing money
Zero-based = levels from 0+– Links planning, budgeting, and evaluation– Challenges basic service assumptions– Time consuming – Focuses attention on costs vs. outcomes– Destructive to staff morale: threatens jobs §
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SOCW 6371: Community & Admin Practice
Financial reportingFinancial reporting
• Statements (periodic summary)– Income, expenditures, balance– Changes in fund balance
• Annual reports• IRS 990 www.give.org
www.guidestar.org • www.charitynavigator.org• Audits (using approved procedures) §
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SOCW 6371: Community & Admin Practice
Overview of Financial Overview of Financial ManagementManagement
• Financial management– Non-profit accounting – Budgeting– Financial reporting
• Funding raising– Often human service $s have strings
attached §
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SOCW 6371: Community & Admin Practice
Financial Management Financial Management AssumptionsAssumptions
• Not a major contingency (people, task, structure, tech, goals)
• A tool/resource to support mission – (treat same as computer, office, people)
• Diversity of funding sources is required• One of the best managed resources in
HSOs (compared to people, information) §
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SOCW 6371: Community & Admin Practice
Basic TermsBasic Terms
• Accounting = Standard tools & procedures to manage money
• Budgeting = techniques/processes to project/track income, expenditures & balances
• Budget period = That period which the budget covers, fiscal year, calendar year, academic year
• Direct costs = expenditures requiring new $s, e.g., salary, equip
• Indirect cost = overhead (electricity, bookkeeping)• Matching funds = hard $ or In-kind (soft) e.g. volunteer
hrs)• Costing out = determining costs as in finding unit costs• Capital expenditures = money for equip & buildings §
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SOCW 6371: Community & Admin Practice
Non-profit Accounting--Non-profit Accounting--bookkeeping methodsbookkeeping methods
• Cash method– Record credit or debt as money is exchanged
• Accrual method– record when transactions occur, accumulate debt
and credit
• Modified cash/accrual method– record revenue on cash basis, expenditures on an
accrual basis §
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SOCW 6371: Community & Admin Practice
Non-profit Accounting -- Non-profit Accounting -- bookkeepingbookkeeping
• Accounts– the categories/funds $s are charged or credited to
• Chart of accounts– standard list of accounting codes, usually based on
items in the budget
• Journals– list of entries recorded as they occur, e.g., accounts
receivable, accounts payable, payroll
• Ledgers– list debit and credit column for each account §
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SOCW 6371: Community & Admin Practice
Securing FundsSecuring Funds
• Fundraising
• Sources of Funds
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SOCW 6371: Community & Admin Practice
Fundraising BasicsFundraising Basics
• Social Workers often are not good at asking for money so use committees and board members
• Use fund raising committee to educate and solicit indirectly
• Think that you are giving people an opportunity to give to a cause they like
• Takes a consistent and managed effort• Relationships are important as in direct
practice §
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SOCW 6371: Community & Admin Practice
Sources of Fund (1 of 2)Sources of Fund (1 of 2)
• Direct appropriations by government – (TX Victims Assistance funds)
• Non-service alternatives – (Low income tax credit, child support enforcement, property
tax freeze for seniors, ADA)
• United Way allocations• Grants (federal and foundation)• Contracts for services
– TDFPS and Catholic Charities• Fees for services §
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SOCW 6371: Community & Admin Practice
Sources of Fund (2 of 2)Sources of Fund (2 of 2)
• Special projects and events– Byron Nelson Golf Classic—Salesmanship Club
• Direct mail campaigns • Sponsorships & advertising
– Grocery store cards
• Noncash donations, e.g., items, cars, stocks• Planned giving, endowments, nonprofit capital,
e.g., venture philanthropy http://www.dsvp.org/
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SOCW 6371: Community & Admin Practice
Reducing ExpendituresReducing Expenditures
• Zero based budgeting
• Diversity funding sources
• Brody (text for SOCW 6314), pg. 243 Has good list of 50 ways to reduce expenditures
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SOCW 6371: Community & Admin Practice
Implications for program designImplications for program design
• Always budget total costs• Always show donated column• Budget justification is very important
– Include all items– Address potential issues, cost per unit of service
• Be clear on budget period – Hire accordingly, 10 months vs. one year
• Well designed programs are much easier to fund (good logic model) §
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SOCW 6371: Community & Admin Practice
ConclusionsConclusions
• Financial management should be– Proactive vs. Reactive– Planning vs. Control– Outcome vs. Input
• Use good software & management
• Use board & committees for expertise, education and oversight
• Diversify to many sources of funds• Expect accountability to increase and agencies able to
show accountability to grow §
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