May 17th, 2014 Budget Planning Meeting

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Attending: Jamie, Joe, Lisa G, Lucia, Noe, Steve

At present, Mass Pirates financial scenario is pretty simple, and our current bookkeeping strategy is probably adequate.

A budget is a financial plan for the future. A budget should take into account things that you are planning to do (and the resources you'll need to do them.

Like most small non-profits, we have two main resources to work with: (1) cash and in-kind donations, and (2) volunteer time and manpower. Avoid overextending yourself in either of these categories; budgeting includes being mindful of your resource limitations.

KPI = Key Performance Indicator. What are the goals and KPIs for the Massachusetts Pirate Party? For example, they might include the number of registered voters, the percentage of registered voters, the number of regular donors, or the number of secondary (or tertiary) volunteers.

When planning budgets, you'll typically separate things into categories. For example, we might break down income by source: events, on-line donations, donations from major donors, and donations tied to specific events. A simple budget looks similar to a profit and loss statement, with projected income at the top and projected expenses at the bottom.

One can also budget according to goals. For example: "what would it take to run n candidates?".

Over the last few weeks, we've spent a lot of time gathering signatures. It would be helpful to put together some records about how long it took. Once we've done this, we can use past data to develop future budgets. The record keeping doesn't need to be elaborate; a spreadsheet or wiki page would be sufficient.

We decide to try this, using the wiki.

You have to consider cash flow when budgeting. Your annual budget might be okay, but it's possible to become broke during the middle of the year. For example, events typically require up-front expenses: food, space rental, etc. While the event may generate revenue, you still need cash to cover the up-front expenses.

Monthly income and expense totals are useful for planning, particularly when annotated with explanations for large inflows and outflows.

From an accounting perspective, in-kind contributions should be treated as income and expense. For example, $200 in-kind for printing should be recorded as $200 from the donor, and $200 to the printer. This is not how we'd report it to the OCPF, but it's useful for budgeting. For example, if we didn't have that $200 in-kind donation for the printer, we might have had to pay the printer with cash.

Secondary and tertiary supports - folks who show up once in a while and spend a few hours helping out - are very important to non-profit organizations. It's worth trying to grow the number of secondary and tertiary supporters.

Thank you notes can be a useful outreach device. They can act as receipts, and they give you an opportunity to make donors feel good about their contribution. It's also worthwhile to develop a phraseology for people that help you with volunteer time.

Try to figure out what your volunteers are good at, and capitalize on their strengths.

We brainstorm income and expense categories, along with potential KPIs.

Income categories:

  • Small donations
  • Pass the hat (if we provide envelopes for people to write their names and addresses on - we can't accept anonymous contributions)
  • In-kind donations
  • Large donations

Expense Categories:

  • Printing
  • Space / event registration
  • IT
  • Food
  • Entertainment
  • Others

Possible KPIs:

  • # candidates on the ballot
  • # of people registered
  • # of public media appearances
  • # of public debate events
  • # of active pirate chapters
  • # of subscribers to our email lists.

A few planned expenses for Q3-Q4 2014:

  • Freedom Rally ($300)
  • Flyers ($175 for 5000)
  • Food ($50)
  • Domain Registration ($22) by October, or earlier