We take a different approach. Basically, the idea is that all the money raised this year will be spent next year. This years budget is based on the money raised last year. We never achieve that goal but we do our best to come close.
At the last PTO meeting of the year we need to approve the budget for the next year. This budget needs to be in balance (can't be negative) and can't account for fundraisers beyond October. This is to make sure we are not being overly optimistic in our estimating. Inevitably, some of the activities we want to fund are shorted (not funded to the desired level) in the budget. During the year, the PTO votes to increase the funding level of those items, based on the actual fundraisers that come it. Unexpected items are also added throughout the year as needed.
We are a 501c3 org so keeping a large balance at the end of the year is not an issue for us.
When I became the PTA president, we were carrying $5000 over every year just because there was no need at the school for more money (at the time). I figured our first fundrasier would fund almost everything, so we canceled the 2nd fundraiser (no need) and used $3000 of the money carried over. We started our year this year with $2000 and are doing 2 fundraisers. We did cookie dough sales as a new one and are keeping the magazine sales the teachers like (they get a discount). As a previous poster said, the school & families appreciate it when you don't have to fundraise.
We happen to have more than this at the moment, but our general rule has been to hold on to about as much as we need to get through the months of September and October, because we don't get any real significant funds coming in through our big catalog sale until the middle of October. Beyond that, we don't see any point in keeping anything because we're not saving up for any big purchase, and don't anticipate the need to do so anytime soon.
We have not more than $5000, or more than enough to cover discretionary funds for the year. If we get more than that we cancel one of our fundraisers. We did this last year and were rewarded with a very nice turnout for more of our family events because we could offer them at little to no cost as well.
The irony of commitment is that it’s deeply liberating-in work, in play, in love. The act frees you from the tyranny of your internal critic, from the fear that likes to dress itself up and parade around as rational hesitation. To commit is to remove your head as the barrier to your life. --Anne Morris
How much money do you keep in the bank each year to make sure you have a nest egg - just in case?
We currently have around $10,000 that is not part of our budget - it's just in an account. We've been chipping away at it (was a LOT higher a couple years ago) but we don't know how low we should go and still be financially responsible to the organization.
