Budgeting Exercise

You are the Executive Director (ED) for a non-profit agency located in the inner-city. It serves as a food pantry for residents of the city who have run out of food. They may only come in to receive food once a month. Proof of residence is required. There is a basic intake form that attempts to identify other services that the person/family might need. A list of community resources is available to the workers. 
In the last two years, the program has expanded beyond food distribution to include several other programs. One program provides mentoring for children ages 6-16. Homework assistance, socialization groups, one on one supportive counseling, recreation groups, substance abuse groups, and ESL classes are available. Because of the large number of immigrants in the community, the agency has considered expanding the ESL services to adults.
Your Agency receives several grants. One is from the United Way in the amount of $40,500 per year. Another grant is from a city-based Community Development Corporation, in the amount of $70,000 per year. Another grant comes from the local government in the amount of $55,000. In addition several local charitable organizations located in the immediate community contribute a total of $25,000 per year, however, this amount is not guaranteed annually because it comes from donations.
In addition to the grants and allocations, your agency has had several fund raising events in the community: three bake sales: $500; a car wash: $250; a concert: $3,000 and a dinner cruise on the river: $1,500. The total amount of your fundraising has been $5,250. Added to the amount your agency receives in grant funding ($165,500), this gives your agency a total of $170,750 in available money to run the agency.
Because of the current state of the economy, you have received notice that available funding for next year will be cut. The United Way can only commit to 75% of its promised amount or $30,375. The Community Development Corporation can only commit to 85% of its promised funding, or $59,500. And the local government can only commit to 65% of its promised funding, or $35,750. This results in an anticipated income of $125,625. Again because of the unstable economy, it is also doubtful that donations to the agency will come in as high. You anticipate about $3,500. This leaves you with anticipated income of $129,125.
The operating budget for the past year was $170,625. This includes salaries for the five employees, benefits, and transportation and training costs amounting to $136,000. It also includes materials needed to run the food pantry and materials to run the various other programs, $12,000. It also includes the costs of operating the building, $19,000. However, given the rising cost of utilities, health care and overall expenses, you anticipate at least an 8% increase in last year’s budget. This would amount to $184,275 resulting in an anticipated shortfall of $55,150. 
Assignment 4: Budgeting Exercise 
As the ED of this agency, your task is to decide upon some options for this coming year. In four separate groups, come up with some options for this valuable program, using the funding ideas discussed in this module.
HINT: Prepare two budgets, Expense Budget and Income Budget. In the left hand column for the Expense Budget put the dollar amounts for the different types of actual operating expenses, and in the right hand column put the dollar amounts for the different types of projected operating expenses. Similarly, in the left hand column for the Income Budget put the dollar amounts for the different types of actual income (sources of funding or revenue), and in the right hand column put the dollar amounts of the different types of projected income.