Chippewa Watershed Conservancy: Not-for-profit Budgeting

Case II: Functional and Flexible Budgets

Case II is a continuation of Case I., In this case, you will convert the line-item budget developed in Case I into a functional budget. Then you will employ further information to create a flexible budget. Refer to the Case I Solution for data.

Assume that the CWC has adopted the budget as developed in Case I even though it does not hit the 5% budget surplus target. Now they want you to allocate the budget into functional areas. Revenue is not allocated to functions. However, expenses are allocated to functions using the percentages shown in the following section.

Part A: Functional Budget

Program Functions Stewardship: Management of easements and preserves.

Outreach: Publicity and Education.

General Program: Activities directly related to project development.

Support Functions

Administration: Management of the organization and other activities not directly related

to project development

Fundraising: Grant-seeking, special events, and fund appeals

P R O G R A M S U P P O R T

Stewardship Outreach GeneralAdministration Fundraising

Program

Expense

Travel 50% 10% 20% 10% 10%

Special Events 100%

Conferences 50% 50%

Fundraising 100%

Insurance 60% 20% 20%

Newsletter 80% 20%

Postage 10% 30% 10% 10% 40%

Professional Fees 50% 50%

Publicity 100%

Salary 30% 10% 30% 20% 10%

Supplies 30% 10% 20% 30% 10%

Payroll Taxes 30% 10% 30% 20% 10%

Telephone 30% 10% 30% 20% 10%

Questions for Part A:

1) Create a Functional Budget for the upcoming year. Use the revenue and expense allocations provided above and the Case 1 Solution for the next year.

2) What percent of the total expense budgeted by the CWC for the next year is spent in each of the five functional areas? What percent is Program expense (total of Stewardship, Outreach, and General Program) and what percent is for Support (Administration and Fundraising)?

Next Year.. Next Year Total %increase Dollar incrase 0% $ 1,040.00 $ 6,240.00 $ 3,120.00 $ Special Events Contrbutions 50% $ 9,600.00 $ 9,600.00 $ 4,800.00 $24,000.00,$48,000.00 30% $ 2,400 00 20% $ 8,000.00 100% $ Endowment Income Interest Income 25% $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00,$ 6,000.00 400.00 400.0 400.00 1,600.00 12,540.00 17.740.001$ 9,820.00 $45,900.00 $86,000.00 $ (8,600.00 25%$ 880.00 $ 88000 $ 1,540.00 $ 1,100.00'$ 4,400.00 0% $ 2,080.00 $ 5,200.00 $ 3,120.00 s 2,200.00 S Special Events $ 3,600.00 s 7,200.00 25% $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00,$ 6,000.00 25% $ 900.00 $ 900.00 $ 900.00 $ 900.00-$3,600.00 10% $ 3,850.00 $ SS0.00 $ 550.00 $ 550.00-$ 5,S00.00 25%$ 825.00 $ 82S 00 $ 825.00 $ 825.00-$3,300.00 25% $ 9,500.00 $ 9,500.00 $ 9,500.00 $ 9,500.00,$38,000.00 25% $ 1,100.00 S 1,100.00 $ 1,100.00 $ 1,100.00'$ 4,400.00 950.00$95000$950.00 $ 950.00 3,800.00 25% $ 330.00 $ 330.00 $ 330.00 $ 330.00"s 1,320.00 27,755.00 $23,895.00 22,515.00 $20,355.00 94,520.00 Postage Professional Fees 10% of Salary each quarter Total Expenses Surplus/IDeficit (15,215.00) (6,155.00) 12,695.00 $25,545.00 Next Year.. Next Year Total %increase Dollar incrase 0% $ 1,040.00 $ 6,240.00 $ 3,120.00 $ Special Events Contrbutions 50% $ 9,600.00 $ 9,600.00 $ 4,800.00 $24,000.00,$48,000.00 30% $ 2,400 00 20% $ 8,000.00 100% $ Endowment Income Interest Income 25% $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00,$ 6,000.00 400.00 400.0 400.00 1,600.00 12,540.00 17.740.001$ 9,820.00 $45,900.00 $86,000.00 $ (8,600.00 25%$ 880.00 $ 88000 $ 1,540.00 $ 1,100.00'$ 4,400.00 0% $ 2,080.00 $ 5,200.00 $ 3,120.00 s 2,200.00 S Special Events $ 3,600.00 s 7,200.00 25% $ 1,500.00 $ 1,500.00 $ 1,500.00 $ 1,500.00,$ 6,000.00 25% $ 900.00 $ 900.00 $ 900.00 $ 900.00-$3,600.00 10% $ 3,850.00 $ SS0.00 $ 550.00 $ 550.00-$ 5,S00.00 25%$ 825.00 $ 82S 00 $ 825.00 $ 825.00-$3,300.00 25% $ 9,500.00 $ 9,500.00 $ 9,500.00 $ 9,500.00,$38,000.00 25% $ 1,100.00 S 1,100.00 $ 1,100.00 $ 1,100.00'$ 4,400.00 950.00$95000$950.00 $ 950.00 3,800.00 25% $ 330.00 $ 330.00 $ 330.00 $ 330.00"s 1,320.00 27,755.00 $23,895.00 22,515.00 $20,355.00 94,520.00 Postage Professional Fees 10% of Salary each quarter Total Expenses Surplus/IDeficit (15,215.00) (6,155.00) 12,695.00 $25,545.00