ECE 15 Administration Reading #3: Budgeting and Finance

Transcription

1 ECE 15 Administration Reading #3: Budgeting and Finance I. Organizational Structure Your budget and financing is closely connected to the organizational structure of your program. There are two main subgroups related to organizational structure. Nonprofit Proprietary (means that a program is privately owned and managed) A nonprofit program must be incorporated as such. A proprietary program falls into many subgroups: sole proprietorship, partnership, or corporation. Nonprofit Programs Preschools are eligible for nonprofit status because they serve an educational function. There are various steps involved in forming a nonprofit, tax exempt, program. The ultimo ate goal is to be approved for 501(C)(3) tax exempt status. The most immediate step is to form a Board of Directors. The Board of Directors is the governing body of a nonprofit program. Nonprofit programs are generally administered by a paid staff. Nonprofit programs pay salaries to their employees. They may accept payment for their services. Nonprofit status brings other benefits beyond being tax exempt. The government and other entities often offer grants and subsidies to nonprofit organizations. Proprietary Programs Remember, a Sole Proprietorship was the first subgroup mentioned above. In a sole proprietorship one person controls the business. He or she retains all responsibility and decision making power. This person typically finances the program using her personal resources or credit. The sole proprietor has to claim all income and expenses on their personal income tax. The advantage of sole proprietorship it total control. A sole proprietor may choose to form an advisory board. 1

2 The second subgroup of proprietary programs mentioned above was the Partnership. A partnership is formed when two or more individuals act as partners to establish and run a program. There is no limit to the number of partners you may have. It is important to clearly define the duties and responsibilities of each partner. Often program have financial backing from silent partners. Financial partners are often essential to the development of a program. Their involvement is strictly financial, as is their return. Active partners are those who are all involved in the day-to-day operation of the program. Active partnerships take enormous planning and commitment to an agreed upon vision and division of duties. Partnerships may vary in the percentage of ownership held by each partner. Corporations If a program is a nonprofit program it must be in corporate. Proprietary programs may also choose to incorporate. Corporations require officers and boards of directors. Incorporation is done through individual states and must be handled by a professional tax accountant or attorney. II. Budgets Start-up The start-up phase of opening an early education program required a projected budget. This budget is a spreadsheet reflecting the projected revenue (income) and projected expenses. When a program begins operation two budgets are prepared. The Start-up budget reflects all the expenses involved in starting a program. Typical expenses in a Start-up Budget include, for example: Down payment on the purchase of a building, or Rent Deposit Renovation Costs Publicity Salaries prior to opening 2

3 Phone and Utility Deposits Equipment Purchases Materials Purchases Consulting Fees Operations Once a program is established it will depend on an Operating Budget. This budget reflects a yearly income and expense plan. Operating budgets are approved by the program board if the program is nonprofit. Print out "Sample Operating Budget Guidelines" from the link posted on the class homepage. Go to the link and print out the document. Sample Operating Budget A Child's Garden School Preliminary Budget Proposal Income * Registration $ * Tuition September--June Room 1: $ 55, Room 2: $ 47, Room 103: $ 47,430,00 Room 102: $ 44, *Summer 35 $465/ 6 week session $ 12, AM Surround $ PM Surround $ 22, (Contract Rate is $2.50/hr and Drop in Rate is $4.00/hr--the above rate is an average) Holiday Camps $ Fundraising $ Total Income $244,

4 Expenditures Personnel * Personnel September--June Teachers 6@$12.50@6hr/day@22days/month@10 months $99, @$12.50@4hr/day@22days/month@10 months $44, * Assistants 1@$8.00@4hr/day@22days/month@10 months $ * Personnel Summer Staff $ * Substitutes $ * Housekeeper $ * Administrative $ 36, %: $11, Site $24,000) * Benefits $ 25, Sub-Total Personnel $226, Administrative * Equipment $ *Office Supplies $ Postage Printing Phone ADP Licensing/Membership Requirements Liability Insurance * Fundraising Expense $ *Sub-Total Administrative $ * Facilities Rent Utilities Gas Electricity *Sub-Total Facilities $ * Program Expenses Consumable $ Non-Consumable $ Repair and Maintenance $ Food $ Education Parent Education $ Staff Development $ *Sub-Total Program $ *Total Expense $ 244,

5 III. Grant Funding The development and implementation of Early Education programs often requires funds far beyond our personal resources. Those who dream of starting programs often pursue funding through foundations or other sources that share our ideals and goals. These organizations offer grants to individuals and programs which meet their criteria. Students often wonder where to start if they have dreams which need substantial funding in order to become reality. There are various steps to follow in securing grant funding for an early education program. What follows is a general description of the process involved in investigating and securing funding through grants. Assessing Needs Before your search even begins, you must define the program that you wish to fund. What is it that you want to accomplish? Any project you support must align with the needs of your community. Grant providers want to clearly see the necessity of your program. To make sure that your program fulfills a need, compare what your community has now to what you feel it should have. Use this information to create possible solutions. The time you spend investigating the gap between reality and your dream will pay you write your grant proposal. Do preliminary research to find a solid educational basis for your idea. Map out the steps necessary to complete your project including necessary funding at each step. Remember throughout your design phase to keep in mind how you will evaluate your project using measurable outcomes. Make a Project Worksheet The Worksheet Make a preliminary worksheet concerning what you believe you will need for your project. By doing this, you can get a clear picture of what the grant you are searching for must look like. Some items your chart could include are: 5

6 Project Overview Need for Project Research Sources Amount Needed Special Community Circumstance Evaluation Methods Searching for Options The most important piece of advice you can get when beginning your grant search is to carefully match your program with the grantor's award requirements. For example, if the desired grant is only given to schools in inner cities, only apply if you meet that criterion. Otherwise, you'll be wasting your time. With that in mind, three major sources for grant money exist: Federal and State Governments, Private Foundations, and Corporations. Each has its own agenda and differing levels of requirements concerning who can apply, the application process itself, how the money must be spent, and the methods of evaluation. So where can you search for each type? There are some excellent online resources for both grant writing classes and grantee sources. Begin your search for sources at: Rubric for Grant Projects Start with outcomes. Be specific in what you wish to achieve and design your project back from these outcomes. Carefully match your goals and outcomes with those required by the grant advertisement. You can use the Grant Match Rubric below to help make your decision. Talk to the grant contact person to receive specific information about the purpose and goals of the grant. Find research to support your project idea. Programs that have been previously validated have more merit because they have shown success in the past. Find a local sponsor. Get them to help with any red tape or information you might need to complete your grant proposal. 6

7 7 Make your grant proposal interesting to read through good formatting. Remember that people are going to judge your ideas against others and a pleasing and well-organized presentation will get you further. Include pie charts. Set off your information with appropriate indentations. Use language to your advantage. Quote from notable sources. Make a column to accent exactly where in your grant proposal each component of the grant's grading rubric is met. As you write your strategies for the grant proposal, keep assessment methods in mind. Think about how you are going to measurably show what you will accomplish. Look closely at any funding rules to make sure you do not ask for items that the grant will not fund. For example, Florida state grants do not allow food items to be bought with grant money. Check out the grant to see if matching funds are required. Many school districts will not have the money to match even if you are awarded the grant. However, professional volunteers can count as 'in-kind contributions'. Find out whether the grant requires outside evaluators. If so, you might have to pay for them out of your funding. Make sure your budget narrative and your budget summary match exactly. Grants are stamped when they are received. Try to send in your grants a few days early so that it appears you are on the ball. Make a database if one is not currently available of important demographic numbers and statistics. Place this information in your grant proposals as requested highlighting special needs. Get to know your state's grant contact personnel. If they see your name cross their desk and they can place you, you have a better shot. If you plan to write numerous grants, create templates for commonly needed forms. This is especially useful for state and federal grant that repeat a lot of the same information. Be honest both in the grant proposal itself and with yourself concerning what you can actually accomplish. Remember, you have to follow through with whatever plans you made.

8 Grant Match Rubric Proposal: Date: Prospective Grant Provider: Criteria Matches Goals of Grant Provider Pts Earned (Possible: 1-5) Comments Matches Required Demographics Able to be Completed in Timeframe Sustainable after Allowable Grant Period Necessary Funds are Available Evaluation Methods are Compatible The best grant matches will score 4 or 5 in every category. If a score of 3 or higher is not given for each, it is doubtful that this is a good match. 8

9 IV. Ethical Concerns Early Education professionals and students who move from the academic world into the work place are often faced with ethical and moral decisions. Often the truths what seem so self evident in the classroom, whether in regard to Best Practice, Teacher-Child Ratios or teacher salary, are not quite so clear cut in the work world. NAEYC, the early premier education professional organization has been our voice for Worthy Wage for the past three decades. Included below is an early statement from NAEYC stating the ethical and educational concerns involved in salary decision in early education programs. I have included this reading in the Budgeting section of this class because I remember only too well struggling to balance program budgets. Decisions often depend on either asking families to pay more or paying teachers less than their work is worth. This is an ongoing dilemma in our profession. The two sides of the coin reflect first, the undervaluing of the professionally educated early educator and secondarily, the view, in our culture, that families, alone, must bear the burden of early care and education. The National Association for the Education of Young Children Compensation Guidelines for Early Childhood Professionals The demand for early childhood services has grown dramatically in recent years, given profound changes in family employment patterns and family composition and increasing recognition of the importance of early education. Nonetheless, there remains a persistent undervaluing of the work performed by early childhood professionals. As a result, many early childhood programs are unable to offer compensation packages sufficient to attract and retain qualified staff. When program budgets do not provide adequate compensation, children suffer the consequences. Low salaries, few benefits, and difficult working conditions result in higher rates of staff turnover; research demonstrates that children enrolled in programs with high staff turnover are especially vulnerable to impairment in the critical areas of social-emotional and language development (Whitebook, Howes, & Phillips, 1989). 9

10 The National Association for the Education of Young Children (NAEYC) believes that the lack of resources facing many early childhood programs and the concomitant inadequate compensation of early childhood personnel is rooted in the nation's chronic indifference toward young children. Such indifference is apparent in many ways. More young children -- one out of every four children -- are in poverty than are members of any other age group, even though they are the most vulnerable. Unlike other industrialized nations with generous children's allowances, paid parental leave, and universal access to quality preschool programs, the United States offers none of the above. Despite well-documented evidence about the long-term cost effectiveness of comprehensive, high-quality, early intervention programs, only a fraction of those eligible receive needed services. Even with the expected federal expansion of assistance for child care and early education, total need for high-quality services will remain far from met. As a nation, we historically have placed less value on any type of work done for or with young children. Pediatricians earn less than other types of physicians. Kindergarten and elementary school teachers earn less than secondary school teachers (Bureau of Labor Statistics, unpublished analyses). The problems are especially pervasive among early childhood professionals employed in preschool and child care centers or self-employed as family child care providers. The National Child Care Staffing Study (Whitebook, Howes, & Phillips, 1989) found that child care center teaching staff earned annual wages less than one-half of those paid to comparably educated women in other professions and less than one-third of those of comparably educated men. The fact that families are expected to bear the costs of preschool and child care services with limited assistance from public and private sectors further attests to the lack of value assigned to such programs. Because low- and moderate-income parents are unable to afford the full cost of a quality program, the price has been depressed. What parents, even in upper-income families, typically pay is far below actual cost, especially when adequate compensation is figured into the equation. Since personnel casts are the largest component of the program budget (60% or more), they are the most affected when program resources are inadequate. As a result of the undervaluing of their work, early childhood professionals are caught in a vicious cycle. When a service is undervalued, its providers are inadequately compensated. The low compensation makes it difficult to recruit and retain qualified staff. The fact that little financial reward is provided to early childhood professionals who want to work with children serves as a disincentive for seeking training to enter the field or gain further professional development. Individuals who want to work with young children are often forced by economic necessity to look for higher paying jobs. Given the importance of the early childhood years in shaping later development and learning and the increasing number of families relying on early childhood programs, it is crucial that such programs employ personnel with the knowledge and ability needed to provide good care and education for our nation's youngest citizens. While the need to provide additional public and private support to improve affordability and quality of early childhood services has gained better understanding in recent years, more remains to be done. NAEYC calls for all sectors of society to further their efforts to improve the affordability and quality of early childhood services. If children are to receive the level of care and education they deserve, these efforts must rectify the inadequate compensation of program staff. 10

11 NAEYC recommends that the following guidelines be used in decisions related to the provision of compensation of early childhood professionals. It is recognized that some early childhood programs will require additional resources before these guidelines can be implemented. Families alone cannot be expected to bear the additional costs. NAEYC is committed to working for strategies that acknowledge the full costs of quality early childhood program provision and that distribute these costs more equitably among all sectors of society. NAEYC believes that parents and early childhood professionals have borne a disproportionate burden in the provision of early childhood programs. All of society -- children, families, employers, communities, and the nation as a whole -- benefits from the provision of high-quality early childhood programs. It is time that the full cost of this essential public service be shared more equitably by all sectors of society. Early childhood professionals with comparable qualifications, experience, and job responsibilities should receive comparable compensation regardless of the setting of their job. This means that a teacher working in a community child care center, a family child care provider, and an elementary school teacher who each hold comparable professional qualifications should also receive comparable compensation for their work. Early childhood professionals who work directly with young children typically are employed in a variety of settings including public schools; part-day and full-day centers, whether for-profit or nonprofit; public and private prekindergarten programs, including Head Start; before- and after-school programs; and family child care. Despite the differences in setting, the nature of the job responsibilities are generally similar. While the work of all early childhood professionals has been undervalued, those professionals working with children in situations other than serving school-age children during the traditional school day have been the most undercompensated. For example, a recent national study (GAO, 1989) found that teachers in early childhood programs accredited by NAEYC earned roughly half what their counterparts earned in public schools, holding education and experience constant. Even within the public school, salaries have been found to be depressed for equally qualified teachers of preschool children, especially when program funding is based on parent fees or special program subsidies (Mitchell & Modigliani, 1989). As a matter of equity, early childhood professionals who have comparable qualifications and job responsibilities should also receive comparable compensation. Compensation for early childhood professionals should be equivalent to that of other professionals with comparable preparation requirements, experience, and job responsibilities. While removing disparity within the early childhood profession is an important step forward, given the undervaluing of all work with young children, it is an insufficient goal. Early childhood salary schedules and benefits should be determined following a review of salary schedules for members of other professional groups. Reviews should be conducted within the community and, when feasible, within the early childhood program's larger organizational structure. 11

12 Although an institutional review may not be feasible for small independent programs, it has proven to be an effective tool for improving compensation in many programs associated with a larger institution. The institutional review is an internal review, considering salaries and benefits provided to individuals with similar preparation and responsibilities. For example, a community service organization may compare the salaries and benefits of its early childhood teaching staff to its social workers with equivalent preparation and responsibility. A public school would examine the comparability of responsibilities and preparation and corresponding compensation for teachers in its prekindergarten and kindergarten programs to secondary teachers. The compensation of a program administrator in an organization such as a hospital, industry, or educational institution would be compared to the compensation package of heads of other programs or departments of similar size within that institution. The community review, possible for all programs, should begin by considering professionals with similar responsibilities. The job responsibilities of early childhood professionals are most comparable to those of other educational professionals in elementary and secondary schools. The community review should also take into account other professionals in the community. These may include nurses, social workers, and counselors as well as others. Many of the social services share with the early childhood profession in the undervaluing of their work; broader comparability to more equitably paid professions should be the long-term goal. It should be noted that family child care providers are typically not salaried employees, but are self-employed with income based on fees for service. Community reviews may provide useful information for family child care providers when determining fees. Fees should be based on the full cost of providing a high-quality service and include sufficient compensation for the level of professional preparation. Compensation should not be differentiated on the basis of the ages of children served. Assuming equivalent professional preparation and equivalent job responsibilities, early childhood professionals working with young children should receive compensation comparable to professionals working with older children. Typically, the younger the child, the lesser the value placed on the service provided. Yet, children are most vulnerable in their early years, and the impact of their early experiences on later development and learning is the most profound. Compensation provided to individuals working with young children should reflect the importance of their work. Early childhood professional should be encouraged to seek additional professional preparation and should be rewarded accordingly. Currently there is little incentive for early childhood personnel to seek additional training. Despite the lack of public understanding as to its importance, specialized knowledge of how 12

13 young children develop and learn is the key predictor of how well early childhood personnel are able to implement a developmentally appropriate program (Bredekamp, 1989). Even when individuals understand the importance of professional development for improving the quality of early childhood services, access to continuing education is often denied due to a lack of resources. The current crisis in recruiting and retaining qualified staff has resulted in many programs employing individuals who are underqualified for their roles and responsibilities. The provision of in-service training is especially critical in these situations so that children receive the quality of care they need. When the acquisition of additional preparation is not rewarded, there is little incentive for these individuals to remain on the job and the investment made in their in-service training is lost. The provision of an adequate benefits package is a crucial component of compensation for early childhood staff. Early childhood personnel who are satisfied with their jobs and whose individual and family members' health is protected are more likely to convey positive feelings toward children, are more able to give utmost attention to teaching and caring for children, and are more likely to remain in their positions for longer periods of time. Benefits packages for full-time staff may be negotiated to meet individual staff members' needs but should include paid leave (annual, sick, and/or personal), medical insurance, and retirement, and may provide educational benefits, subsidized child care, or other options unique to the situation. Benefits for part-time staff should be provided on a prorated bases. (Students or others who are placed on the job on a temporary basis for job training are excluded from this provision). Career ladders should be established, providing additional increments in salary based on performance and participation in professional development opportunities. Individuals who work directly with young children should be able to envision a future in this work. Too often, the only opportunity for advancement in early childhood programs requires leaving direct work with children. Career ladders that offer opportunities for advancement through merit increases and recognition of higher levels of preparation and mastery of practice promote higher quality services for children. References Bredekamp, S. (1989). Regulating child care quality: Evidence from NAEYC's accreditation system. Washington, DC: NAEYC Mitchell, A. & Modigliani, K. (1989). Public policy report. Young children in the public schools: The "only ifs" reconsidered. Young Children, 44, (6),

14 U.S. Bureau of Labor Statistics Current Population Survey, unpublished analyses. Washington, DC. U.S. General Accounting Office, (1989). Early childhood education: Information on costs and services at high quality centers. Washington, DC: Author. Whitebook, M., Howes, C., & Phillips, D. (1989). Who cares? Child care teachers and the quality of care in America. Executive summary of the National Child Care Staffing Study. Oakland, CA: Child Care Employee Project. This document is an official position statement of the National Association for the Education of Young Children 14