Respond to at least one other learner regarding development of the budget for his or her chosen organization.
Your response must be substantive and contribute to the discussion. Compare your analysis to that of your peer and comment on the similarities and differences that you see. If there are aspects that you do not agree with, present an argument to support your position. If you need more information from your peer, be sure to ask questions for clarity.
Student post down below:
To manage money properly, an organization would “need a budget that’s realistic and accurate, so that you can start with a good idea of what you have available to spend, where that money will come from, and what you want to spend it on” (Community Tool Box, n.d.). and the purpose for the budget is to plan for the operating revenues and expenses of the organization.
Making the annual budget plan is at first the staff’s duty, but board members (habitually those on the “finance committee” and/or “executive committee”) regularly review the proposed budget plan, and the full board usually approves the budget at a full board meeting. (National Council of Nonprofits, n.d.)
SCO Family of Services follows the following key accepted) principles proposed by Hamilton Foley (2010), which are:
- Practice income-based budgeting (Budget for income first base income targets on realistic expectations; and ensure that the expenses are lower than the dependable income total. This [process] requires cooperation among all departments in setting organizational and programmatic priorities, timing)
- Analyze and understand your revenue concentrations (the organization should have a different source of income)
- Confirm your budget’s relationship to your mission and long-range/strategic goals. (“Review mission and strategic plan” with the note “Ensure that all strategic initiatives with budget impact are included in the budget process.”
- Don’t forget infrastructure. (Include information technology upgrades and maintenance, evaluation, and staff development costs in the budget)
- Budget for capital in addition to operations (An organizational budget should take into account the organization’s annual operating income and expenses, as well as ensuring resources for long-lived and non-operating needs – this is the capital budget.)
- Provide narrative notes to explain budget assumptions to the board. (Board and finance committee members will appreciate explanations to help them understand the underlying thinking behind the numbers in the budget.)
- Pay attention to the presentation (Your budget could be brilliant, well-researched, and well-documented, but if it is unreadable, it will undermine your work. Budgets that are easy to read and understand are well-formatted)
SCO’s operating budget contains income from the different funding sources and expenses, among which staffing and other costs for the operation. The total of their revenues is equaled to their costs.