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  1. 1. ABCs of Budgeting Basic Budgeting
  2. 2. What is a Budget <ul><li>An itemized summary of expenditures </li></ul><ul><li>Total sum of money allocated </li></ul><ul><li>A collection of funds with limits </li></ul><ul><li>A statement of the financial position of an organization </li></ul><ul><li>A plan for spending money </li></ul><ul><li>Futuristic in terms of projecting </li></ul>
  3. 3. Characteristics of a budget <ul><li>A well thought out plan </li></ul><ul><li>Detailed </li></ul><ul><li>Contain estimated expenditures </li></ul><ul><li>Include revenue </li></ul><ul><li>Include appropriate subtotals and totals </li></ul><ul><li>Concern a defined length of time </li></ul><ul><li>Explanation of activities </li></ul>
  4. 4. Working definition for non-profits <ul><li>A budget is the plan from a financial view point. It contains detailed itemized estimates of all expenditures and contributions from all sources of revenue </li></ul><ul><li>AND </li></ul><ul><li>Also includes the amount and distribution of funds needed to perform the project activities over their allotted time spans. </li></ul>
  5. 5. Why a budget a “Good Thing” <ul><li>Controlled Spending </li></ul><ul><li>Spend Cautiously </li></ul><ul><li>Honor the trust placed by donors </li></ul><ul><li>Critical Part of program planning, grant writing and evaluation </li></ul><ul><li>Sustainability and ensuring financial stability </li></ul>
  6. 6. Having a Plan <ul><li>Balanced budget </li></ul><ul><li>No one right model </li></ul><ul><li>Healthy budget shows multiple funding sources </li></ul><ul><li>Cash Reserves </li></ul><ul><li>Show all in-kind contributions </li></ul><ul><li>Start up costs </li></ul>
  7. 7. Example of a budget <ul><li>Two Key Sections </li></ul><ul><li>Income </li></ul><ul><li>Expenses </li></ul>
  8. 8. Project vs Organizational Budget <ul><li>Project budget that supports one project or a specific program within your organization. </li></ul><ul><li>Organizational Budget provides information on more than one project or program – with each program detailing its own specific needs. </li></ul>
  9. 9. Budget (Active Document) <ul><li>Spread sheets of Budgets include </li></ul><ul><ul><li>Annual budget </li></ul></ul><ul><ul><li>Year to date income and expenses </li></ul></ul><ul><ul><li>Current month’s budget (1/12 of the annual budget) </li></ul></ul><ul><ul><li>Current month’s income and expenses </li></ul></ul>
  10. 10. Cash Flow <ul><li>Subdocument of your budget that estimates not joust how much money you will receive and spend over the course of a year, but when you will receive it and spend it. </li></ul>
  11. 11. Financial Statement <ul><li>It is about history </li></ul><ul><li>These are prepared at least once a year (end of fiscal year) </li></ul><ul><li>Monthly and Quarterly versions are often created in non-profits </li></ul><ul><li>Preparing and interpreting financial statements require an Accountant’s knowledge and skill level </li></ul>
  12. 12. Managing Financial Systems <ul><li>Security </li></ul><ul><li>Back up (save a copy) all financial documents </li></ul><ul><li>Require two signatures on checks over a certain amount </li></ul><ul><li>Keep all supporting documents/receipts </li></ul><ul><li>Keep an itemized list of any equipment or furniture (and value) </li></ul>
  13. 13. Best Practices in Managing Funds <ul><li>Budget is driven by the mission </li></ul><ul><li>Keep good records </li></ul><ul><li>Always use funds as they are budgeted </li></ul><ul><li>Follow budget as closely as possible </li></ul><ul><li>Learn to diversify funds </li></ul><ul><li>Don’t use a signature stamp to endorse checks </li></ul><ul><li>If you can’t spend the money for what it is intended, give it back. </li></ul>