BUDGET AND FINANCIAL MANAGEMENT

Replies Prompt: Review 2 classmates’ thread and provide a critique of their Budget and Financial Management (Section 10). Provide feedback based on the readings for this module/week and/or scholarly literature related to academic and strategic nonprofit development resources. Provide a critical analysis of their proposal as well as feedback designed to help them strengthen their proposal. Cite a minimum of 1 scholarly or biblical resource in current AMA format.

First reply:

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Chelsey Hargrave

Money and More Money

COLLAPSE

Section Ten

BUDGET AND FINANCIAL MANAGEMENT

Cash flows

Effective cash flow management is essential1. Cash flow is extremely important as this is the foundation of if your organization will sink or float. We have been blessed enough to already have a couple partnerships put in place that will help fun, the vision of this organization. We also have donations that are set up on our website where clients, donors, and anyone who would like to donate to us can do so. With that beings said, we hope to have at least 5,000 (can always be exceeded) dollars a month in donations.

We also have an apparel line that can be bought as well, that we hope when bring between 10-12,000 dollars a month just in merchandise sells. What is included in that merchandise is hats, t shirts and crew necks or the fall weather that is vastly approaching us. A percentage of our sales (TBD) will go to mental health research as well as funding clients who may not have insurance or live in low- income areas. For a yearly total we are looking between 180-182,000 dollars a year just from donations and selling of merchandise. With our therapy sessions, we will also be bringing revenue in from that aspect of the organization which in turn we will not be able to estimate this amount due to the amount for sessions, is dependent on what type of insurance the client has if they do have insurance. Any other pro bono services were accounted for above.

 

Profit and loss projections

Every non- profit experience loss and if anyone tells you that they didn’t they are not telling you the whole truth. We hope to make a tremendous amount of revenue from our services, merchandise and of course the donations that we receive.

For investments/investors it would be such a blessing to receive a total of 50-70,000 dollars a year from investors. As we continuously grow as a non-profit our wealth and value of the company should grow as well. In accepting donations to fund our operations and programs, they realize they cannot rely on fundraising alone. Deciding to invest and turn to financial professionals for input is the way to go2. With that being said, as we begin to grow our organization through clientele and many other avenues our investments will be sure to grow as well.

The total investment requirement is dependent upon whomever the investor will be. As far as those who will be involved, we are hopeful that the government will be involved as well as any local grant givers that will be in our area. We hope to have big healthcare companies (i.e. Novant Health, Cone Health) who would like to invest in our vision and organization. We hope that they each will provide at minimum $50,000 to the organization. The way our investments will be used will not be on a “because we have it” basis but if we ever fall short of any part of our budget, that is where the investment will be provided within the company. We hope to only be able to use these funds at the end of each calendar year after we have looked over the budget for the year, and everything for that year has been accounted for.

As far as Key Financial Indicators for the non-profit, this will be measured in a fairly simple way. We measure this based on how many gifts have been secure, our donor retention rate and growth, our website page views, and any other indicators that we may measure along the way. Our main goal here is to simply spread knowledge of what we are about in the hopes of improving the lives of those around us who wish to connect with us.

  1. Managing Cash Flow. Propel Nonprofits. https://www.propelnonprofits.org/resources/managing-cash-flow/. Published 2020. Accessed October 8, 2020.
  2. Investment Needs of Nonprofits – ARGI Financial Group. ARGI Financial Group. https://argifinancialgroup.com/investment-needs-nonprofits/. Published 2020. Accessed October 8, 2020.

second reply:

Virginia Brink

Discussion Board

COLLAPSE

Section Ten

BUDGET AND FINANCIAL MANAGEMENT

Fruitful Wellness will take time to continue to develop the budget and its financial management.1 It is important that we are good stewards of the funds we have. It will be a focus of ours to pay close attention to the needs of each department and event. To get started we will seek an overall budget of $432,000. We will accept donations throughout the year, but we will set a goal of $200,000 in donations. We will seek $232,500 in grants from local investors. These investors will be named at a later time as further research is needed to determine this. This budget will be under review at the quarterly budget meeting where the board will make any adjustments and then approve the budget.1 The needed investment to start each year will be 400,000 to ensure employee salaries will be paid and that there is 100,000 to have between all of the departments at the beginning of the year. The remainder of the budget will come throughout the year. It is of course the goal to have a larger income compared to our expenses, but that is why we have the emergency fund in case such a situation occurs. During the quarterly board meetings. The board will get a report from each department on their expenses so far for the year and how that aligns with their budget for the year. Adjustments to the budget will be made accordingly.1 Each department will receive feedback from the board at that time regarding their projections.

In addition to the budget that will outline what each department has to spend for their respective department, there will be a financial worksheet that states the performance indicators and targets.2 This document will service as an overview for how each department is performing financially. The document will be submitted to the board for their review to analyze any discrepancies on the budget. This will allow the board to give a perspective that may indicate areas of improvement to develop the budget and financial state of the department. It is important for each department to stay on budget. Key leaders need to pay close attention if emergency funds are needed. Some performance indicators and targets listed below.

Performance Indicators

1. Annual Profit (Science direct)2

2. Annual Expenses (Science direct)2

Performance Targets

  1. FruitfulWellness will end the year with a profit where all expenses were covered for the year. (Science direct)2

Performance Goals

  1. Each department will end the year under budget or at budget in accordance with the approved 2020 budget.
  2. Each department is using funds wisely and spread throughout the year to enable success.
  3. The emergency funds will not have to be used in 2020.

In Proverbs chapter fifteen verse twenty two it states that those that request assistance in analyzing budgets and such related work will be far more well off than those that go without help.3(p675) This verse relates to this section of the mock proposal because as a non-profit organization it is crucial to use your advisors to assist you in making the best budget that will set the organization up for success.3(p675) In this organization the board will be used to look over the budget quarterly, and will help set the organization up for success to the best of their knowledge and ability. In Genesis chapter two verse eighteen we are reminded to work with a team and it should be a lesson for FruitfulWellness.3(p5) Using resources such as materials and people should be looked on favourably as the bible teaches that working as a team with all your resources it the best option.3(p5)

Department/Events End of Year Cost: 2019 End of Year Cost Goal: 2020
HR 53,000 20,000
Marketing 25,000 25,000
Communication 25,000 20,000
Education 15,000 15,000
Board 5,000 1,000
Annual Retreat 5,000 3,000
Orientation 5,000 3,000
Volunteer Party 500 500
Employee salaries 300,000 300,000
Facility Maintenance 50,000 30,000
Emergency Fund 20,000 15,00

(Budget is subject to adjustments.)

References

  1. Budgeting for Nonprofits. National Council of Nonprofits Web site. https://www.councilofnonprofits.org/tools-resources/budgeting-nonprofits. Accessed October 8, 2020.
  2. Grigoroudis E, Organoudaki E, Zopounidis C. Strategic performance measurement in a healthcare organisation: A multiple criteria approach based on balance scorecard. Omega. 2012;40(1):104-119. https://www-sciencedirect-com.ezproxy.liberty.edu/science/article/pii/S0305048311000612. Published January 2012. Accessed October 8, 2020.
  3. Yansey P and Stafford T. Student Bible. Michigan: Zondervan; 2002. 5, 675.

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