Jordan Jones

LPO 3350

Oct. 3, 2011

MPR Budgeting Assignment

My main lenses for projecting the budget for 2003 was remembering that an effective budget is best utilized when it is establishing criteria that would signal the Board and key staff leadership if a change is necessary or if a course of action should be modified or refined. With that in mind, I needed to specifically key in on those areas that were outside of the stated 5% “acceptable” range of variance.

Notes on line-item choices for 2003 Projected/Expected Budget:

I raised the Public Support line item by 5% because this was the only source of revenue that was within the five percent range of acceptability established by the organization. In addition, MPR is opening a direct deposit and online donation tool that it believes will improve its public support through greater ease-of-access.

I lowered Government Support because reports have been circulating that the grant dissemination (downward) trends of 2002 will continue with Congress tightening up the Federal budget following the Bush tax cuts and a more intensified focus on national defense. MPR also plans to eliminate a government relations staff position in favor of contract grant writers and a newly created fundraising position which it forecasts will have a 5-10% negative effect on grant revenue.

I increased Earned Revenue because of the staff hires in the fundraising department of the organization as well as increased desire within leadership to be less bound to public contributions.

The Board was extremely concerned about the extreme disparity between revenue expenses for the 2002 fiscal year. Therefore, they desired a budget that reflected a leaner operations budget, one more adept to a decrease in revenue. With that in mind, I kept operations expenses at the 2002 level because there is no intention within the core of leadership to pursue any major additions to the current lineup and activities.

I lowered administrative expenses 5%, despite the increase in fundraising positions, because of the organization’s consolidation of staff assistants.

I raised fundraising expenses 60% because the shift in philosophy toward fundraising that centers around not only generating revenue, but also generating key awareness of the organization’s mission and strategy.

I kept minority interest in joint venture at generally the same levels because there is no vision change in this area. However, I did put capital additions at half of the budgeted 2002 level because MPR plans to continue on with half of the building and advancement projects they halted due to revenue loss and cash flow issues last fiscal year.

Some other key pieces of information that would have been invaluable in my development of the 2003 budget include:

Individual project or department projections and/or goals

  • This is important because I need to hear from those engaged in the front lines of the organization. Are they seeing something I am not? Do they vision for a project that we need to be embrace?

Cash Flow- short and long term

  • It is essential to know whether MPR has sufficient liquid assets to finance the current operations?

Historic and projected fundraising event revenue and expense

  • This is crucial because it allows us to see where our increased vision into fundraising will need to differentiate from years past and if that increase in resources is warranted

Staffing models

  • Is MPR structured efficiently? Is there anywhere to confirm a leaner structure?

Capital investment projects in the works as well as the reasoning behind the diversion from spending the capital that was budgeted for the 2002 year.

  • In my eyes, this is the most crucial issue. What is the main reason for MPR not pursuing the capital projects they had projected for 2002? Was it a cash flow issue? Vision change? Halting all projects because of revenue loss?

Endowment

  • Are realized gains treated as current income?
  • Can it be sold?
  • Forecasting of Endowment Position and Future Use