Presentation on theme: "Financial Planning Support for Parish Planning"— Presentation transcript:
1 Financial Planning Support for Parish Planning Larry W. Boone, Ph.D.Management DepartmentThe Peter J. Tobin College of BusinessSt. John’s University
2 Agenda: PARISH PLANNING PROCESS (Overview) Purpose & future direction Mission, Vision, Goals, StrategiesFINANCIAL PLANNINGSupport function for parish planningEXAMPLE3 strategies/initiativesExcel-based scenarios
3 OVERVIEW of the Planning Process MISSION Who we are - broad purposeVISION What we want to be - next 3-5 yearsGOALS What we want to achieve - annualSTRATEGIES How we will accomplish goalsRESOURCE ALLOCATION LT financial plans and budgetsPERFORMANCE MEASUREMENT Scorecard
4 PARISH PLANNINGEstablish and communicate direction and priorities for future – how we will be “better”Motivate parishionersInvite parishioner participationEstablish rationale for decisions (such as new initiatives and budgets)
5 PLANNING PARTICIPANTS Pastor (or Pastoral Leader)Pastoral Council or a Planning Team empowered by the pastorPastoral StaffLay Ministry LeadersParish Community LeadersFinance Committeemay participate throughout the process or at the end to evaluate financial needs and plans
6 ROLE OF FINANCE COMMITTEE Encourage visioning“Big picture” thinking; meeting parishioner needs and desires (current and future)Encourage planning team’s creativitydo not inhibit early stage “dreaming”Support, empower planning team’s workFacilitate implementation of strategieswhere visioning meets practicalityProvide alternatives for funding initiativesprovide “what if” funding options
7 ROLE OF FINANCE COMMITTEE Example: do not say “We cannot afford this new initiative.”Alternatively, explain what it will take to finance the initiative:special fund-raising effort1.5% increase in weekly giving$25,000 savings from among current program expendituresetc.
8 PLANNING – ALLOCATE RESOURCES Judge the most effective uses of limited resourcespeoplemoneyfacilitiesequipmenttimeUse the planning process to prioritize allocationsMatch your existing resources to prioritized Goals & StrategiesDecide which is more feasibleachieving what you can with existing resourcesorobtaining more resources
9 THE FINANCIAL PLAN Document that specifies funds needed by an organization for a period of timethe timing of inflows and outflowsthe most appropriate sources and uses of funds.Financial plan helps answer three questions:What funds will be required during the planning period (how much)?How will necessary funds be obtained (sources)?When will more funds be needed (timing)?
10 EXAMPLE: 3 INTIATIVES IDENTIFIED Our parish will:develop a website to promote interactive communication and online prayer groupscreate welcoming and hospitality ministriesestablish a sister parish in a developing country(in this priority order)
11 FINANCIAL PLANNING STEPS: Using Excel, create a 5-year high-level parish statement of revenue and expenditures (for consumption by non-financial members of parish planning team)Establish future assumptions for all revenue and expenditure categoriesDevelop feasible funding and timing scenarios for new strategiesDiscuss scenarios with the planning team
12 ASSUMPTIONS - Key Role in Financial Planning List all assumptions to expose the foundation of your planning calculations and derivations.Change assumptions to “test” effects of alternative strategies.Assumption examples:Collection revenue +2% per year (average of last 5 years).Donations and bequests -5% per year due to expected relocation of parishioners.Salaries +2% per year.Fringe benefits +8% per year due to increased health care premiums.Web site strategy - Capital expenditure of $5,000 in 2014 for new computer/server; monthly maintenance expenses of $500 for labor and site fees.Welcoming/Hospitality ministries strategy – starting in 2015 $400/month.Sister Parish strategy – starting in 2016 $10,000 per year.