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August 25, 2015

YWCA USA Financial Leadership & Management Program The Art & Science of Budgeting & Dashboard Driving. for every woman. Join us on Twitter: @SpectrumSteve. August 25, 2015. WELCOME. Financial Leadership Model. Today’s Conversation. AGENDA. Budgeting in Context Roles Timeline

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August 25, 2015

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  1. YWCA USA Financial Leadership & Management Program The Art & Science of Budgeting & Dashboard Driving for every woman Join us on Twitter: @SpectrumSteve August 25, 2015

  2. WELCOME

  3. Financial Leadership Model

  4. Today’s Conversation AGENDA • Budgeting in Context • Roles • Timeline • Bridging the Gap • Presenting the budget • Dashboard Driving • Styles and Metrics

  5. Which is a better budget? It depends! Monitoring Planning

  6. Putting Budgeting into Context Planning Monitoring Monitor progress throughout the time period Show differences between plans or goals and actual use Take corrective action as problems arise. • Define organizational goals • Tie into strategic plan • Online resource needs and uses to accomplish goals

  7. Budgeting:A Holistic Process • What is the problem that needs solving? • What will you do about it? • Theory of Change, Mission Impact. • What will that cost you? • Who would and why should someone pay? • Marketing, Fundraising

  8. Who is Involved? Everyone

  9. Roles in Budgeting

  10. But, Who is In-Charge? • Typically the Director of Finance or Bookkeeper will be the budget keeper, in-charge of the spreadsheet. If you contract out services, the Executive Director may keep the spreadsheet. • The ED as the FINANCIAL LEADER is responsible for keeping the time table and momentum.

  11. When do we budget? • Budgeting takes time – make sure you allot enough of it.

  12. Sample Budget CalendarJune 30th Year End

  13. 6 Stages of Budgeting

  14. 6 Stages of Budgeting

  15. Setting Context and Goals • Review past performance • Financial metrics: • What is our reserve? • What do we want our reserve to be? • Program metrics • How many people did you serve? • How are our impact measures?

  16. Setting Context and Goals • Review past performance • Review strategic or business plan • What are your goals? • Where should you be on goals? • Were any assumptions incorrect?

  17. Setting Context and Goals • Review past performance • Review strategic or business plan • Review your market • Are constituent needs changing? • Are funders or revenue streams changing? • Is there new competition?

  18. Setting Context and Goals

  19. 2016 Budget Goals

  20. A note on structure Your chart of accounts: • Does it easily show how your programs are performing? • Do your expense categories make sense?

  21. 6 Stages of Budgeting

  22. Estimate Costs What are the costs for accomplishing our goals?

  23. Estimate Costs Personnel Costs • Create a staffing plan. • Not based on who is currently working there and how they are funded, but rather how many people you need to cover your goals.

  24. Know your expenses • Not budgeting in the correct category can lead to a high overhead rate. • Understand the relationship between growing one category and the other.

  25. Estimate Costs:Questions to Ask • Think about what is new and what is the core of your program? • Can we realistically just keep adding services or tasks? • Who will pay for new services? • Are there new technologies or theories that will help us deliver on our mission?

  26. 6 stages of budgeting

  27. Forecast Income Contributed Support Earned Revenue

  28. Forecast Income Sources of Support • Individuals • Foundations / grants • Corporations • Special events • Planned giving

  29. Forecast Income • What is happening with the economy? • Are we cultivating donors? • What is the timing for foundations? • Are we building up restricted grants? • Can we deliver on restricted grants?

  30. Forecast Income • Understand the true costs of delivering programs including shared and administrative costs. • Are we competitive?

  31. Forecast Income Contributed Support Earned Revenue

  32. 6 stages of budgeting

  33. How much do you have in reserves? Do you need to build a reserve? Can you use a reserve? Bridging the Gap

  34. Go back to the priorities that were set in Step 1. What is a high priority for the organization to accomplish this year? Bridging the Gap

  35. Cash flow projections: Does the cash flow work for this budget? Do you need to move income or expenses around? Bridging the Gap

  36. Bridging the GapQuestions to Ask • Are we putting our money where our mission is? • Does the budget support financial health? • Are we making effective, efficient use of funds?

  37. 6 stages of budgeting

  38. Approving the Budget • Presentation is important. • A key opportunity to focus the board on how to read and understand the financial statements. • Drive the conversation with functional statements.

  39. Numbers to Look at

  40. 6 Stages of Budgeting

  41. Monitoring Your Budget:Key Questions • Is our budget performance on target? • Have you budgeted by month? • Projections? • If not, what are our corrective action plans?

  42. Budget to actual report Balance Sheet?

  43. How do I read these things?

  44. As a Dashboard

  45. A dashboard’s purpose

  46. Agreement ahead of time on what matters

  47. Agreement ahead of time on what matters • Agreement ahead of time on targets

  48. Agreement ahead of time on what matters • Agreement ahead of time on targets • Agreement ahead of time on when action is needed

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