1. S- Sustainability Resources: Budgeting and Cost

2. Agenda 1. Discuss readings- Brooks Chapters 6, 7 and 8 4Brainstorm sources of income and cost 2. Hands On Activity – Work as a team to Fill in Parameters fro Daycare Budget than explore the full flexible spreadsheet - Use digital handout parameter sheet, run scenarios as a class

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. Needs Assessment Cost Logic Model

4. Mobilizing Resources 1. Define the Capabilities Needed 2. Devise a Human Resource Outline to meet each capability need 3. Develop a resource plan 4. Put on the Numbers Brooks Ch 6 p 86

5. Activity: p 96 First Place Fund for Youth

7. What is a budget?

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

9. Crucial for 2013 4 This exercise will help you complete the S portion of your final project 4 For your final project DO NOT just tweak your Imagination Library budget- it will likely lead to many mistakes. 4 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

10. The Scenario: Use this to complete the Parameters

11. Cost Concepts Cost Output Variable Costs Semi-Variable Step Costs Fixed Costs 4 Key question: how does each change as the cost unit (or unit of activity your agency performs – visits miles, packages, clients) changes

12. Cost Concepts Cost Output Fixed Costs 4 Fixed costs do not change as units of activity (kids) change.

13. 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) A-1, C25 is _____ Administrator salary/month

14. Cost Definitions Fixed vs. Variable 4 Fixed Costs (do not vary with output): –Top administrators and resources they use. –Financial, legal and other services provided organization. 4 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 4 Semi-variable costs (fixed cost + variable cost per unit): –Phones, utility rates. 4 Step costs (vary in lump with output): –FT personnel –Facilities/utilities/equipment (and O&M) tied to personnel Source: Bretschneider

15. Cost Concepts Cost Output Variable Costs Variable Revenues 4 Variable costs are to fixed costs as electric bills are to monthly rent charges. 4 variable costs do change as units of activity (kids) change.

16. 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”

17. Cost Concepts Cost Output Semi-variable Secretary paid by hours of work required, but may require standard benefits package such as health benefits. 4 Semi-variable costs do change as units of activity (kids) change but they start off with a fixed cost.

18. http://www.labor.ny.gov/stats/lswage2.asp http://www.labor.state.ny.us/workforceindustrydata/descriptor.asp

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

20. Cost Concepts Cost Output Step Costs 4 change only when units of activity (kids) reach steps (i.e. by law need one staff member for every 5 kids)

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

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

23. Income sources 4 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 4 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 4 Figure 6.2 shows income sources for all nonprofits 4 Figure 6.3 shows social enterprise earned income types

24. Table 6.4 Revenues from membership dues for various nonprofit enterprises, 2003 Enterprise type Percentage of income from dues Labor organizations66.02% Social clubs59.61% Business leagues40.27% Public charities (all 501(c)(3)) 0.90% Source: Steinberg (2006)

25. Table 7.1 Source of donations to American nonprofits, 2005 Living individuals76.5% Foundations11.5% Bequests6.7% Corporations5.3%

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

27. Figure 6.1 The Capabilities – Resource Model

29. Figure 6.3 Types of earned income for social enterprises

30. Table 6.3 The Product Profile Map Source: James & Young (2006) High mission impact Low mission impact Positive profitStarsCash cows Loss-makingSaintsDogs

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

32. Estimating Personnel Costs 4  How do I assess the value of volunteers?  http://www.independentsector.org/programs/r esearch/volunteer_time.html http://www.independentsector.org/programs/r esearch/volunteer_time.html  Summary: The estimated dollar value of volunteer time is $19.51 per hour for 2007.

33. Cost Concepts Cost Output Variable Costs

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

35. Cost Concepts Cost Output Step Costs