The Budget-Building Book for Nonprofits E-Book

Murray Dropkin

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: The Jossey-Bass Nonprofit Guidebook Series
• Sprache: Englisch

Seitenzahl: 234

Veröffentlichungsjahr: 2011

Beschreibung

This best-selling nuts-and-bolts workbook, now in its second edition, has become the gold standard for nonprofit managers and boards who must work through the budget cycle. The book offers practical tools and guidance for completing each step of the budgeting process. Designed to be comprehensive and easy to use, The Budget-Building Book for Nonprofits provides everything budgeters and nonfinancial managers need to prepare, approve, and implement their own budgets. Includes new chapters on Zero-Based and Capital Budgeting as well as an accompanying website with spreadsheets, worksheets and a new budget-building software, the CMS Nonprofit Budget Builder, designed to help you implement the concepts in the book. The software includes an expandable standard chart of accounts (COA) and will aid in building, organizing, tracking and planning budgets.

Leseprobe

Table of Contents

Praise

Title Page

Copyright Page

Table of Exhibits

Dedication

Preface

Acknowledgments

Acknowledgments to the Second Edition

The Authors

Introduction

Part One - Understanding Budgeting Basics

Chapter 1 - Why Budgets and Budgeting Are Important to Nonprofits

A. The Importance of Budgets and Budgeting

B. The Basic Characteristics of Budgeting

Chapter 2 - Understanding Basic Types of Nonprofit Budgets

A. Organization-Wide Operating Budgets

B. Operating Budgets for Individual Programs, Units, or Activities

C. Capital Budgets

D. Cash Flow Budgets (Cash Flow Forecasts)

E. Opportunity Budgets

F. Zero-Based Budgets

Chapter 3 - Key Board and Staff Roles and Responsibilities in Nonprofit Budgeting

A. The Board’s Role

B. Executive Director’s, President’s, or CEO’s Role

C. Chief Financial Officer’s Role

D. Program, Unit, or Activity Manager’s Role

E. Department Manager’s Role

F. Other Possible Participants

Chapter 4 - Establishing Budget Guidelines, Priorities, and Goals

A. Establishing Guidelines

B. Identifying Priorities

C. Setting Organization-Wide Goals

D. Setting Individual Program and Unit Goals

Chapter 5 - How Different Sources and Types of Income Can Affect Budgeting

A. Unrestricted Funds

B. Contract or Grant Agreement Funds

C. Restricted Contributions

D. Income from Trade or Business Activities

E. Asset-Generated Income

F. Cash and Noncash Contributions, Including Pledges

G. Funds Requiring a Cash or In-Kind Match

Chapter 6 - Strategies for Developing Organization-Wide Operating Budgets

A. Strategy 1: Set Annual Organization Outcome Goals from the Top Down

B. Strategy 2: Set Annual Income and Expense Targets from the Top Down

C. Strategy 3: Request Draft Budgets That Show Priorities from Program or Unit Heads

D. Strategy 4: Use Zero-Based Budgeting

Part Two - Step-by-Step Budgeting Guidelines

Chapter 7 - Start with the Budget-Building Checklist

Chapter 8 - Designing Your Budgeting Policies and Procedures

A. Basic Budgeting Policies and Procedures

B. Basic Income Projection Policies and Procedures

C. Basic Expense Projection Policies and Procedures

D. Basic Cash Flow Projection Policies and Procedures

E. Policies Establishing the Fiscal Year

F. Other Needed Policies and Procedures

G. Checklist for Information to Include in Written Policies

H. Final Review and Integration

Chapter 9 - Creating Your Budgeting Calendar

A. Five Steps for Developing the Budgeting Calendar

B. Instructions for Creating an Annual Budgeting Calendar

Chapter 10 - Orienting Program and Department Managers and Staff to Budgeting

A. Budget Team Meeting

B. Practical Considerations When Planning Budget Team Meetings

Chapter 11 - Contents of the Annual Budget Preparation Package

Chapter 12 - Developing Organization-Wide Operating Budgets

A. Five Steps to Prepare for the Annual Budgeting Process

B. Five Steps to Create Annual Budgets

Chapter 13 - Developing Operating Budgets for Individual Programs, Units, or Activities

A. Planning for Program or Unit Budget Development

B. Basic Steps in Creating a Program or Unit Budget

C. Setting Two Kinds of Program or Unit Goals

D. Preparing a Program or Unit Workplan

E. Identifying the People and Things Needed to Implement a Workplan

F. Identifying Personnel Costs

G. Identifying “Other Than Personnel” Cost Categories

H. Identifying Specific Line-Item Costs

I. Providing Budget Justification or Cost Documentation

J. Matching and In-Kind Contributions

K. Distributing Copies of Final Program or Unit Budgets

Chapter 14 - Major Components of Operating Budgets

A. Projected Income

B. Projected Expense Categories and Subcategories

C. Projected Expenses by Line Item

D. Budget Narrative or Justification

Chapter 15 - Estimating Income and Expenses

A. Estimating Future Income

B. Estimating Expenses

C. Summarizing Proposed Changes in Draft Budgets

D. Budget Highlights

Chapter 16 - Allocating Administrative, Overhead, and Shared Costs

A. Allocation Methods

B. Worksheet for Allocating Costs

Chapter 17 - Revising Draft Operating Budgets

A. Updating Fiscal Projections

B. Trimming Draft Budgets

C. When More and Deeper Cuts Are Needed

D. Avoiding Potential Budget-Cutting Problems

Chapter 18 - Zero-Based Budgeting

A. Overview

B. Five Basic Questions

C. Information Provided by the Program

D. Potential Demand

E. Break-Even Analysis

F. Decision Time

G. Getting Started with ZBB

Chapter 19 - Capital Budgeting

A. Strategic Fit

B. Viability

C. Return on Investment

D. Financing

E. Two Types of Capital Projects

F. Cash Flow Budgeting or Forecasting

G. Final Considerations

Chapter 20 - Presenting Your Annual Budget Proposal to the Board

A. Letter of Transmittal

B. Total, Organization-Wide Budget Summary

C. Program, Unit, or Activity Budget Summaries

D. Detailed, Organization-Wide, Line-Item Expense Budget

E. Individual Program or Unit Budgets

F. Other Useful Information

Chapter 21 - Board Review, Revision, and Approval of the Final Budget

Chapter 22 - Cash Flow Reporting, Forecasting, and Management

A. Fundamentals of Cash Flow Forecasting

B. Cash-Basis Accounting for Cash Inflows

C. Cash-Basis Accounting for Cash Outflows

D. Cash Flow Forecasting Based on the Operating Budget

E. Reviewing and Approving the Cash Flow Forecast

F. Short-Term Cash Flow Forecasting

G. Periodically Reviewing the Cash Flow Forecast

H. Corrective Actions for Forecast Cash Shortages

I. Cash Flow Reporting, Monitoring, and Analysis

Chapter 23 - Monitoring and Modifying Approved Budgets

A. Regular, Timely Financial Reporting and Monitoring

B. Planning and Taking Corrective Action

C. Modifying Budgets

D. Cash Flow Projections and Planning

Chapter 24 - Conclusion

Part Three - Practical Budgeting Resources

Resource A - Master Worksheet for Creating a Program or Unit Workplan

Resource B - Worksheets with Sample Budget Formats

Resource C - Examples of Financial Reports for Analyzing and Monitoring Income ...

Resource D - Tools for Analyzing Financial Reports and Planning Corrective Action

Resource E - Example of a Detailed Organization-Wide Expense Budget

Resource F - Additional Useful Checklists and Examples

Resource G - Tools on the Accompanying CD

Exhibits and Blank Worksheets

Application Software

How to Use the CD

Table of Exhibits

EXHIBIT 9.1

EXHIBIT 13.1

EXHIBIT 13.2

EXHIBIT 14.1

EXHIBIT 15.1

EXHIBIT 15.2

EXHIBIT 18.1

EXHIBIT 19.1

EXHIBIT 19.2

EXHIBIT 20.1

EXHIBIT 20.2

EXHIBIT 22.1

EXHIBIT 22.2

EXHIBIT 23.1

EXHIBIT C.1

EXHIBIT C.2

EXHIBIT C.3

EXHIBIT C.4

EXHIBIT C.5

EXHIBIT C.6

EXHIBIT D.1

EXHIBIT D.2

EXHIBIT E.1

EXHIBIT F.1

Praise forThe Budget-Building Book for Nonprofits

First Edition

“This is a book every nonprofit needs.”

—Peter F. Drucker

“Provides clarity, strategy, and utility to the financial and asset management of social-sector organizations.”

—Frances Hesselbein

“This book is clear, insightful, and required reading for all who are responsible for the success of not-for-profits. If you work for or run a not-for-profit agency, you should read this book.”

—Peter Block, author of Flawless Consulting and The Empowered Manager

“The Budget-Building Book for Nonprofits is a definitive and practical guide to the art of budgeting. It is well-written and reliable, as well as easily understandable.”

—Ronald J. Werthman, vice president, finance/treasurer, and CFO, Johns Hopkins Health System, The Johns Hopkins Hospital

Second Edition

“This book is the gold standard for providing executives and managers with information essential to making the best decisions for their organization, and it will give them the confidence in their fiscal systems that they need in the competitive world of nonprofit management.”

—Don Sykes, former director, Office of Community Services for the Clinton Administration and President, Community Development Solutions

“This book is an indispensable step-by-step guide for managers of not-for-profits. Written in clear language easily understood by the layman, it contains guidance on both proper procedures and the real-world challenges of getting the organization to adopt them. The worksheets and sample forms alone are worth the price.”

—Elizabeth Rosen, retired chief financial and systems officer, The Morgan Library and Museum

“Everything you ever wanted to know about budgeting and didn’t know who to ask is contained in this second edition of The Budget Building Book for Nonprofits . It’s practical, sophisticated, and contains many useful forms and examples. Whether you are an experienced nonprofit executive, board member, or finance person or new to the field, you will want to add this budget book to your library. It’s a tremendous resource for everyone who works or volunteers to support the nonprofit sector.”

—Carol Wolff, executive director, Area Health Education Center, Camden, New Jersey

“The second edition of The Budget-Building Book for Nonprofits presents a primer for managers with limited financial expertise and resources in nonprofit settings. In my 20 years of consulting to behavioral health systems, these kinds of adjustments are often the critical difference in the financial health of an organization. This book should be mandatory reading for the non-financial administrator of any nonprofit organization.”

—Harvey E. Hoffman, president, Healthcare America, Inc.

“Too often the process of building a budget in nonprofit organizations fails to receive the attention and focus appropriate to its importance. When a properly constructed budget is used effectively it represents far more than a simple spending plan. Rather, it becomes a guiding statement of values and priorities and a road map for how the organization plans to achieve its goals for the budgeting period. That view—carefully honed by these highly skilled authors after many years of experience on the front lines—is well captured in this second edition of The Budget-Building Book for Nonprofits and forms the foundation for the practical methods so clearly presented. Nonprofit executives and their boards of trustees alike will be well-served by this edition and well-advised to make it their own.”

—Alan G. Kaufman, former director, New Jersey Division of Mental Health Services, and president, Argus Solutions for Behavioral Health

“The budget-building book is a clear, well-written guide for nonprofit managers, whether experienced or new to the job, and demonstrates the importance of the budgeting process. Using plain language and real-life examples, the authors provide a comprehensive and systematic approach to developing and monitoring the budget. It should be required reading for all nonprofit managers and boards.”

—Irwin Nesoff, associate professor and director of the New Jersey Institute for Nonprofit and Social Work Management, Social Work Department, Kean University

Spotlight Review (of the First Edition) on Amazon

Budget Management, April 23, 2006

By Alex Nalicat “nalicat” (CA, USA)

When I purchased this book I thought it might be outdated for my organization. I was wrong; this is an excellent budget workbook. The authors did an excellent job in bringing to light the complex and problematic issues of budgeting for nonprofit organizations, and they take you step by step through the process. The Budget-Building Book for Nonprofits covers everything from starting a budget to the financial reporting of the budget. This book also provides numerous samples of budgets. If you’re a budget manager or director, this book should give a fresh new way to look at the budgeting process.

Copyright © 2007 by John Wiley & Sons, Inc. All rights reserved.

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Library of Congress Cataloging-in-Publication Data

Dropkin, Murray.

p. cm.

ISBN 978-0-7879-9603-1 (paper/cd)

1. Nonprofit organizations—Finance. 2. Budget in business. I. Halpin, James. II. La Touche, Bill. III. Title.

HG4027.65.D76 2007

658.15′4—dc22

2007021302

PB Printing