Budgeting and Finances (EPHE 253)

megawalelord's version from 2016-03-15 22:17


Question Answer
Name some current finance trendsEquity, Accountability, Efficiency, self-supporting programs, creative resource mobilzation
What does a budget do?part of the planning, enables implementation, marks progress, helps prioritize, keeps a historical record, symbolic commitment

Costs and Expenditures

Question Answer
Operating CostNormal costs of operation
Name some operating costsstaff, lighting, internet, rent
Capital costLarger, non-recurring costs (usually related to property or equipment)
Name some capital costsoffice equipment, computers, building
Direct costsCosts directly related to developing & delivering the product
Name some direct costs: Direct materials, direct labor
Question Answer
Indirect costsservices in an organization that are shared across programs
Name some indirect costsaccounting, janitorial services, overhead management
Fixedcosts incurred regardless of # of people using the product
Name some fixed costsmarketing expenses, cost of website
Variable costsdependent on the number of customers served


Question Answer
Compulsory resources are also known asBase funding
Examples of base funding aretaxes, government support
Earned incomerevenue generated by the services you provide
Examples of earned income areregistration fees, rentals, sales, permits
Contractual receiptsrevenue earned from deals with third parties, fixed outputs for a price
Financial assistanceexternal funds from other parties or organizations

Financial Assistance

Question Answer
FundraisingDone for a cause, rallies large groups of people to raise money
PartnershipTwo parties both contribute money to a cause or product
SponsorshipOne party trades money for exposure in the community
GiftsLarge and valuable gifts of money or other expensive stuff (buildings)
In KindGiving time or volunteer services for free


Question Answer
What is a budgetassessing costs and determining where the revenue will come from to cover them
What are the three types of budget?Line item, program budget, performance budget
A line item budget isA list of all expenses, separated into categories (staff, equipment, liabilities)
A program budget is...Clustering associated costs for a facility or event
A performance budgetAssesses workload, efficiency and effectiveness of money spent
Performance budgets use... to keep on trackperformance indicators and interim reports

Budget Management

Question Answer
A budget worksheet details...cost estimates, sources of potential revenue, sources of expenditure, details of program
Financial reporting is...Using balance sheets and income/operating statements
A purchase order system is...requiring approval to spend money
Banking authority is...Only specific people can withdraw from accounts
Capital purchase authority...Must seek approval for large purchases
A balance sheet comparesAssets vs Liabilities
An asset can bea building, equipment, cash, prepaid expenses


Question Answer
Actual cost pricing ...charges based on costs of designing/running the product
non-cost related pricingcharges based on consumer demand, social benefits
Pricing objectives can be to...maximize profit, recover costs, maximize accessibility, promote social equity or demarket a product
Breaking even is when..the costs equal the revenue

Pricing Strategies

Question Answer
Penetration pricingencourages participation through subsidization, scholarships, fee-less days
Neutral pricingis based on finding the best price for the most people to pay for the product
Skim pricingis based on pricing insensitivity AKA the supplier chooses the cost as there is high demand
Cost based pricingis based on the desire to make a profit, can be based on established profit margins
Competitive pricingis based off of maintaining the price level with the competition (think grocery stores or gas stations)
Demand pricingis based off what the market will bear
Value based pricingis based on evaluating the target market demand at different pricing and selecting the optimal price for the target

Overcoming Pricing Challenges

Question Answer
Contract ProgrammingThe client bears the brunt of the pricing
Joint SponsorshipTwo parties split the cost
Special Interest AssociationsOffer a lower price because client is passionate about product
VolunteersReduce cost by offering free labour
GiftLarge donation of money or other expensive items (MRI, Building)

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