Developing Your Initial Budget Ch. 3

I know I haven’t updated my blog in forever seeing as statistics took over my life last fall, and again this fall. I’m working on my ideas as much as I can this summer, as I’m taking summer quarter off. Chapter 3: Developing Your Initial Budget

                A budget is a list of estimated income, in grants, contributions, office furniture, and start-up expenses. Estimated expenses include what to expect on day-to-day expenses like computers, office furniture, and start-up spending.  Budgets require a strategy, and Microsoft Excel helps with creating that strategy because it is a worksheet with a series of rows as well as columns that require the user to enter formulas and figures.

                The budget tells the truth about how much money the nonprofit organization has. To begin financial plans, the founder must know how much individual programs will cost the organization. How much of the budget is dedicated to these programs? Budgets are not made by guesswork but by fact. Separate estimates help plan ahead for planned program areas. Organizations you could get grants from require knowing how expenses divide between programs and administration, The column you set aside that you have to label “Administration” is what tells the reader where the income and expenses is not directly tied to a specific program go.

                There is the danger of grantors turning down your funding requests due to spending too much money on administration. Papa Johns is a fund raising idea that my elementary school used. Every nonprofit survives off of donations, and funders need those donations to go towards specific programs. I’d like to find both talkative partners and silent partners in this Munchausen by Proxy or Factitious disorder imposed on another nonprofit, to be my advisors. Speaking of which, I could use advisors with a background in medicine. Your budget set up in a spreadsheet ought to keep track of expenses like office space and help. You have to keep program funds separate from administration funds.

                Restricted income is a category in the non-profit industry and a fact about the nonprofit industry is that grantors who have the money you need, can feel that you are spending too much on nonprofit administration, and not spending it on worthwhile programs. When you’ve worked out a budget, and you ask for specific donations for a specific program, the donations must be isolated to that specific program. Income in a non-profit setting comes from membership fees, individual contributions, grants, and dedicated events. Like my martial arts fundraising event idea, my dry club is another idea, where purchase of more than one type of nonalcoholic beverages, can help bring in money to the non-profit I want to run.

                The Tax Cuts and Jobs Act of 2018 or TCJA could have large-scale effects on charitable giving. This act will make Americans less likely to do tax deductible donations to nonprofits (Pakroo 2019). Unrestricted income needs to go to the non-profit administration branch while actual restrictive income goes towards what the grantor wants. You need a great reason to believe that all initial budget income is unrestricted until proven or told otherwise. Budgets need to reflect strategic plans, and keep track of programs created, because the business plan needs to have programs provided outlined. I need to research the competition out there also.

                                Capital assets are in the budget and are defined or highlighted, as items that have a useful life of more than one year. These items include purchases such as computers, vehicles, and furnishings for the office. NAMI had a couch, and a coffee table right by the resource binders. Capital expenses have their costs deducted when a certain number of years have gone. In the book on page 55, estimates for annual capital expenses involve camping equipment, computer equipment, and telephones, as well as office furniture. This company is called Wild Horizons, the capital expense subtotal is what should be added in the spreadsheet.

                Start-up costs are all about including expenses for things you’ll need to buy, things to buy that get your nonprofit up and running. These are things like printing, brochures I will design myself, website creation telephone set up, and not limited to state fees for incorporation. Expenses should not exceed income in your calculations. When you explain the budget in a budget narrative about how you use your money, you need to leave notes about the line items, and donations of goods and services must also be included in the finished budget. Unrestricted income makes up deficits (Pakroo 2019). Estimated expenses has three categories anyway, 1) Day-to-day expenses, 2) capital expenses and 3) start-up expenses. I need to take coursework about nonprofits to learn more.