How to Build a How to Build a Better Budget Better Budget Panel - - PowerPoint PPT Presentation

How to Build a How to Build a Better Budget Better Budget

Panel Panel

Billy Burnett Executive Vice President and CFO Joni and Friends Vonna Laue Partner CapinCrouse, LLP Hugh Burns Vice President of Operations Denver Rescue Mission Mark Jones VP and Senior Banking Consultant Evangelical Christian Credit Union

Who We Are Who We Are

• Advocate for the Disabled
• Global Impact – U.S. and Multiple Continents
• 35 Years in Service to the Disability Community
• $26 Million Budget
• 62% Cash, 38% Non-Cash
• 9 Regional Centers, 5 Chapters, 100+ Associates
• 1,000+ Volunteers
• 5,000+ Church Affiliations, Including:

– 2 Major Denominational Partnerships – 2 Major Programs – Academic and Tactical Institute CID

Key Stages Key Stages

• 1. Strategic Assessment and Alignment
• 2. Financial Information and Forecasting (BBB)
• 3. Operational and Tactical Definition
• 4. Board of Directors Review and Approval
• 5. Implementation – Monitoring and Measuring

Key Stages (1) Key Stages (1)

• Board of Directors Approved Strategic Plan

10, 5, and 1 Years

• Top 10 Organizational Priorities
• Key Actions that Further Expand Our Mission
• Provides Tactical Engine for Our Annual Plan

Strategic Assessment and Alignment

Key Stages (2) Key Stages (2)

• Multi-Year Historical Data Analysis
• Multivariate Correlation and Regression

Modeling

• Modular Reviews of Segmented Income Streams
• Multi-Departmental Input (Consensus Gathering)
• Optimization of Predictive Model (Overall

Environment)

• Set Value of Operating Income for Entire

Organization

Financial Information and Forecasting (BBB)

Key Stages (3) Key Stages (3)

• Department Heads Define and Set Goals
• Integrative Model Involves All Departments
• Define 2nd Tier Supplemental Projects
• Senior Management Review and Approve in

Real Time

• Webinar Style for Field Units

Operational and Tactical Definition

Key Stages (4) Key Stages (4)

• Presentation of Operations Plan and Budget

to Board of Directors

• Discussion and Approval of Main and

Supplemental Budgets

• Prayer and Implementation

Board of Directors Review and Approval

Key Stages (5) Key Stages (5)

• Key Measurements Home and Field

– Includes Income and Expense Goals

• Monthly Review with Field
• Quarterly Review with Home Departments
• Quarterly Report to Board of Directors
• Biannual Presentation to Board of Directors

Monitoring and Measuring

Questions? Questions?

Background Background

• Total Revenue of $24.2 Million
• Cash Revenue of $15.6 Million
• GIK Revenue of $8.6 Million
• Over 60 Cost Centers
• 160 Staff
• 100K of Volunteer Hours Annually
• 5 Facilities
• 12 Major Programs

Budgeting Principles Budgeting Principles

• Bottom Up Model
• One Person in Charge of Each Cost Center
• Zero-Based Budget
• Accountability
• Significant Time Investment
• Most Important Planning Process of the Year
• Highly Structured Process
• Multiple Levels of Review

Balanced Budget Formula Balanced Budget Formula

Operating Revenue (Operating Expenses) Non-Operating Revenue (Non-Operating Expenses) (3% Contingency Allowance) (Sustaining Existing Capital Expenditures) (Expansion Capital Expenditures) = Zero

Budgeting Tools Budgeting Tools

• SharePoint
• Excel
• Template for Each Cost Center
• Tabs = Assumption Logs (Each Account)
• Prior Year Budgets
• Current Year Financial Statements

Accountability Accountability

• Monthly Budget-to-Actual Reports by

Cost Center

• Commentary Required on Variances > 10%
• Monthly Review by VPs
• Monthly Consolidated Budget-to-Actual Report

to Finance Committee and Board of Directors

• Financial Overview at Each Meeting of the

Board of Directors (9 per Year)

Questions and Resources Questions and Resources

• Financial Empowerment: More Money for More

Mission, Peter C. Brinckerhoff

• Zone of Insolvency: How Nonprofits Avoid

Hidden Liabilities and Build Financial Strength, Ron Mattocks

Vonna Laue Vonna Laue

Partner, CapinCrouse LLP Partner, CapinCrouse LLP

CapinCrouse Background CapinCrouse Background

• Markets served
• Number of clients served
• Specialties to nonprofit community
• How CapinCrouse gets exposed to or involved

in ministry budgets

Planning Planning

• Relates to overall objectives of the organization
• Should be done before budgeting
• What is the driving goal?
• List the five main goals and objectives of your

ministry in descending priority order

Keys to Proper Planning Keys to Proper Planning

• Identify needs
• Stating goals (overall intent and direction)
• Stating objectives
• Being specific
• Establishing priorities (What if you can’t

do it all?)

• Being able to evaluate progress
• Consider short-term and long-term

Master Plan Master Plan

• Five-year, continuous plan
• Identify:

– Different needs for the future from now – What goals, objectives, and programs might be needed – Anticipated sources of income to meet the needs

• Should simplify the budget process

Keys Reminders Keys Reminders

• Multiple budgets don’t take a considerable

amount more time, but they can be very useful in reacting to surpluses and shortfalls.

• Accountability is crucial for success.
• Just because you were under budget doesn’t

mean you were successful!

Questions Questions