Budgeting Challenges – Rely on the Mission

April 6, 2011 at 11:26 AM | Posted in Class, Community, Community Partners, Development, donations, Donors, ESOL, Finances, Staff, Volunteers | Leave a comment
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Watching the Federal Government struggling with budgeting challenges isn’t easy, but quite honestly it isn’t easy in any organization.  This is the time of year when the Literacy Council of Northern Virginia is developing the fiscal year 2011- 2012 budget (July 1, 2011 – June 30, 2012), and we are making similar very difficult decisions.  In a small non-profit educational organization, such as LCNV salaries are the largest part of the budget.  Without the teachers, program support professionals, and administrative support, the organization would not function.  Non-profit salaries are considerably lower than public and private sector salaries for similar positions, and yet we need to be competitive to attract qualified candidates who live in this Northern Virginia region.  So, to keep expenses down, LCNV uses the support of AmeriCorps members, functions with a number of part-time positions, and supplements with volunteer office support as much as possible.   Program books and materials are a necessary expense and LCNV will not sacrifice the number of books, the quality of the materials, or the variety necessary to meet the need s of the range of adult learners in our programs.  This, too, is a large portion of our operating budget.  Then there are the operational costs like telephones and technology, building maintenance, printing, supplies and equipment, mailing . . . items that need to be paid to successfully run an educational service, but seem to add up to too much too quickly.  Where can we cut the budget?

Like the Federal Government, we also look at the revenue side.  Where does the money come from? In the case of the LCNV, it is primarily fund-raising income.   All of our grants, including state and local government funds are annual competitive grants, meaning every year we start from scratch raising necessary operational funds.  There are no guarantees in fund-raising and often private foundations or corporate giving programs change their funding priorities, or in a difficult economy, cut back their grant awards.  We do charge fees for volunteer training and fees for our adult learners (though scholarships are available for those in need), but added together those fees account for less than 5% of the operating budget.  Creating the income side of the budget requires strategic guessing, taking risks, and having faith in the kindness of others.

How do we balance the growing needs of the organization, fairly compensate the small staff, make sure our educational programs are cutting edge and responsive to the needs of adults in our community, while depending upon revenue that’s based on strategic guessing?  In some ways it’s a lot like the Federal Government:  there is considerable discussion and compromise.   For the most part, though, at LCNV we rely on the strength of the mission.  We believe there is no better cause than giving the gift of reading to an adult.  With the basic skills of reading, writing, speaking and understanding English, adults have the tools to launch a whole new future.   The LCNV budgeting process is to manage the expenses as close to the edge as is fairly reasonable, and talk about the importance of the mission over and over and over until the money follows.

-Patti Donnelly, Executive Director

 

You’re so kind!

October 6, 2010 at 4:01 PM | Posted in Announcements, Development, Donations, Finances | Leave a comment
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A friendly-reminder about in-kind donations as we head into our new school year!  “In-kind giving” refers to contributions of goods and services that are of value to a nonprofit organization, but are not cash. Examples of in-kind gifts are books, classroom supplies, computer equipment and gift cards.

Oftentimes when I send out fundraising emails, I receive responses from volunteer tutors and teachers that they already donate by buying supplies and books for LCNV.  Our volunteers should definitely be counting these as donations! In-kind donations can be writtenoff on their taxes, and it is also good for LCNV to keep track of them in our audited financial statements.  Staff, if you know of an in-kind gift that a volunteer has made, please give them the in-kind donation form and ask them to complete it, make a copy for themselves and turn it into Stacy for tracking in the database.  Stacy will also share this information with Randi.

If you have any questions, please don’t hesitate to ask me or Stacy!  Thanks!

Suzie Eaton, Senior Director of Development

Staying Afloat

June 22, 2010 at 2:40 PM | Posted in Finances | Leave a comment

In these difficult economic times, finances are a major concern to everybody in the non-profit sector. Recently, I had the good fortune of attending a conference at Booz Allen Hamilton entitled, “Money Matters: Understanding Your Role as a Financial Leader.” There were four panelists who spoke, each with his or her specific area of professional expertise:

Jennifer Pryce, Portfolio Manager of the Calvert Foundation U.S. Investments.  Jennifer spoke to us about the importance of understanding and knowing how to read our financial statements.  She emphasized the importance of keeping our assets liquid; in other words, as close to cash as possible.  She also talked about loans that are extended to non-profits at very low interest rates.

Rick Moyers, Director of Programs of the Meyer Foundation.  Rick spoke to us about what he looks for in a successful grant application.  Surprisingly, you don’t always have to perform within budget guidelines, but there should be a valid reason for the areas in red.

Marti Worshtil, Executive Director of Prince George’s Child Resource Center.  Marti told us the story of how she had to cut her organization’s administrative budget when faced with the economic downturn.  Fortunately, her staff is still with her.  The last category she wanted to cut was programs.

Walter Smith, Executive Director of DC Appleseed Center.  The economic downturn also negatively affected Walter’s organization.  However, instead of cutting expenses, Walter chose to beef up the fundraising effort.  Luckily, his Board members were able to help him with this endeavor.  They staged several fundraising events and enlisted the aid of their friends and colleagues.

It was very interesting to hear the different approaches to keeping organizations running effectively within dire budgetary constraints.  One thing that everybody agreed on:  cutting programs is the last resort.

For the final portion of the conference, we broke up into groups to discuss several stressful scenarios and identify possible solutions.  All of the situations seemed insurmountable, dependent upon financial management leadership.  The resounding theme of the fictional scenarios:  there was never enough money or space; there was always more need for financial oversight and control.  It was a wonderful and thought-provoking exercise to brainstorm with Executive Directors and financial leaders from other non-profit organizations.  We eventually did come up with solutions, but in this ever-changing world, the question I left with was how many were actually viable and for how long?

As we go forward into fiscal year 2011, I hope that our programs can grow beyond the present infrastructure that supports them.  What I witnessed at our recent graduation ceremony is that LCNV can and does change the lives of our immigrant community.

~Randi Littman, Director of Operations

Inventory Notice!

June 2, 2010 at 11:59 AM | Posted in Announcements, Finances | Leave a comment

LCNV will be doing an inventory of our books on Wednesday, June 30, 2010.  We will be unable to sell, exchange, or process refunds for books on that date.  We apologize for any inconvenience this may cause.

~Randi Littman, Director of Operations

LCNV Budget Woes

May 25, 2010 at 2:29 PM | Posted in Finances | Leave a comment

The budget process – oh, how much fun it is!  I was fortunate enough to be a part of the fiscal planning process for FY 6/30/2011.  The budgeting process isn’t easy.  It’s done by trial and error and much revisiting of revenue and expense accounts.

All the department heads were asked to approximate spending for the next fiscal year.  The input from each department was aggregated to form the total for the expense side of the budget.  Expenses are then compared to revenue.

The revenue side of the budget is comprised of income from fundraising, student fees, government grants, and special event sponsorship.  These broad categories are further broken down into more specific categories.  For example fundraising income is comprised of gifts from individuals, corporations, foundations, churches, and civic groups.  Ideally, the revenue side of the budget will adequately cover our projected expenses.  Sadly, that is never the case.

Round 2 of the budgeting process:  how to trim expenses so that we don’t spend more than we receive.  Not as easy as it sounds.  The next step was to analyze expenses and separate the “needs” from the “wants”.  Since LCNV is interested in improving and expanding our program to better serve our existing students and to serve an ever-increasing number of students, almost every expense falls into the “needs” category.

Finally, after much agonizing, adjusting, tweaking, and sighing, we managed to balance the budget.  We had to postpone spending on some projects, purchasing some much needed computers, improving our library, sending staff to some workshops for training.  But, that’s life in the non-profit world.

Somehow, we never lose hope that next year will be better, and we’ll be able to accomplish all of our goals.  Wouldn’t that be great?

~Randi Littman, Director of Operations

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