This document provides an overview of budgeting basics for nonprofits. It introduces the instructor, Ernie Paszkiewicz, CPA, and outlines the goals of discussing budgeting without tests or practice sets. The document then covers various budgeting considerations like using a cash vs accrual basis, determining an appropriate level of detail, identifying fixed and variable costs, ensuring compliance, and managing cash flow. Key aspects of creating and maintaining budgets are addressed at a high level.

1. Budgeting Basics for Nonprofits on behalf of the Community Law Center September 20, 2010

2. About the Instructor Ernie Paszkiewicz, CPA Gross, Mendelsohn & Associates 36 S. Charles Street, 18th Floor Baltimore, MD 21201 epaszkiewicz@gma-cpa.com office: 410.685.5512 | direct: 410.900.1339 www.gma-cpa.com Feel free to contact me anytime with questions.

4. Have interaction

5. No tests or practice sets

7. How do you manage the organization? (balance sheet and income statement)

8. What are your external needs?

9. What are your in-house capabilities?

11. GAAP or non-GAAP items

12. Level of detail … account, programs, grant-specific

13. Fixed and variable costs

16. Trying to force them to manage on accrual basis can actually be a mistake since it can confuse them

17. Major difference is concept of receivables and payables

19. When to record pledges

20. Restrictions placed by donors

21. Depreciation of fixed assets

22. In-kind contributions – goods and services

24. What is permanently restricted asset vs. an “endowment”?

25. Income vs. agency transactions

27. Within program how many different programs?

28. Within a program how many different funding sources or individual grants?

30. Variable costs increase or decrease with number of participants

33. Must make sure costs are allowable under grants, particularly with federal fundings

34. Actual allocations must be on real level of effort, not budgeted level of effort

36. Do you opt for Excel or other spreadsheets for budgeting?

37. What are some tricks to spreadsheet formats?

39. Segregating input areas from calculation areas

40. Even vs. seasonal estimates

42. A budget is a guide, so what about unbudgeted items? When do you change the budget?

44. Property purchases, debt payments, receivable collections, deferring payables

45. What’s a good target cash reserve level? Will funders think you aren’t worthy if you have too much cash? The penalty for fiscal responsibility.