1. BUDGETING Nancy Woolsey HFHI Accounting Help 1-800-Habitat X7959 accountinghelp@habitat.org

2. TRUISM Some things are hard to predict, especially the future. Some things are hard to predict, especially the future. attributed to Yogi Berra

3. WHY BUDGET? ► Financial Road Map

5. WHY BUDGET? ► Financial Road Map ► Spend on Purpose ► What Does the Bible Say?

6. Luke 14:28 “Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it?” “Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it?”

7. FOCUS ► Add God to your Budgeting  Pray about priorities, goals, and processes. ► Budgets are moral issue  What does how you spend your money say about your commitment to your mission?

8. BIG PICTURE: 30,000 feet

9. Budget Stages ► Creation  Look at strategic plan ► # of Houses ► Staff changes and / or additions ► ReStore ► Other Expenses ► Capital and Inventory

10. ► Burn Rate  Cash Needs per Month  Quick and Dirty

11. DETAILS Ground Level Sweat the Small Stuff

12. DETAILS, DETAILS ► House Costs  Big numbers ► Staff  Usually next biggest number  Remember the cost to employ  Factor in Capital

13. ROUND AND ROUND ► Initially  Dream Big  No Ideas are Bad  Treat People Respectfully

14. AND MORE DETAILS ► Historical Spending / Monthly  Adjust for Changes  Monthly / Quarterly Skew ► Use the Chart of Accounts  Budget Like You Spend

15. VISION VS REAL WORLD ► Manage the Conflict ► Include Both Sides ► Compromise ► Take Risks

16. ROUND AND ROUND WE GO

17. START EARLY ► Four to five month process ► Involve everyone who has a stake in the outcome

18. ROUND AND ROUND ► Back to Reality  Explore options for income  Explore options for cost savings  Explore options for cultivating volunteers and unpaid staff vs. new staff

19. STILL GOING ROUND AND ROUND ► Important to talk to each other  Staff  Volunteer Committees  Board ► Top Down – Strategic Plan ► Bottom Up – Functional Plan

20. TIME TO MOVE FORWARD ► Top and Bottom Come Together ► Responsibility and Accountability

21. REMEMBER ► God is our senior partner ► Bible Says  All things are possible with God ► Bible Doesn’t Say  All things are easy

22. MORE BUDGET STAGES ► Approval Phase  Staff and Volunteers  Finance Committee  Board of Directors

23. It’s done for another year!!!! But not for long Time to implement these plans

24. IT’S TIME MATCH DREAM WITH REALITY

25. MORE BUDGET STAGES ► Working Phase  Comparison to Actual  Adjustments if needed  Repeat Comparison and Planning  Goal is to eliminate financial surprises

26. Budget Compared to Actual ► Need good timely data ► Format  Monthly, Quarter to Date, Year to Date  Variances in $, %, or Both  Too Much Data vs Too Little Data  Looking for Balance  Dollars with Names must be Identified

27. Budget Question of the Day Can the budget be adjusted after if is approved?

28. ANSWER It Depends  First, on the BOD budget philosophy  Second, is the change something you didn’t have the information to predict  Third, is the change material

29. WHY ► How is all this information and reporting used? ► Is it worth the time and effort to create all these reports? ► How do I determine what information is a red flag and what is not?

30. ACTIONABLE DATA  Used to show leaks and ways to plug them  Used to make financial decisions  Used to indicate a change in direction  Used to improve the Stewardship of donated dollars and grant funds

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