Post on 26-Mar-2015
Financial Planning Support for Parish Planning
Larry W. Boone, Ph.D.Management Department
The Peter J. Tobin College of BusinessSt. John’s University
Email: boonel@stjohns.edu
Agenda:
1. PARISH PLANNING PROCESS (Overview)
Purpose & future direction Mission, Vision, Goals, Strategies
2. FINANCIAL PLANNING
Support function for parish planning
3. EXAMPLE
3 strategies/initiatives
Excel-based scenarios
OVERVIEW of the Planning Process
MISSION Who we are - broad purpose
VISION What we want to be - next 3-5 years
GOALS What we want to achieve - annual
STRATEGIES How we will accomplish goals
RESOURCE ALLOCATION LT financial plans and budgets
PERFORMANCE MEASUREMENT Scorecard
PARISH PLANNING
Establish and communicate direction and priorities for future – how we will be “better”
Motivate parishioners
Invite parishioner participation
Establish rationale for decisions (such as new initiatives and budgets)
PLANNING PARTICIPANTS
Pastor (or Pastoral Leader)
Pastoral Council or a Planning Team empowered by the pastor
Pastoral Staff
Lay Ministry Leaders
Parish Community Leaders
Finance Committee • may participate throughout the process or
at the end to evaluate financial needs and plans
ROLE OF FINANCE COMMITTEE
Encourage visioning
“Big picture” thinking; meeting parishioner needs and desires (current and future)
Encourage planning team’s creativity
do not inhibit early stage “dreaming”
Support, empower planning team’s work
Facilitate implementation of strategies
where visioning meets practicality
Provide alternatives for funding initiatives
provide “what if” funding options
ROLE OF FINANCE COMMITTEE
Example: do not say “We cannot afford this new initiative.”
Alternatively, explain what it will take to finance the initiative: special fund-raising effort
1.5% increase in weekly giving
$25,000 savings from among current program expenditures
etc.
PLANNING – ALLOCATE RESOURCES
Judge the most effective uses of limited resources people money facilities equipment time
Use the planning process to prioritize allocations
Match your existing resources to prioritized Goals & Strategies
Decide which is more feasible achieving what you can
with existing resources or
obtaining more resources
THE FINANCIAL PLAN
Document that specifies • funds needed by an organization for a period of time
• the timing of inflows and outflows
• the most appropriate sources and uses of funds.
Financial plan helps answer three questions:1. What funds will be required during the planning
period (how much)?
2. How will necessary funds be obtained (sources)?
3. When will more funds be needed (timing)?
EXAMPLE: 3 INTIATIVES IDENTIFIED
1. develop a website to promote interactive communication and online prayer groups
2. create welcoming and hospitality ministries
3. establish a sister parish in a developing country
(in this priority order)
Our parish will:
FINANCIAL PLANNING STEPS:
1. Using Excel, create a 5-year high-level parish statement of revenue and expenditures (for consumption by non-financial members of parish planning team)
2. Establish future assumptions for all revenue and expenditure categories
3. Develop feasible funding and timing scenarios for new strategies
4. Discuss scenarios with the planning team
ASSUMPTIONS - Key Role in Financial Planning
List all assumptions to expose the foundation of your planning calculations and derivations.
Change assumptions to “test” effects of alternative strategies.
Assumption examples:1. Collection revenue +2% per year (average of last 5 years).
2. Donations and bequests -5% per year due to expected relocation of parishioners.
3. Salaries +2% per year.
4. Fringe benefits +8% per year due to increased health care premiums.
5. Web site strategy - Capital expenditure of $5,000 in 2014 for new computer/server; monthly maintenance expenses of $500 for labor and site fees.
6. Welcoming/Hospitality ministries strategy – starting in 2015 $400/month.
7. Sister Parish strategy – starting in 2016 $10,000 per year.
FINANCIAL PLAN STRUCTURE- basic Excel model
REVENUE 2014 2015 2016 2017 2018
Loans (potential)Special fund-raising effortsRegular Collections $620,000 +2%/yearParish Programs 50,000 +3%/yearAuxiliary Revenue 40,500 +1%/yearDonations, Bequests 15,000 -5%/yearTOTAL REVENUE ____ ____ ____ ____ ____
EXPENDITURESSalaries 245,000 +2%/yearFringe Benefits 99,000 +8%/yearAuxiliary Expenditures 105,500 +3%/yearSchool Subsidy 125,000 unchangedRectory & Household 8,000 +3%/year Building, Utilities, Maintenance 115,000 +5%/yearWeb Site strategy 11,000 6,000/yearWelcoming/Hospitality ministries strategy ------- 4,800/yearSister Parish strategy ------- ------- 10,000 TOTAL EXPENDITURES ____ ____ ____ ____ ____EXCESS of REVENUES OVER EXPENDITURES ____ ____ ____ ____ ____
Excel – ASSUMPTIONS SHEET
AssumptionsRegular Collections $620,000
Increase in regular collections 2%
Parish Programs $50,000
Increase in parish programs 3%
Auxiliary Revenue $40,500
Increase in auxiliary revenue 1%
Donations, Bequests $15,000
Decrease in donations, Bequests 5%
Salaries $245,000
Increase in salaries 2%
Fringe Benefits $99,000
Increae in fringe benefits 8%
Auxiliary Expenditures $105,500
Increae in auxiliary expenditures 3%
School Subsidy $125,000
Rectory & Household $8,000
Increase in rectory & household 3%
Building, Utilities, Maintenance $115,000
Increase in building, utility, maintenance 5%
Website Strategy 2014 $11,000
Website Strategy 2015 $6,000
Welcoming & Hospitality Ministries Strategy $4,800
Sister Parish Strategy $10,000
Financial Planning Example – Collections +2.0%/year2014 2015 2016 2017 2018
REVENUE
Loans (potential)
Special fund-raising efforts
Regular Collections 620,000 632,400 645,048 657,949 671,108
Parish Programs 50,000 51,500 53,045 54,636 56,275
Auxiliary Revenue 40,500 40,905 41,314 41,727 42,144
Donations, Bequests 15,000 14,250 13,538 12,861 12,218
TOTAL REVENUE $725,500 $739,055 $752,945 $767,173 $781,745
EXPENDITURES
Salaries 245,000 249,900 254,898 259,996 265,196
Fringe Benefits 99,000 106,920 115,474 124,711 134,688
Auxiliary Expenditures 105,500 108,665 111,925 115,283 118,741
School Subsidy 125,000 125,000 125,000 125,000 125,000
Rectory & Household 8,000 8,240 8,487 8,742 9,004
Building, Utilities, Maintenance 115,000 120,750 126,788 133,127 139,783
Website Strategy 11,000 6,000 6,000 6,000 6,000
Welcoming & Hospitality Ministries Strategy 4,800 4,800 4,800 4,800
Sister Parish Strategy 10,000 10,000 10,000
TOTAL EXPENDITURES $708,500 $730,275 $763,371 $787,659 $813,213
EXCESS of REVENUES OVER EXPENDITURES $17,000 $8,780 -$10,427 -$20,486 -$31,467
Financial Planning Example – Collections +3.5%/year2014 2015 2016 2017 2018
REVENUE
Loans (potential)
Special fund-raising efforts
Regular Collections 620,000 641,700 664,160 687,405 711,464
Parish Programs 50,000 51,500 53,045 54,636 56,275
Auxiliary Revenue 40,500 40,905 41,314 41,727 42,144
Donations, Bequests 15,000 14,250 13,538 12,861 12,218
TOTAL REVENUE $725,500 $748,355 $772,056 $796,629 $822,102
EXPENDITURES
Salaries 245,000 249,900 254,898 259,996 265,196
Fringe Benefits 99,000 106,920 115,474 124,711 134,688Auxiliary Expenditures 105,500 108,665 111,925 115,283 118,741
School Subsidy 125,000 125,000 125,000 125,000 125,000
Rectory & Household 8,000 8,240 8,487 8,742 9,004
Building, Utilities, Maintenance 115,000 120,750 126,788 133,127 139,783
Website Strategy 11,000 6,000 6,000 6,000 6,000
Welcoming & Hospitality Ministries Strategy 4,800 4,800 4,800 4,800
Sister Parish Strategy 10,000 10,000 10,000
TOTAL EXPENDITURES $708,500 $730,275 $763,371 $787,659 $813,213
EXCESS of REVENUES OVER EXPENDITURES $17,000 $18,080 $8,685 $8,970 $8,889