I would love to run the PTO in this manner. I think most of the stress and "burn-out" relates to worrying about money and if there is enough to do everything that is planned. I would change the fiscal year to Aug 1 to July 31 though, this would allow all the bills to clear and still leave ample time to plan and get ready for the upcoming year.
I would allow some room for revisions to the budget as the year goes. If I had the option, I would plan a budget for the absolute minimum the PTO wanted to do (field trips, events, etc.) with the money at the beginning of the year(7/31). I would have ideas ready to go if there was an unexpected windfall. (add extra free events, increase teacher appreciation, increase field trip money, etc.) I like the idea of knowing that the PTO would be able to plan ahead.
We used to set amounts for field trips after the last fundraiser in spring. It was very difficult for the teachers to plan and make arrangements in only a month or two.
Last year we felt confident in our budget and set the amount at the beginning of the year. It was good because some teachers used the money for field trips in october. However, the fundraisers did not go as well as planned and I was nervous all year that we would not be able to cover the commitments we had made.
The only problem I see with this method is that most people want to see the money raised during the year to be spent during the year. This is one reason we have not taken on this approach.
Tim,
To quote a PTO article, "Its okay to say no". If the fall fundraiser did extremely well and covered the fundraising budget I would think about not doing another fundraiser. I don't think the majority of parents would complain about not having a fundraiser.
This year we did extremely well with fundraising and only did roses on valentine's day because it is more of a fun tradition (the profit is now a surplus for us). We cancelled our spring fundraiser so the school can do their own without competition. I know most parents won't know the difference in a PTO or school fundraiser, but at least the records show what we did.
I'm sure you'll get good feedback on this, but I'd say that that's about as fiscally conservative as you can possibly be. It's definitely possible to be careful/conservative without going to this length.
Example: Let's say you built up your reserves to cover your expected expenses for the first 3 months of the school year. the -- if your revenues in the first 3 months were well above or well below expectations -- then you'd have time to make adjustments in the second half of the year.
I like your thinking about building up a reserve to ensure that next week's event isn't dependent on this week's fundraiser, but I think there are ways of doing that that are a bit less conservative. The downside to your model is that if, for example, your October fundraiser goes amazingly well... then you'll be sitting on that money for a long time, when it could actually be spent right away to help your group or school.
I was curious as to what other treasurers thought of this method of budgeting for a PTO group:
I would like to build up the savings account so that on 8/31 of each year we would have an amount with which we can create a budget for the ensuing year. For instance if we have $15,000 in the savings account on 8/31, that is what we will assume our maximum expenses will be for the coming year. Any income we have for the year (9/1 to the following 8/31) will go into the savings account so that on 8/31 of the following year we can decide what the maximum expenses for that ensuing year will be. Doing the budget this way ensures that we will not be caught short at the end of our year if our revenue production falls short for that year (assuming we have correctly estimated our expenses). It may take a couple of years to get our savings to the point I'd like us to be at to function this way, but I see it as a fiscally conservative , risk-free way to operate: our expense are based on cash we already have as opposed the current way we operate which is budget and then take in income and pay expenses as we go.
Does anyone see a problem with this method? Thanks for your input.
I can't even begin to respond here. I have added and erased at least 5 responses.
To be succinct, you must adhere to the scenario you presented: only distribute money after teacher requests have been formally presented, discussed and voted upon by general membership. This should only happen after all committees have been closed out, outstanding invoices paid, money allocated to next year and actual excess surplus determined.
I'll add my emphatic "ditto" to those who encourage you to stick to the budget model. A budget is essential to a treasurer's sanity!
Surplus money should be evaluated and spent very carefully, wtih good balance and not just 'first come, first served". But before you allocate any surplus, look ahead and weigh carefully any potential financial risks on the horizon. We have a big, expensive carnival in late spring, just a couple weeks before school ends. If it rains on carnical day, our profits will be at risk. So we hold back some surplus until after carnival.
You are not off base or being too rigid. You are being a responsible treasurer.
I am in 2 PTO groups:
One has a formal budget that is presented at the beginning of the year and they look at how they are meeting their budget on a regular basis. In March they look to see if there is any surplus monies(fundraisers that did better than expected/events and programs that came in under budget) and then they choose items from a school "wish list". The members always know where the group stands financially and there are never any issues with being in the red.
The 2nd group is very different. Their new treasurer put together a report on how the money was spent the previous year in hopes of getting the group to make a budget and be a bit more organized. It didn't work. They spend willy nilly, many times without any input from membership, they don't seem to have a specific mission other than spending money on whatever request comes to them. It drives me insane. Last month they were discussing items to cut because a fundraiser they did made less than expected. The discussion went on and on until I finally suggested that we needed to have that report the treasurer put together in front of us and have a list of expenses we KNOW we have for this year, then look at what we have left and begin to analyze all expenditures on the basis of how many students will benefit and if the expenditure will improve the educational opportunities at the school. It was finally agreed to do that for the next meeting. They really have no idea where they stand financially.
Not having a budget and proper accounting of funds can wreak havoc on a group. They can end up spending money they don't have, cause hurt feelings by funding one thing and not another or funding things disproportionately, and leave themselves open to theft by not having a firm grip on where the money is going. It also makes the group look unprofessional and can cause parents to be skeptical of raising funds because they don't know where they're going.
