1. Resources: Budgeting and Cost
S- Sustainability
Resources:
Budgeting and Cost

2. Agenda Discuss readings- Brooks Chapters 6, 7
Brainstorm sources of cost and income
Hands On Activity – Work as a team to Fill in Parameters for First Place Fund for Youth (p.96)

3. Once you have established Community Need developed a Logic Model and formed and Assessment Plan, the next question is, how you will pay for or SUSTAIN your program.

4. Mobilizing Resources Define the Capabilities Needed
Devise a Human Resource Outline to meet each capability need
Develop a resource plan
Put on the Numbers
Brooks Ch 6 p 86

5. 1. Define the Capabilities Needed
Start by reflecting on the activities and who will do them.

6. Figure 6.1 The Capabilities – Resource Model

7. Figure 6.1 The Capabilities – Resource Model

8. 2. Devise a Human Resource Outline to meet each capability need

9. 2. Devise a Human Resource Outline to meet each capability need

10. Figure 6.1 The Capabilities – Resource Model

11. 3. Develop a resource plan

12. Figure 6.1 The Capabilities – Resource Model

13. Figure 6.2 Sources of income for American nonprofits*
* Salamon 2002

14. Income sources Three main sources of nonprofit revenue
Fee income, which is about half of the total
Donations, which are about one fifth
Government, which provides the balance
Figure 6.2 shows income sources for all nonprofits
Different nonprofits rely on different types
Social welfare: 52% government, <1/3 earned
Health: less than 6% is donated
But arts groups are half funded by private giving
Religious institutions are not government funded

15. Figure 6.3 Types of earned income for social enterprises

16. Table 6.3 The Product Profile Map
High mission impact
Low mission impact
Positive profit
Stars
Cash cows
Loss-making
Saints
Dogs
Source: James & Young (2006)

17. Percentage of income from dues
Table 6.4 Revenues from membership dues for various nonprofit enterprises, 2003
Enterprise type
Percentage of income from dues
Labor organizations
66.02%
Social clubs
59.61%
Business leagues
40.27%
Public charities (all 501(c)(3))
0.90%
Source: Steinberg (2006)

18. Table 7.1 Source of donations to American nonprofits, 2005
Living individuals
76.5%
Foundations
11.5%
Bequests
6.7%
Corporations
5.3%

19. Figure 7.1 Average annual contributions to various types of causes and charities among those making positive contributions, 2003

20. Delancy Street- how do they sustain themselves?
15 minute video

21. Sample Programs for Class Final Project
Sample Programs for Class Final Project*indicates may be used as an example in the course
Crime Related
Scared Straight
Community Policing
Fight Crime Invest in Kids*
Neighborhood Watch
Domestic Violence Arrest policy*
Delancy Street Moving Company (job training for ex cons)*- Today’s Example
The city of Syracuse has recently launched a new violence intervention project called Syracuse Truce. Syracuse Truce is a partnership of community members, law enforcement and service providers that is designed to reduce gun violence. Syracuse Truce is based on a model that has proven to be effective in addressing gang problems in Boston, Indianapolis, Lowell and Cincinnati. The model is based on focused deterrence, focusing additional enforcement efforts on the small number of offenders (and their associated gang contacts) who are responsible for a disproportionate share of gun violence. Those individuals and groups willing to cooperate with the message of Syracuse Truce will also be assisted in making connections with service providers and other appropriate programs.   
Human Service Related
Pedal to Possibilities
Job Training Program*
Mental Health Counseling (e.g., engagement calling*)
21 day challenge horses as disability therapy*
Homeless Outreach
Youth counseling sessions
Fit 4 Life Youth Fitness and Anti-obesity program*

22. Lets Look at One Delancy Street Moving Company Mimi Silbert

23. Delancy Street Moving Company
Mimi Silbert
Social Entrepreneurship
Delancey Street is considered a pioneer of social entrepreneurship development in America – developing business skills to help solve social problems. Since 1972, Delancey Street has created 12 successful ventures that have trained residents in marketable skills, created positive interactions between residents and customers in the community, and helped support the organization financially. These include:
Crossroads Café, Bookstore & Art Gallery
Catering & Event Planning
Delancey Coach (Corporate Private Car Service)
Digital Print Shop
Handcrafted Furniture, Ironworks, Plants & Glass, Ceramics
Landscaping
Moving and Trucking
Paratransit Van & Bus Services
Restaurant
Screening Room
Specialty Advertising Sales
Xmas Tree Sales and Decorating

24. Left off

25. Mobilizing Resources Define the Capabilities Needed
Devise a Human Resource Outline to meet each capability need
Develop a resource plan
Put on the Numbers
Brooks Ch 6 p 86

26. Which Software will you purchase?
RaisersEdge
DonorSnap
Tracking Types of Donors
Keeping Track of Donations
Supporting fundraising Activities
Personal Relationships:
-Direct mail, Telemarketing Virtual
-Traditional Media
Avoiding Donor Lapse
Charting Progress toward your Strategy

27. Corresponds with Brooks Chapter 8 Collect Cards
Donor Recruitment
Corresponds with Brooks Chapter 8
Collect Cards

28. Figure 8.1 Spending tradeoffs in fundraising
There are different kinds of donors
Potential donors
New donors
Transition – give a second time
Core – three or more donors
Lapsed – have stopped giving
Lapsed but reactivated
Most donors – as much as 80% – are inactive
Active donors can be in any of the other types
Core donors are the most productive
Figures 8.2 and 8.3 illustrate these types

29. Figure 8.2 The dimensions of a typical list of active donors
According to Merkle- Core Donors provide the biggest revenue even though not the largest percentage of active donors.

30. Figure 8.3 Gift size among active donors to a sample of social service organizations

31. Figure 8.4 The percentage of donors retained from one year to the next
Source: Merkle-Domain

32. Figure 8.6 Average number of donations by different donor types

33. Figure 8.5 The fundraising ecosystem
Strategy, try to Win  Keep  Lift

34. http://www. nptechforgood

35. Fundraising strategies
Win: gain new donors or regain lapsed donors
Example: Habitat for Humanity soliciting volunteers and donors through churches
Keep: maintain donors in the core
Example: World Vision targets donors for retention
Lift: Obtain larger gifts from core donors
Example: MAP targeting the best prospects from donors to increase gift averages
Figure 8.4 illustrates donor retention
Figure 8.5 illustrates the fundraising ecosystem

36. Figure 8.7 The main reasons donors lapse

37. Marketing and Fundraising

38. Nonprofit Technology Network: The State of Nonprofit Data
November 2012

39. Nonprofit Technology Network: The State of Nonprofit Data
Not every nonprofit has the basic infrastructure in place to even track the seemingly easily collectable data
points, however. Among the one-third of nonprofits not tracking these metrics, many reported that they did
not have the technology to track these relatively straightforward numbers. for example, nearly a third cited
not having the technology or knowledge to track opens as their reason for not measuring this
particular metric.
Nonprofit Technology Network: The State of Nonprofit Data
November 2012

40. There are many Donor Development Software Programs to Choose From

41. One of the Most Popular

42. Five types of fundraising activity (1) Fundraising is a major activity for nonprofit managers
1. Personal relationships
Get others on board with personal contact
Letters may not be sufficient to convey that vision
Conversations, tours, and events with direct contact with individuals
2. Direct mail
Although it seems antiquated, it is profitable
Some fundraising firms conduct direct mail for nonprofits, e.g., Easter Seals, St. Jude’s Children’s Hospital
Few (1 – 3%) of recipients respond to initial asks
More (e.g., 20%) of prior givers donate later times
It may not work for early stage social ventures

43. 3. Telemarketing, calling lists of donors and non-donors
There is resistance from call recipients
It helps with small donations, member renewal
Impractical for some early-stage social ventures
Because it needs equipment and expertise, it is often delivered by fundraising firms
4. Traditional media
Newspapers, magazines, television, radio
Fundraising using broadcasting has been effective for many Christian organizations
Social ventures can buy advertising and other placements in such media

44. Five types of fundraising activity (3)
5. Virtual means
Raising revenue over the web is not a cure-all
Social entrepreneurs should be careful
Donors are still adapting to e-giving
solicitations are treated as spam
No guarantees of Web site traffic
Nonprofit have been slow to adapt technologies

45. Video

46. Donor Snap

48. Using Raisers Edge on a day to day basis…

49. FYI – Making Letters

50. Do a sample mail merge on the fly

51. First make the spreadsheet

52. Queries for Mailings

53. What types of Queries might you run?

57. Raising funding is connected to being able to demonstrate effectiveness

58. Utilizing results includes for publicity and fund raising for non profits:

59. 4. Put on the Numbers

60. Left off

61. Financial Data

62. Nonprofit Technology Network: The State of Nonprofit Data
Video:
Nonprofit Technology Network: The State of Nonprofit Data
November 2012

63. Nonprofit Technology Network: The State of Nonprofit Data
Video:
Nonprofit Technology Network: The State of Nonprofit Data
November 2012

64. Cost Concepts Variable Costs Semi-Variable Step Costs Fixed Costs Cost
Output

65. Source: Bretschneider
Matching Game!
Fixed Costs (do not vary with output):
Top administrators and resources they use.
Financial, legal and other services provided organization.
Variable costs (vary directly with output):
Consumables: materials , supplies, gas used in transportation
Printing/postage/communication
Part time personnel providing service directly
Legal, financial and other services tied directly to output
Equipment (and O&M) used directly in service provision
Semi-variable costs (fixed cost + variable cost per unit):
Phones, utility rates.
Step costs (vary in lump with output):
FT personnel
Facilities/utilities/equipment (and O&M) tied to personnel
Cost
Output
Source: Bretschneider

66. Variable Costs Semi-Variable Step Costs Fixed Costs
Cost Concepts
Variable Costs
Cost
Output
Semi-Variable
Step Costs
Fixed Costs
Key question: how does each change as the cost unit (or unit of activity your agency performs – visits miles, packages, clients) changes

67. Fixed costs do not change as units of activity (kids) change.
Cost Concepts
Cost
Fixed costs do not change as units of activity (kids) change.
Output
Fixed Costs

68. Administrator salary/month
A-1, C25 is _____
Administrator salary/month
Sheet A-1,cell C 27 is the proportion of the monthly salary we are responsible for (remember we are only one of the 4 childcare sites see assumption 5 in parameters)

69. variable costs do change as units of activity (kids) change.
Cost Concepts
Variable Costs
Cost
variable costs do change as units of activity (kids) change.
Output
Variable costs are to fixed costs as electric bills are to monthly rent charges.
Variable Revenues

70. (it is “Food costs/day/child”)
Sheet A-1 is a quick clue that it is a parameter. then look for cell C 20 (in sheet a-1)
(it is “Food costs/day/child”)
B6 is the number of children in the daycare (see previous slide)
A-1, another parameter, C20 is “Work days/month”

71. Cost Concepts Semi-variable
Secretary paid by hours of work
required, but may require standard
benefits package such as health benefits.
Output
Semi-variable
Semi-variable costs do change as units of activity (kids) change but they start off with a fixed cost.

73. Not needed here but would be like… =flat cost + (# clients*($5.00))

74. Cost Concepts Step Costs
Output
change only when units of activity (kids) reach steps (i.e. by law need one staff member for every 5 kids)

75. B7 is the number of employees Sheet A-1,cell C 20 is “Work days/month”
A-1, C 21 is Hours/day/employee (i.e. 8 hours a day)
A-1, C 24 is Hourly wage--daycare worker (i.e. $6.50/hr)

76. Share literacy letter as an exemplary solicitation letter – example of where a liberal arts edu can help!

77. Estimating Personnel Costs
How do I assess the value of volunteers?
 Summary: The estimated dollar value of volunteer time is $19.51 per hour for 2007.

78. Cost Concepts
Variable Costs
Cost
Output

79. Phone and utilities included in Rental
Cost Concepts
Cost
Output
Semi-variable
Phone and utilities included in Rental

80. Cost Concepts
Cost
Output
Step Costs

81. Budgeting for your education!

82. Nonprofit Technology Network: The State of Nonprofit Data
November 2012

83. Nonprofit Technology Network: The State of Nonprofit Data
November 2012

84. Activity: p 96 First Place Fund for Youth
Use the CLASS project planning tool to walk through the above 4 steps as a group for “First Place Fund for Youth”

86. Novel Approaches to Raise Money

87. Dan Pallota – 1st 10 minutes
To accompany Brooks Ch 8 Entrepreneurial Fundraising and Marketing

88. For Discussion: Dan Pallotta: The way we think about charity is dead wrong

89. Inspirational Stories from Students For Final Project

90. Soc Club Events on Video

91. Local grad to pedal cross country for area's homeless

92. Room for Growth

93. Father and daughter continue mission for special needs playground near Phoenix

94. First list all of your assumptions in a sheet/tab called parameters

95. Crucial for Final Project
This exercise will help you complete the S portion of your final project
For your final project DO NOT just tweak your Imagination Library budget- it will likely lead to many mistakes.
Instead start from scratch and build a new smaller budget for your program just like we will practice today – Use the last 2 tabs of your Project Planning Tool in Excel

96. Daycare Budget than explore the full flexible spreadsheet
- Use digital handout parameter sheet, run scenarios as a class

97. The Scenario: Use this to complete the Parameters

98. Break Even Analysis

99. Source: U.S. Office of Personnel Management
Return on Investment
Source: U.S. Office of Personnel Management

101. Deciding How To Spend Limited Resources
Wasserman 1994:7

102. Cost Benefit Analysis (NB= Net Benefit)

103. Cost Benefit Analysis (NB= Net Benefit)

105. Sample:
“Documenting the cost-effectiveness of nutrition education programs is important to justify and determine expenditures and ensure continued funding. “

106. http://californiaagriculture. ucanr. edu/landingpage. cfm. article=ca