Budgeting Strategies for Non Profits
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Budgeting in Tough Times
Jay SciutoPartner
Tate & Tryon, CPAsy ,
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Budgeting in Tough Timesg g g
The purpose of this presentation is to discuss ff i b d i d id i effective budgeting steps and provide cost cutting
tips which could be helpful in tough economic itimes.
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Good Budget CharacteristicsGood Budget Characteristics
A budget is a planning tool that should be:
* R li i d d bl i* Realistic- sound and reasonable assumptions
* Flexible- adapt if there are significant changes p g g
* Consistent- in line with assumptions and goals
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Successful Budget StepsSuccessful Budget Steps
Determine timeline:Determine timeline:
• Establish dates for milestones
• Earlier the better
• Allow time for analysis/edits
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Successful Budget StepsSuccessful Budget Steps
• Establish responsibilitiesEstablish responsibilities
. Determine who has the overall responsibility
. Identify each program’s requirements
d’ l d l. Ensure Board’s involvement and approval
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Successful Budget StepsSuccessful Budget Steps
• Establish goals and assumptionsEstablish goals and assumptions
. Identify key program/organizational goals
. Establish financial expectations
d d b d. Communicate and document budgetassumptions
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Successful Budget StepsSuccessful Budget Steps
• Analyze current and past budgetsAnalyze current and past budgets
. Determine areas of risk
. Identify items for possible cuts
f h k f h . Learn from the mistakes of the past
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Successful Budget StepsSuccessful Budget Steps
• Key points in budgeting revenue• Key points in budgeting revenue
. Justification for projections (increases/decreases)
. Ensure that individual revenue line items are inline with overall assumptionsline with overall assumptions
. Identify areas of risk
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Successful Budget StepsSuccessful Budget Steps
• Key points in budgeting expenseKey points in budgeting expense
. Justification for expenses on a line by line basis
. Ensure that individual items are in line with overallassumptionsassumptions
. Identify items that could be further reduced iffuture cut backs are required
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Successful Budget Stepsg p
• Budget ImplementationBudget Implementation
. Organizational wide buy-in
. Monitor throughout year and focus on risksidentifiedidentified
. Modify budget as necessary
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Expense Reduction TipsExpense Reduction Tips
The remainder of the presentation is to The remainder of the presentation is to provide cost cutting tips that you can i l d i h j di i h implement today without jeopardizing the integrity of the programs you provide to your members and the general public
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Expense Reduction TipsExpense Reduction Tips
• Comparison to /dialogue with Comparison to /dialogue with similar organizations
. Employee benefits
Vendors used. Vendors used
. Expense ratios
. Expectation for future periods
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Expense Reduction TipsExpense Reduction Tips
• Looking within the OrganizationLooking within the Organization
. Outsourcing options
. Salary analysis
h l l f h k . Ensure authorization levels for check requests.
. Preventive measures for fraud
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Expense Reduction TipsExpense Reduction Tips
L ki t id th O i ti• Looking outside the Organization
. Fee reduction options with current vendorsp
. Require multiple bids on all new products/ servicesabove certain thresholdabove certain threshold
. Bring certain functions in-house
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Expense Reduction TipsExpense Reduction Tips
Offi • Office space
. Telecommuting option reduces office spaceg p p
. Sub-lease opportunities for unused space
. During downturn in real estate, lock in space atreduced rates