1. SOCW 6371: Community & Admin Practice Class 9: Financial Management: Budgeting, Budget justification, Fund Raising, Reporting UTA School of Social Work 6371: 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

2. SOCW 6371: Community & Admin Practice Review 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§ 2

3. Budgets and budget justification SOCW 6371: Community & Admin Practice 3

4. Views 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 4

5. SOCW 6371: Community & Admin Practice Budget type: line item Definition Cost by item Advantages of Line Item Easy to understand Disadvantages Focuses attention on input & throughput vs. outcomes § 5

6. SOCW 6371: Community & Admin Practice Line Item Example Coley & Scheinberg, pg. 78, & 89 KKM, pg. 182 & p. 240 6

7. SOCW 6371: Community & Admin Practice Budget 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 § 7

8. SOCW 6371: Community & Admin Practice Program 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 8

9. SOCW 6371: Community & Admin Practice Budget type: performance/functional Def = cost out outcome objectives Advantages Focuses on cost for outcomes Compares costs to achieve each objectives Disadvantages Requires cost per unit of service Requires calculating indirect costs Most people think in terms of programs and not objectives § 9

10. SOCW 6371: Community & Admin Practice Performance/functional budget Example Focuses on functions such as training and evaluation Coley & Scheinberg, p. 79, table 8.2 KKM, p 201 10

11. SOCW 6371: Community & Admin Practice Budget 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 11

12. SOCW 6371: Community & Admin Practice Budgeting 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 § 12

13. SOCW 6371: Community & Admin Practice Financial reporting Statements (periodic summary) –Income, expenditures, balance –Changes in fund balance Annual reports IRS 990 www.give.org www.guidestar.orgwww.give.org www.guidestar.org www.charitynavigator.org Audits (using approved procedures) § 13

14. Financial Management and Fund Raising SOCW 6371: Community & Admin Practice 14

15. SOCW 6371: Community & Admin Practice Overview of Financial Management Financial management –Non-profit accounting –Budgeting –Financial reporting Funding raising –Often human service $s have strings attached § 15

16. SOCW 6371: Community & Admin Practice Financial Management Assumptions 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) § 16

17. SOCW 6371: Community & Admin Practice Basic 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 § 17

18. SOCW 6371: Community & Admin Practice Non-profit Accounting-- bookkeeping 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 § 18

19. SOCW 6371: Community & Admin Practice Non-profit Accounting -- bookkeeping 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 § 19

20. SOCW 6371: Community & Admin Practice Securing Funds Fundraising Sources of Funds 20

21. SOCW 6371: Community & Admin Practice Fundraising 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 § 21

22. SOCW 6371: Community & Admin Practice 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 § 22

23. SOCW 6371: Community & Admin Practice 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/http://www.dsvp.org/ 23

24. SOCW 6371: Community & Admin Practice Reducing Expenditures Zero based budgeting Diversity funding sources Brody (text for SOCW 6314), pg. 243 Has good list of 50 ways to reduce expenditures 24

25. SOCW 6371: Community & Admin Practice Implications 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) § 25

26. SOCW 6371: Community & Admin Practice Conclusions 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 § 26

27. SOCW 6371: Community & Admin Practice Questions and Answers 27