A Sample Line-Item Budget for a Human Services Organization
The sample budget for the fiscal year 2023/2024 for the East Los Angeles College Foundation (ELACF) is based on the comparison to the fiscal year 2018/2019 budget, considering rising costs and expenses, as well as an increased income. The fiscal year 2018/2019 annual report does not contain all the expense articles required for the 2023/2024 prediction (East Los Angeles College Foundation [ELACF], n.d.).
Hence, two cells in Table 1 referring to 2018/2019 are marked as non-applicable. For 2023/2024, estimated figures are higher in income and expenses, ultimately resulting in higher revenue. Although the numbers are only estimated, setting a financial framework allows checking whether the organization’s goals and tasks can be achieved and its mission accomplished.
Table 1. A Sample Budget for ELAF: Summarizing 2018/2019 and Predicting for 2023/2024.
Budget Priorities
Budget priorities regarding the organization’s mission include personnel and consultants’ salaries, costs of goods and services, development and fundraising, and miscellaneous support, including college and student support. By prioritizing these aspects, it will become possible to arrange to thrive at work, which means that all team members will feel the atmosphere of growth and development and the desire to work energetically (Boyd, 2015). Financial management should involve planning and learning from past experiences (Hamilton Foley, 2022).
Hence, the selected priorities are based on the organization’s previous years of activity. The ELACF’s mission is to support ELAC students by seeking scholarship funding and developing partnerships with communities and philanthropists eager to support education (ELACF, n.d.). Therefore, allocating funds for personnel and consultants’ salaries and college and student support constitute the most significant expenditure. Compared to the fiscal year 2018/2019, an estimated figure for miscellaneous support is considerably more significant as the need to support students is becoming increasingly more pronounced and urgent every year.
Funding Relationships
The relationship between the organization and outside funders is very cordial and friendly. Prominent alumni and donors are willing to support ELACF and are happy to see how their donations work to provide young people access to education (ELACF, n.d.). Since ELACF is a non-profit organization, being on good terms with its donors and the community in general is its top priority (ELACF, n.d.). The organization’s successful existence and functioning depend on its funder’s willingness to support its mission continuously and uninterruptedly. Hence, ELACF’s board constantly works on looking for new donors and sustaining a good relationship with the old ones to promote its mission and fulfill its goals.
Support of Key Strengths and Opportunities
The budget supports ELACF’s significant strengths and opportunities by focusing on different stakeholders, including the needs of both personnel and college students requiring financial support. It is a known fact that community-based organizations serve as the primary mediators of social change (Bess, 2015). In the case of ELACF, promoting social change is both a goal and a means of attaining it. The organization’s success depends on internal processes (arranging the work processes) and external ones (reaching out to donors and funds).
Another advantage of the organization is its long-term vision, an integral component of a successful financial framework (Ho, 2018). Moreover, workforce analytics involved in ELACF’s budget planning allows for developing a more effective strategy (Levenson, 2018). Thus, the budget supports the organization’s key strengths, stability, community- and person-centeredness, since it includes the needs of the personnel who provide stability and the students who require a person-centered approach.
Reinforcement of Effectiveness
The inclusion of the main goals of the organization in the budget reinforces its effectiveness. Performance budgeting is also rather crucial (Ho, 2018). Although the suggested budget is a line-item one and does not include performance analysis, concluding the remaining revenue after covering all the expenses is still possible. In the case of ELACF, it is evident that the organization is run successfully, making enough revenue to sustain its operations in a critical situation associated with the lack of resources.
Overall, budget planning and evaluation promote the effectiveness of any organization by helping the board to see the gaps and meet them promptly (Osebo et al., 2019). Working on a budget sharpens the organization’s understanding of its aims, presents an accurate picture of what it can afford, and promotes effective ways of managing financial issues (“Chapter 43: Section 1,” n.d.). Therefore, the budget reinforces the organization’s effectiveness to a great extent.
Justifying the Budget
The budget planning process is, first of all, justified by the previous experience of ELACF’s expenditures and income. As can be deduced from the fiscal year 2018/2019, the fiscal year 2023/2024 budget is quite realistic (ELACF, n.d.). The budget is also justified based on other course readings and outside resources. For instance, it contains the main aspects of expenditures, which is a vital element of successful budget planning (“Chapter 43: Section 1,” n.d.). Also, it includes cash flow planning, which is considered an essential aspect of budgeting (Gellman, 2021). In addition, the budget reflects the organization’s financial position, which is essential for successful planning (Hamilton Foley, 2010). Therefore, the suggested sample budget for ELAF is justified due to the inclusion of the main aspects of the organization’s income and expenses.
References
Bess, K. D. (2015). The impact of everyday experiences on planned organizational change: Applying schematic change theory to the study of narratives in community-based organizations. Journal of Community Psychology, 43(6), 739‒759. Web.
Boyd, N. M. (2015). Introducing thriving at work to the field of community psychology. Journal of Community Psychology, 43(6), 794–809. Web.
Chapter 43: Section 1: Planning and writing an annual budget. (n.d.). Community Tool Box. Web.
East Los Angeles College Foundation. (n.d.). Annual report summary 2018-2019. Web.
Gellman, M. (2021). Capital budgets play an important role in nonprofit planning. Nonprofit Accounting Basics. Web.
Hamilton Foley, E. (2010). Budgeting for capital. Nonprofit Accounting Basics. Web.
Hamilton Foley, E. (2022). Budgeting and financial planning. Nonprofit Accounting Basics. Web.
Ho, A. T.-K. (2018). From performance budgeting to performance budget management: Theory and practice. Public Administration Review, 78(5), 748-758. Web.
Levenson, A. (2018). Using workforce analytics to improve strategy execution. Human Resource Management, 57(3), 685-700. Web.
Osebo, G. P., Debebe, A. D., & Eshetu, W. T. (2019). Impact of budgeting process on organizational effectiveness: Evidence from Wolaita zone selected woreda public finance sectors. Research Journal of Finance and Accounting, 10(1), 7-15. Web.