d
Bagian
Kedua
NONPROFIT
FINANCIAL PLANNING
G usta a f A. Lum iu
•
Mission
Bottom
Line
1.Progress of Mission
2.Meeting needs of communities served
•
Financial Bottom Line
•
Financial
Bottom
Line
1.Meeting budget targets 2.Secure funding
Why
plan?
Long term financial planning gives you a guide for your organization’s fiscal health.
If an organization is fiscally healthy, it can better meet its programmatic goals.
bette eet ts p og a at c goa s
•
Fiscal
Health
Long
Term
Strategic
&
Financial
Planning
Objectives
1. Importance & Objectives of a long term financial plan
2. Common Components of a Business Plan Methodologies & Strategies for creation Methodologies & Strategies for creation of long term business plans
1.
•
Business Plan
•
Business
Plan
1.Road Map to your organization’s future 2.Financial data integrated with
programmatic data 3.Upfront thinking
h l
Importance
of
a
Business
Plan
1.Reduce risk in decision makingf ff
2.Aid in fundraising efforts 3.Aid in allocation of resources
4.Gives your organization a clear financial direction
5.Sets revenue goalsg
•
Components
of
your
Business
Plan
1.Goals, Results & Challenges 2.Market Conditions
•
Goals,
Results
&
Challenges
these goals & results?these goals & results?
•
Market
Conditions
1.Who are you serving?
2.What portion of the general market are you trying to reach?
•
Revenue Projections
•
Revenue
Projections
1.What are your funding sources?
2.Identification of new sources of revenue 3.What resources will you need to
complete your goals?
•
Expense
Projections
1 Wh t t ffi & i f t t
1.What are your staffing & infrastructure needs?
2.What will new programs and objectives cost?
•
Practical
Steps
1.Decide time frame covered (3‐5 years) 2.Identify stakeholders
3.Identify person responsible for creation of the document
4 Create a timeline for completion and 4.Create a timeline for completion and STICK TO IT
Budgeting
Obj tiObjectives
1.Importance of Annual Budgeting
2.Potential Structure(s) of Annual Budgets 3.Methodologies for creating an Annual
•
Budget
‐
Purpose
1 A l l t ll t i d t
1.Annual plan to allocate resources in order to meet program objectives
2.Sets balance between revenue and expense 3.Conforms to long term plans
4.Primarily an internal document
•
Budget
types
B d
t St
t
•
Budget
Structure
1.Should conform to existing systems and objectives
2.Reflect organizational structure 3.Reflect funder sources
•
Main Elements
•
Main
Elements
1.Chart of Accounts
•
Chart of Accounts
Chart
of
Accounts
1.Natural expense structure
2.Reflects Accounting system structure 3.Examples include salaries, fringe benefits, rent, office supplies,
f i l i
professional services
•
Cost
Centers/Program
Areas
1 Budget should be divided according to 1.Budget should be divided according to organizational structure and activities 2.Program activities divided in a way that makes sense for your organization
3.Examples: General & Administrative,
F d i i Ed ti P
•
Revenue
&
Cost
1.Budget should reflect areas of revenue & costs associated with each program activity (if relevant)
•
Sub
‐
Divisions
1.Departmental Budgets 2.Grant Budgets
C
ti
b d
t
•
Creating
your
budget
1.Create a timeline for completion of the budget
2.Choose a structural template
3.Identifyy staff roles & responsibilitiesp
•
Staff
Roles
1.Identify one staff member to coordinate the budget process (finance staff if available) 2.Creation is a group effort – Include Program staff in process
3.Make program directors responsible for specific budget areas
•
Goals
&
Objectives
1 Clearly identify the year’s major goals 1.Clearly identify the year s major goals, objectives and activities
2.Identify continuing activities 3.Any new activities?
4.Any activities eliminated?
•
Identify
y
Major
j
Assumptions
p
1.What overarching assumptions impact the whole organization of multiple
•
Creation Methodologies
Creation
Methodologies
1.Line Item Budgeting 2.Program Budgeting 3.Zero Based Budgeting 4.Grant Budgeting•Line Item Budgeting
Uses previous year’s data with changes based on percentage changes for each expense
P B d ti
•Program Budgeting
Focuses on Program Expenses and Income Income results
•Zero Based Budgeting
All activities are returned to zero each year and justifications given for each item each year • Grant Budgeting
1.Delegation of budget authority to staff increases ownership of program and financial activities
2.Make the internal budget as detailed as possible – write down ALL assumptions
3.Presentation to Board of Directors need not include every detail
4 Have budget approved 1 2 months before 4.Have budget approved 1‐2 months before beginning of fiscal year
•
Integration
g
of
Financial
Planning
g
Objectives:
1.Integration of Financial Plans into Accounting & Financial Systems
2.Methodologies of supporting & fostering budget accountability & reporting
3 T i l l f & fi i l ff
•
Financial Systems Integration
•
Financial
Systems
Integration
1.Accounting System 2.Financial Processes
•
Accounting
System/Software
1.Choose an Accounting System that can integrate all data points needed to track your budget
2.Enter all budgets into the system – This will facilitate reporting.
•
Financial Systems Structure
•
Financial
Systems
Structure
1.Clearly define roles of staff
2.Code all revenues & expenses in a consistent format with your budget
3.Require consistent coding methods
•
Roles of Staff
Roles
of
Staff
1.Executive Management 2.Finance Management 3.Program Staff
•Executive Management
3.Assigns financial responsibility where appropriate 4.Makes final changes/decisions to submitted staff budgets
5 Takes action where/when appropriate 5.Takes action where/when appropriate 6.Reports to Board of Directors
7.Understanding & Awareness of Finance is essential
•
Board
of
Directors
(Finance
Committee/Treasurer)
Committee/Treasurer)
1.Responsible for big picture fiscal health 2.Approves budget
3.Reviews oversight reports including Budget to Actual reports
4 A th i d t t b d t
•
Program
Management
Staff
1.Codes/Authorizes payment of invoices 2.Responsible for oversight in assigned budget categories/cost centers
3.Reviews periodic budget reporting and acts accordingly
acts accordingly
•
Finance
Staff
1.Enforces & implements all financial internal controls
2.Directs program & executive management staff in approved fiscal management procedures
3.Produces reports for staff and board of directors 4.Oversees operation of accounting system including proper coding of costs & revenues
proper coding of costs & revenues
•
Reporting – Why?
•
Reporting
– Why?
1.Forecasting
2.Analysis for changing course 3.Accountability
•
Reporting Structures
Reporting
Structures
1.Budget to Actual Reports 2.Dashboard Reports•
Budget
g
to
Actual
Reports
p
1.Tracks revenues & expenses and correlates the data to budget numbers 2.Provides a detailed picture of
organizational and program health 3 Provided to all staff with budget 3.Provided to all staff with budget
responsibility
•
Dashboard Reports
•
Dashboard
Reports
1.“At a Glance” internal reports
•
Independent Audits
Independent
Audits
1.Assesses fiscal position of the organization
2.Includes “Schedule of Functional Expenses”
•
Tax
Report
p
1.Divides expenses into 3 categories: 2.General & Administrative
3.Fundraising
•
What
to
do
with
these
reports?
p
1.Meet periodically as a group to review reports
2.Use reports as a guide to change organizational goals/behaviors
