when your budget wont

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WHEN YOUR BUDGET WONT Making the Hard Financial Decisions BUDGE

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BUDGE. Making the Hard Financial Decisions. When your Budget wont. Balanced Budget. How to find ways to prepare and maintain a realistic & BALANCED school budget despite: Decreased enrollment, Increased operating expenses, Financial hardship and - PowerPoint PPT Presentation

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Page 1: When your Budget wont

WHEN YOUR BUDGET WONT

Making the Hard Financial Decisions

BUDGE

Page 2: When your Budget wont

BALANCED BUDGETHow to find ways to prepare and maintain a realistic & BALANCED school budget despite: Decreased enrollment, Increased operating expenses, Financial hardship and A lack of commitment to Christian

Education.

Page 3: When your Budget wont

INTRODUCTION

What is the Current Enrollment?What is the Projected Enrollment?Will you end the year in the red or the

black?Can you afford to keep everybody on staff?Will you upgrade any books this year?Will you increase the tuition and/or the

church subsidies?How much of the back tuition can you collect

before the end of the year?

Page 4: When your Budget wont

DECREASED ENROLLMENT

If you don’t know why your enrollment is down - No amount of money will save you.

WHY?!?!?!

Why?!?!

Page 5: When your Budget wont

DECREASED ENROLLMENT

Reputation/Perception – Ask what is and fix what you can fix

Faculty and Staff – Qualifications, Gossiping, Attitudes

Outdated Curriculum – • Plan of action to update

Old Buildings and Equipment –• Plan of action to repair and replace

Old Rumors – • Don’t encourage them

No Extra Curricular Activities –• Get some. If have some already Play up what

you do have.

Page 6: When your Budget wont

DECREASED ENROLLMENT

Since the origin of their denomination in the mid-1800s, Adventists have promoted Christian education as a means to acquire knowledge from a Christian point of view. Training young people for the mission of preaching the good news of salvation to others was and is one of the main engines for the development of a fast-growing international K-20 system of education. While Adventist church membership has been increasing in North America, where the church originated before expanding overseas, enrollment in Adventist K-12 schools has been consistently declining since the 1980s.

Factors influencing enrollment in Adventist K-12 schools: A review of the literature

By Gus Gregorutti, doctoral student at Andrews University, 2007

Page 7: When your Budget wont

INCREASING OPERATING EXPENSES

An over extended “Indian Summer”A extremely cold winterOld building or buildingsOutdated equipmentCurriculum UpdatesFood costTeacher/Staff raisesU.S. Post Services increase ratesOffice Supplies

Page 8: When your Budget wont

FINANCIAL HARDSHIP• Job loss

Parents are losing their jobs.• Appropriations are getting smaller

Unions and/or Local Conferences are reducing education appropriations

• “Deep pockets” are drying up People who use to donate before don’t

anymore• Church subsidies are getting smaller

Don’t have children who attend school. So they don’t see the need to give or want to reduce

Page 9: When your Budget wont

NEW SOURCES OF INCOME

• GrantsRemember “free money” is never free. Read the fine

print and make sure your governing body is in agreement. (Grants, donations)

• Different “deep pockets”There are members in your church who will never give a

dime, unless you personally ask them.• Recruit from churches with children

Invite the children who don’t attend to something that showcases the school.

• Visit churches who don’t have children in the schoolTake the children’s program to the churches who have no

direct connection to the school.

Page 10: When your Budget wont

• The parents of today didn’t enjoy their SDA Education experience, so they don’t send their children .• The quality of education is sub par or is

“the same” as the public schools, so why pay?• I don’t like Teacher Y or Principal X, so I

don’t want my children to be taught by them.• I went to public school and I turned out

fine.• I’d rather invest my money elsewhere.

A LACK OF COMMITMENT TO SDA CHRISTIAN EDUCATION

Page 11: When your Budget wont

A LACK OF COMMITMENT …

Shane Anderson “How to Kill Adventist Education” writes it this way…

Think of it this way: Do we really believe that there are large numbers of passionate, highly committed Seventh-day Adventists-who also just happen to think that a school that would teach their children that that very same Adventism is not worth considering? Of course not. Surely what we’re seeing here is a lack of commitment not just to our schools or other institutions, but to Adventism itself. Here is the core of our current crisis.

Page 12: When your Budget wont

According to Harold Lee, former president of the Columbia Union Conference, a comparative study between Adventists and 28 other Protestant denominations reveals that “members are giving [money] far less today than in the past. In 1968 giving was at 10.8 percent of after-tax income. By 1996 it had declined to 4.5 percent. This decline represents a 58 percent decrease in the portion of income being given by church members. . . . Church members are voting with their feet and with their dollars.”1

Shane Anderson “How to Kill Adventist Education”

Page 13: When your Budget wont

BUDGETS – WHY DO WE NEED THEM?

• Determine how to get out and stay out of debt• Build an Emergency

Cash Fund• Set & prioritize

financial goals• Be a smarter consumer• Learn to live within

your means• Live on less money, so

you can work less

• Pay your bills on time• Meet your school’s

changing financial needs• Reduce stress• Distinguish between

wants and needs• Stop making ends

meet by borrowing• Sleep at night

Page 14: When your Budget wont

BUDGETING 101

Budgeting lies at the foundation of every financial plan. It doesn’t matter if you’re living paycheck to paycheck or earning six-figures a year, you need to know where your money is going if you want to have a handle on your finances. Unlike what you might believe, budgeting isn’t all about restricting what you spend money on and cutting out all the fun in your life. It’s really about understanding how much money you have, where it goes, and then planning how to best allocate those funds.

Jerry Vohwinkle – Money Financial Planning http://financialplan.about.com/od/budgetingyourmoney/tp/budgeting-101.htm

Page 15: When your Budget wont

HOW TO CREATE A BUDGET

• Identify your Needs Students, Staff, materials, facilities …

• Identify your WantsMore students, Extra curricular activities, larger

buildings, the latest technology• Identify your Income

Tuition, subsidies, grants, donations• Identify your Expenses

Salaries, utilities, maintenance, curriculum materials•Study Previous years for possible trends

Does an election year make people nervous

Page 16: When your Budget wont

WHO ARE THE STAKEHOLDERSWHO SHOULD HAVE INPUT?

• Business Manager/Treasurer• Principal• Finance Committee• School Board• Constituent Church Pastors• Parents/Guardians• Local Conference

Page 17: When your Budget wont

TOP 5 BUDGET BUSTERS• Staffing/Salaries

Pay increases, benefits• Building Upkeep and Maintenance

Repairs, replacements• Curriculum and Program Updates

New textbooks, software, science, testing• Administrative Cost

Office supplies, meetings, classroom materials• Utilities and Day to Day Operating

Gas, electric, food service, landscaping

Page 18: When your Budget wont

PRESENTING THE PRELIMINARY BUDGET

• Remember it’s not personal• Be prepared to go back and make major changes at least 3 times.• Ask for suggestions• Take notes• Share the hard-making decision with larger body, but make sure they have all the facts.

Page 19: When your Budget wont

BUDGETS ARE NOT WRITTEN IN…

It can be..• Adjusted•Modified• Tweaked• Reworked• Sliced• Slashed

Page 20: When your Budget wont

BIG MONEY VS. LITTLE MONEY

Page 21: When your Budget wont

BIG MONEY OR LITTLE MONEY

• Whether you have a money tree in the back yard

• An envelope hidden under the mattress.

• An alumnus who just loves their Alma Mater

• A faithful church member whose belief in Christian Education far exceeds their monthly $10.00 donation Christian

Education

Page 22: When your Budget wont

IT ALL COMES DOWN TO CAREFUL MONEY MANAGEMENT

EXPENSES INCOME

Page 23: When your Budget wont

REVIEW

• Look at the factors that affect or impact your budget

enrollment, economics, operating expenses, attitude towards your product

• Understand the basics of budgeting and why you need to budget.

Needs, Wants, Income, Expenses and History Budgeting 101

Page 24: When your Budget wont

• Get input from the StakeholdersProverbs 11:14 - Where no counsel is, the

people fall: but in the multitude of counselors there is safety.

Proverbs 15:27 - Without counsel purposes are disappointed: but in the multitude of counselors they are established.

• The first budget usually gets sent backBudgets will need to be adjusted several

times before it makes sense and finally gets voted.

• Good money management skills are NECESSARY

Regardless of the amount of money on the tree or under the mattress

Page 25: When your Budget wont

IN CONCLUSION…

• Budgeting is no easy task.• It takes skill, knowledge, patience and

MUCH PRAYER!!!!• Check your personal financial commitment

to God.• You can’t and shouldn’t do it alone.• Establish a network with others in the same

position, but with greater success.• BEFORE YOU START, Ask for the guidance

and wisdom of the Holy Spirit.

Page 26: When your Budget wont

HAPPY BUDGETING!!