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BUDGE. Making the Hard Financial Decisions. When your Budget wont. Balanced Budget. How to find ways to prepare and maintain a realistic & BALANCED school budget despite: Decreased enrollment, Increased operating expenses, Financial hardship and - PowerPoint PPT Presentation

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When your Budget wont Budge

When your Budget wontMaking the Hard Financial DecisionsBUDGEBalanced BudgetHow to find ways to prepare and maintain a realistic & BALANCED school budget despite:

Decreased enrollment, Increased operating expenses, Financial hardship and A lack of commitment to Christian Education.

IntroductionWhat is the Current Enrollment?What is the Projected Enrollment?Will you end the year in the red or the black?Can you afford to keep everybody on staff?Will you upgrade any books this year?Will you increase the tuition and/or the church subsidies?How much of the back tuition can you collect before the end of the year?You are barely over the current school year and now you have to start thinking about the budget for the next school year. What are some of the questions you need to ask when preparing the budget?3Decreased EnrollmentIf you dont know why your enrollment is down - No amount of money will save you.

WHY?!?!?!

Why?!?!You can say that you need more buildings, more staff, the latest technology, or a larger statue, but if those arent the reasons why your enrollment is down, then all you will have is empty buildings, non-productive staff; unused software, and a resting place for more birds.You need to determine why enrollment is down. Ask the right questions, expect honest feedback and be prepared for the stark reality. 4Decreased EnrollmentReputation/Perception Ask what is and fix what you can fixFaculty and Staff Qualifications, Gossiping, AttitudesOutdated Curriculum Plan of action to update Old Buildings and Equipment Plan of action to repair and replaceOld Rumors Dont encourage themNo Extra Curricular Activities Get some. If have some already Play up what you do have.

Decreased EnrollmentSince the origin of their denomination in the mid-1800s, Adventists have promoted Christian education as a means to acquire knowledge from a Christian point of view. Training young people for the mission of preaching the good news of salvation to others was and is one of the main engines for the development of a fast-growing international K-20 system of education. While Adventist church membership has been increasing in North America, where the church originated before expanding overseas, enrollment in Adventist K-12 schools has been consistently declining since the 1980s.Factors influencing enrollment in Adventist K-12 schools: A review of the literatureBy Gus Gregorutti, doctoral student at Andrews University, 2007Increasing operating expensesAn over extended Indian SummerA extremely cold winterOld building or buildingsOutdated equipmentCurriculum UpdatesFood costTeacher/Staff raisesU.S. Post Services increase ratesOffice Supplies

An over extended summer high electric bill

7Financial Hardship

Job lossParents are losing their jobs.Appropriations are getting smallerUnions and/or Local Conferences are reducing education appropriations Deep pockets are drying upPeople who use to donate before dont anymoreChurch subsidies are getting smallerDont have children who attend school. So they dont see the need to give or want to reduce8New Sources of IncomeGrantsRemember free money is never free. Read the fine print and make sure your governing body is in agreement. (Grants, donations)Different deep pocketsThere are members in your church who will never give a dime, unless you personally ask them.Recruit from churches with childrenInvite the children who dont attend to something that showcases the school.Visit churches who dont have children in the schoolTake the childrens program to the churches who have no direct connection to the school.

Cut the parents some slack make realistic payment arrangementsLook for new fundingLook for new deep pockets Just because people dont have children, doesnt mean they dont have a genuine love Christian Education.Give the churches a reminder why they should support Christian Education. Let the churches know they funds they give are put to googUse.

9The parents of today didnt enjoy their SDA Education experience, so they dont send their children .The quality of education is sub par or is the same as the public schools, so why pay?I dont like Teacher Y or Principal X, so I dont want my children to be taught by them.I went to public school and I turned out fine.Id rather invest my money elsewhere.

A Lack of Commitment to SDA Christian EducationTruth be told they did so much dirt back when they went to school that they are afraid the teacher might see them in their children10A Lack of Commitment Shane Anderson How to Kill Adventist Education writes it this way

Think of it this way: Do we really believe that there are large numbers of passionate, highly committed Seventh-day Adventists-who also just happen to think that a school that would teach their children that that very same Adventism is not worth considering? Of course not. Surely what were seeing here is a lack of commitment not just to our schools or other institutions, but to Adventism itself. Here is the core of our current crisis.According to Harold Lee, former president of the Columbia Union Conference, a comparative study between Adventists and 28 other Protestant denominations reveals that members are giving [money] far less today than in the past. In 1968 giving was at 10.8 percent of after-tax income. By 1996 it had declined to 4.5 percent. This decline represents a 58 percent decrease in the portion of income being given by church members. . . . Church members are voting with their feet and with their dollars.1Shane Anderson How to Kill Adventist Education

Budgets Why do we need them?Determine how to get out and stay out of debtBuild an Emergency Cash FundSet & prioritize financial goalsBe a smarter consumerLearn to live within your meansLive on less money, so you can work less

Pay your bills on timeMeet your schools changing financial needsReduce stressDistinguish between wants and needsStop making ends meet by borrowingSleep at night

13Budgeting 101Budgeting lies at the foundation of every financial plan. It doesnt matter if youre living paycheck to paycheck or earning six-figures a year, you need to know where your money is going if you want to have a handle on your finances. Unlike what you might believe, budgeting isnt all about restricting what you spend money on and cutting out all the fun in your life. Its really about understanding how much money you have, where it goes, and then planning how to best allocate those funds. Jerry Vohwinkle Money Financial Planning http://financialplan.about.com/od/budgetingyourmoney/tp/budgeting-101.htm

How to Create a BudgetIdentify your Needs Students, Staff, materials, facilities Identify your WantsMore students, Extra curricular activities, larger buildings, the latest technologyIdentify your IncomeTuition, subsidies, grants, donationsIdentify your ExpensesSalaries, utilities, maintenance, curriculum materialsStudy Previous years for possible trendsDoes an election year make people nervous

Now I say election year, but a church entity, we have constituency meetings, does the fear and anxiety of new or the same leadership cause people to be funny with money?15Who are the StakeholdersWho should have input?Business Manager/TreasurerPrincipalFinance CommitteeSchool BoardConstituent Church PastorsParents/GuardiansLocal Conference

Top 5 Budget BustersStaffing/SalariesPay increases, benefitsBuilding Upkeep and MaintenanceRepairs, replacementsCurriculum and Program UpdatesNew textbooks, software, science, testingAdministrative CostOffice supplies, meetings, classroom materialsUtilities and Day to Day OperatingGas, electric, food service, landscaping

Presenting the Preliminary Budget Remember its not personalBe prepared to go back and make major changes at least 3 times.Ask for suggestionsTake notesShare the hard-making decision with larger body, but make sure they have all the facts.Budgets are NOT written inIt can be..AdjustedModifiedTweakedReworkedSlicedSlashed

If you are a writer your writing becomes a part of you. Its the same for Treasurers, Business managers, principals and anybody else who helps to create the budget. You get it all worked out, so you think and you present with hopes that they will like it, only to have them take out a red pen and start slashing and correcting.However, I have learned through the years being both a writer and a person who deals with the budget. Sometimes a red pen can be very helpful. It takes the pressure of you, you are not the sole bearer of the financial success of the school.19BIG Money vs. Little money

Big Money or Little MoneyWhether you have a money tree in the back yard An envelope hidden under the mattress. An alumnus who just loves their Alma Mater A faithful church member whose belief in Christian Education far exceeds their monthly $10.00 donation

Christian EducationThese are extreme scenarios, but its a reality check. There are schools who have money, but nothing to show for it.There are schools who have no money and wait by the door for the postman to bring a tuition check.21It all comes down to careful money managementEXPENSESINCOMEReviewLook at the factors that affect or impact your budgetenrollment, economics, operating expenses, attitude towards your product

Understand the basics of budgeting and why you need to budget.Needs, Wants, Income, Expenses and History

Budgeting 10123Get input from the StakeholdersProverbs 11:14 - Where no counsel is, the people fall: but in the multitude of counselors there is safety.Proverbs 15:27 - Without counsel purposes are disappointed: but in the multitude of counselors they are established.The first budget usually gets sent backBudgets will need to be adjusted several times before it makes sense and finally g