Cover image for Budgeting for not-for-profit organizations
Title:
Budgeting for not-for-profit organizations
Author:
Maddox, David C.
Personal Author:
Publication Information:
New York : Wiley, [1999]

©1999
Physical Description:
xvi, 269 pages : illustrations ; 26 cm.
Language:
English
ISBN:
9780471253976
Format :
Book

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HG4027.65 .M33 1999 Adult Non-Fiction Non-Fiction Area
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Summary

Summary

A well-functioning budget process is more than a set of procedures--it provides a focus for the organization and management to analyze key financial and strategic issues. This invaluable reference addresses the fundamentals of managerial incentives, resource allocation, and practical ways in which these incentives can be managed to serve the strategic goals of the organization by taking an in-depth look at the principles of budgeting for not-for-profit organizations--higher education, charities and foundations, religious organizations, and hospitals and healthcare organizations.


Table of Contents

Part I Introductionp. 1
Chapter 1 Introductionp. 3
1.1 Introductionp. 3
1.2 Purpose of This Bookp. 4
1.3 Who Should Read This Bookp. 4
1.4 Structure of This Bookp. 5
1.5 Case Studiesp. 6
(a) Organization 1: The University of Okobojip. 6
(b) Organization 2: Victim Assistance Associationp. 6
(c) Organization 3: Community Arts Councilp. 8
(d) Organization 4: Presbyterian Churchp. 9
1.6 Conclusionp. 9
Chapter 2 General Concepts of Budgetingp. 11
2.1 Introductionp. 11
2.2 Purposes of a Budgetp. 12
(a) Business Strategyp. 12
(b) Resource Allocationp. 13
(c) Incentivesp. 13
(d) Controlp. 14
(e) Communicationp. 14
2.3 Types of Budgetingp. 15
(a) Centralized or Participatory Budgetingp. 15
(b) Incremental or Redistributive Budgetingp. 16
(c) Institutional or Center-Based Budgetsp. 16
(d) Single or Multiyear Periodsp. 17
2.4 Organizational vs. Program Budgetsp. 18
2.5 Leadership, Accountability, and Involvementp. 19
(a) Leadershipp. 19
(b) Accountabilityp. 20
(c) Involvementp. 20
2.6 Transparency and Predictabilityp. 21
(a) Transparencyp. 21
(b) Predictabilityp. 22
2.7 Conclusionp. 23
Part II The Budget Processp. 25
Chapter 3 Budget Cyclep. 27
3.1 Introductionp. 27
3.2 Budget Developmentp. 28
(a) Planning Step One: Committee Budget Planningp. 28
(b) Planning Step Two: Staff Budget Planningp. 34
(c) Reviewing and Approving the Final Budgetp. 39
(d) Loading Budgets into the Accounting Systemp. 43
(e) Conclusionp. 43
3.3 Budget Monitoring, Tracking, and Adjustmentsp. 44
(a) Monitoring Results and Activityp. 44
(b) Frequency and Timing of Reviewsp. 46
(c) Year-End Projectionsp. 48
(d) Budget Adjustments and Management Responsesp. 48
3.4 Analysis of Final Resultsp. 51
(a) Introductionp. 51
(b) Reporting Resultsp. 52
(c) Reporting Variancesp. 53
(d) Final Analysisp. 56
3.5 Conclusionp. 58
Chapter 4 Components of a Budgetp. 59
4.1 Introductionp. 59
(a) Operating Activityp. 60
(b) Capital Activityp. 60
(c) Cash Flowp. 60
4.2 Operating Budgetp. 60
4.3 Capital Budgetp. 66
4.4 Cash Budgetp. 69
4.5 Conclusionp. 70
Chapter 5 Operating Budgetp. 71
5.1 Introductionp. 71
5.2 Budgeting Revenuep. 72
(a) Large Itemsp. 73
(b) Revenue from Sales of Services or Goodsp. 74
(c) Discrete Itemsp. 76
(d) Revenue Poolsp. 77
(e) Rates of Returnp. 77
(f) Items Driven by Other Itemsp. 78
5.3 Budgeting Expensesp. 79
(a) Cost Driversp. 79
(b) Types of Expensesp. 82
(c) Incremental Budgetingp. 96
(d) Allocating Expensesp. 97
(e) Program Budgetsp. 103
5.4 Conclusionp. 105
Chapter 6 Capital Budgetsp. 107
6.1 Introductionp. 107
6.2 Project Planp. 108
6.3 Evaluating Capital Projectsp. 111
6.4 Organizational Capital Spending Planp. 113
6.5 Conclusionp. 119
Chapter 7 Cash Budgetp. 121
7.1 Introductionp. 121
7.2 Statement of Cash Flowsp. 122
7.3 Budgeting Cash Flowp. 123
7.4 Conclusionp. 125
Part III Managing an Organization's Financesp. 129
Chapter 8 Long-Range Financial Plansp. 131
8.1 Introductionp. 131
8.2 Basic Principlesp. 131
8.3 Case Studyp. 134
8.4 Conclusionp. 143
Chapter 9 Monitoring Budget Resultsp. 145
9.1 Introductionp. 145
9.2 Developing the Institutional Assessmentp. 145
9.3 Monitoring Capital and Cashp. 150
9.4 Assessing Departments, Programs, or Unitsp. 150
9.5 Status Meetingsp. 151
9.6 Conclusionp. 152
Chapter 10 Monitoring Budget Resultsp. 153
10.1 Introductionp. 153
10.2 Basic Functionsp. 153
(a) Timeline and Schedulingp. 154
(b) Prepare Datap. 154
(c) Analysis and Modelingp. 156
(d) Systems and Toolsp. 157
(e) Make Decisionsp. 157
(f) Document Decisions and Prepare Reportsp. 157
(g) Update the Accounting Systemp. 158
(h) Monitor Resultsp. 158
(i) Control Spendingp. 159
10.3 Rolesp. 159
(a) Approving Bodyp. 159
(b) Decision-Making Groupsp. 159
(c) Central Staff or Officep. 160
(d) Budget Managersp. 160
(e) Departmental Staffp. 160
10.4 Gamesmanship in the Budget Processp. 160
(a) Games Played by Budget Managersp. 161
(b) Games Played by Central Budget Staff and Leadershipp. 162
10.5 Conclusionp. 164
Chapter 11 Financial Analysisp. 165
11.1 Introductionp. 165
11.2 Comparisons, Reconciliations, and Detailp. 166
11.3 Judgment and Interpretationp. 170
11.4 Conclusionp. 171
Chapter 12 Controlling Costsp. 173
12.1 Introductionp. 173
12.2 Traditional Models of Budget Controlp. 174
(a) Problems with Traditional Budget Controlsp. 175
(b) Higher Level Traditional Controlsp. 176
12.3 Alternative Approaches to Controlp. 177
(a) Staff and Management Accountabilityp. 178
(b) Budget Incentivesp. 180
12.4 Conclusionp. 182
Chapter 13 Deficits and Surplusesp. 183
13.1 Introductionp. 183
13.2 Defining Deficits and Surplusesp. 183
13.3 Responses to Surpluses or Deficitsp. 185
13.4 Deficit Budgetsp. 187
(a) Reasons for Approving a Deficit Budgetp. 187
(b) Paying for the Deficitp. 188
(c) Dangers of Deficit Budgetingp. 189
13.5 Conclusionp. 191
Chapter 14 Budget Cutsp. 193
14.1 Introductionp. 193
14.2 Reasons for Budget Cutsp. 194
14.3 Determining the Size of Cutsp. 195
14.4 Types of Budget Cutting Approachesp. 198
(a) Across-the-Board Cutsp. 198
(b) Targeted Cutsp. 200
(c) Process or Technology-Driven Cutsp. 201
(d) Cost Cutting and Budget Cuttingp. 201
14.5 Making Decisions on Budget Cuttingp. 202
14.6 Communicating Budget Cutsp. 204
14.7 Conclusionp. 207
Chapter 15 Planning and Managing Human Resourcesp. 209
15.1 Introductionp. 209
15.2 Human Resources Planningp. 210
15.3 Compensation Strategyp. 211
(a) Labor Marketsp. 212
(b) Equity Within the Crganizationp. 213
(c) Ability to Payp. 213
15.4 Individual Salariesp. 215
15.5 Measuring and Rewarding Performancep. 217
15.6 Conclusionp. 219
Part IV Trends in Budgetingp. 221
Chapter 16 Reallocation Systems (Zero-Based Budgeting and Activity-Based Budgeting)p. 223
16.1 Introductionp. 223
16.2 Zero-Based Budgetingp. 224
16.3 Activity-Based Budgetingp. 227
16.4 Conclusionp. 231
Chapter 17 Responsibility Center Management and Budgetingp. 233
17.1 Introductionp. 233
17.2 Designating Responsibility Centersp. 233
17.3 Defining Responsibility Center Financesp. 235
17.4 Performance Against Targetp. 237
17.5 Control and Management Considerationsp. 238
(a) Supporting RCBp. 238
(b) Requirements for RCBp. 239
17.6 Conclusionp. 241
Part V Toolsp. 243
Chapter 18 Documents and Statementsp. 245
18.1 Introductionp. 245
18.2 Budget Preparationp. 245
18.3 Monitoringp. 246
18.4 Evaluationp. 248
18.5 Conclusionp. 251
Chapter 19 Automationp. 253
19.1 Introductionp. 253
19.2 Modeling and Guideline Developmentp. 253
19.3 Proposal Development and Processingp. 254
19.4 Financial Analysisp. 255
19.5 Conclusionp. 256
Glossaryp. 257
Bibliographyp. 263
Indexp. 265