Module 3 Assignment: Nonprofit Fundraising Budget

Departmental Budget

Melissa Carril

University of West Alabama

BA505 Funding for Profit/Nonprofit Organizations

Dr. Chris Thomason, CFRE

July 15, 2023

 Feeding America® is the largest hunger-relief Organization in the United States. Through

a network of more than 200 food banks, 21 statewide food bank associations, and over 60,000

partner agencies, food pantries, and meal programs, we helped provide 5.2 billion meals to

tens of millions of people in need last year. Feeding America also supports programs that

prevent food waste and improve food security among the people we serve, brings attention to

the social and systemic barriers that contribute to food insecurity in our nation, and advocates

for legislation protecting people from hunger. (About Us, n.d.)

"Feeding America shares concerns on several programs at the front of the fight for

hunger relief. Several programs are America's Harvest Box proposal in the president's fiscal year

2020 budget as well as hundreds of billions in cuts to federal nutrition program budgets,

including $220 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP) and $1.7

billion in cuts to child nutrition programs (Publication USA.gov, n.d.).

While these concerns exist, recognition and support from the government are activated.

Congress overwhelmingly passed, and the president signed the 2018 Farm Bill—bipartisan

legislation that maintained the proven structure of SNAP. Retailers, anti-hunger experts, and

economists agree that SNAP works to help people put food on the table while boosting local

economies (Action Alerts, 2018).

Feeding America Reports,

"While we await details on this year's specific proposal, we know that last year's budget

provisions would have partially replaced the efficient EBT program that allows SNAP
 participants to shop in their communities with an unworkable bureaucracy (Return,

2019)."

While developing The Departmental Budget (Budget), guidelines and concepts are taken

into consideration. Nonprofits need to spend money to raise money, explaining why the

fundraiser needs to be involved in the nonprofit's budget creation meetings.

The combination of direct costs (program expense) with office operations (indirect

costs) represents the accurate and complete Budget required for fundraising. Preparation of

the Budget for the year should be based on an analysis of prior years' expenses and individual

program results.

Feeding America was proactive at the first mention of the COVID-19 pandemic. The

preparation for the pandemic began when discussing the Budget, as shown in Table A1.

The supporting information to procure the data in Table A1 is taken from the Public

Disclosure Copy of Feeding America's 2020 990 IRS Tax Exempt Return. Section IX, shown in

Figure 1.

Some of the line items in the Budget are described in the following paragraphs.

Just like for-profit businesses, a nonprofit can deduct wages it pays to employees,

including holiday bonuses. For many organizations, this is one of the biggest — if

not the biggest — annual expenses. Note that wages must be reasonable for the services

performed. Also, know that nonprofits can be penalized for paying excessive compensation.

Although most not-for-profits do not pay volunteers or interns, some organizations pay

freelancers or contractors. As with wages paid to staffers, payments to independent

contractors are fully deductible if they are paid for legitimate services. Feeding America pays an

average salary of $120,150, and wages range from a low of $102,567 to a high of $140,543.

Individual salaries will, of course, vary depending on the job, department, and location, as well

as each employee's unique skills and education. According to the Auditor's Report, Notes to the

Financial Statements, the retirement plan has Feeding America providing a 401(k) defined

contribution plan (the Plan) for substantially all employees. In addition to employee

contributions, Feeding America contributes (3%) of each participant's compensation to the

Plan. Feeding America makes an additional matching contribution of 3 if the employee

contributes a minimum of 1% of their salary to the Plan. Total retirement expenses and

contributions made by Feeding America for the years ended June 30, 2020, and 2019 are

$1,688 and $1623, respectively, and are included in the Budget Worksheet (WSM, 2020).

In the for-profit world, marketing and advertising expenses can consume a large part of

a company's Budget. These expenses typically are not as consequential for nonprofits.

Nonprofits must get the word out about their mission, programs, and activities. Depending on

their nature, marketing, and advertising costs may be deducted.

Disaster Purchase and training expenses are incurred as employees obtain a

professional license to conduct their work. If a state regulates the licensing process, the cost

can be deducted. The same holds for continuing education credits. The cost of the training —

including books, supplies, supplementary materials, and outside instructors — is deductible.

Rental & Occupancy expenses include an operating lease for specific office space in

Chicago, Illinois, which commenced in January 2001. Feeding America has amended the
operating lease periodically to include additional office space, and the lease expires in

November 2020. In February 2020, Feeding America signed a new operating lease in Chicago for

its new headquarters. The initial term of the lease is 15 years, with a lease commencement date

of November 1, 2020, and a lease expiration date of October 31, 2035. The Organization may

occupy the space before November 1, 2020, at no additional cost other than electricity and

other variable expenses.

Feeding America also has an operating lease for certain space in Washington D.C. that

commenced on June 1, 2012, and expires in May 2023. In January 2018, Feeding America

entered into a sublease agreement with a third party, whereby the third party is leasing

Feeding America's office space through ay 2023. Subleases monthly payments started in July

2018 after a five-month rent abatement period. Additionally, in July 2017, Feeding America

entered into another lease agreement for new office space in Washington D.C. for an initial

term of 10 years and six months, expiring May 2028. After substantial renovation, Feeding

America began occupying the space in December 2017. Office lease annual cost is recorded on

the straight-line basis over the life of the respective leases.

Legal expenses are incurred as Feeding America, from time to time, is named in various

lawsuits arising in the ordinary course of business. Management is unaware of any asserted

lawsuits against Feeding America as of June 30, 2020 (WSM, 2020).

Table A1

FEEDING AMERICA
THE DEPARTMENTAL BUDGET WORKSHEET 2020
Figure 1

Feeding America 2020 990 Tax Return

Section IX- Statement of Functional Expenses
 References

About Us - Feeding America Action. https://feedingamericaaction.org/feeding-americas-vision/

Action Alerts. (2018). CNY Solidarity Coalition. https://www.cnysolidarity.org/2018/03/06/

action-alerts-week-of-march-5th/

Publications.USA.gov. https://pueblo.gpo.gov/SNAP_NEW/SNAP Pubs.php?PubID=

15566&PH PSESSID = 4ag6lm4clb2dns2o7g23rqd9r6

Return. (2019, March 11). Feeding America Statement on FY2020 Budget Proposal.

https://www.feedingamerica.org/about-us/press-room/feeding-america-statement-

fy2020-budget-proposal

WSM US, LLP. (2020). https://www.feedingamerica.org/sites/default/files/2021- 03/FINAL

%20Feeding%20America%202020%20FS.pdf