You Too Can Be Judas—-Finances 101

DRAFT OUTLINE
YOU TOO CAN BE JUDAS: Money and Finance
Cahoots Festival
May 31, 2013
Mennonite Silver Lake Camp

Introductions

I’m Brian Burch and I’ve served as a treasurer of a number of co-operative and non-profit organisations over the past several decades. I’m not an expert in finances—-I’m not an accountant or even a skilled bookkeeper. But I have a real interest in the stewardship of the resources trusted to groups I am a part of which has lead into my being involved in the financial management of most of the groups I have been a part of.

I’m curious as to why people are here. Could you go around and briefly introduce yourself and tell us what you hope to get from this workshop. I have a couple of areas I want to focus on, but I hope to leave time to touch on areas I’ve overlooked. I’m also prepared to go off in completely unexpected tangents if the group has different priorities and interests.

Agenda Review

I will be touching on two basic aspects of the financial life of an organisation—-financial statements that tell you about the life and priorities of an organisation; and budgeting, which is the setting of priorities on how to use the resources you are trusted with.

Before dealing with the practical content, let us touch on why I think financial literacy is important to an organisation and why I think that budgeting involves real ethical choices.

The gospels touch directly on making decisions on how to use resources—-the story of the anointment of Jesus.

New Testament Readings

Matthew 26:6-13 New International Version – UK (NIVUK)

While Jesus was in Bethany in the home of Simon the Leper, a woman came to him with an alabaster jar of very expensive perfume, which she poured on his head as he was reclining at the table.  When the disciples saw this, they were indignant. ‘Why this waste?’ they asked. ‘This perfume could have been sold at a high price and the money given to the poor.’  Aware of this, Jesus said to them, ‘Why are you bothering this woman? She has done a beautiful thing to me.  The poor you will always have with you, but you will not always have me. When she poured this perfume on my body, she did it to prepare me for burial. Truly I tell you, wherever this gospel is preached throughout the world, what she has done will also be told, in memory of her.’

Mark 14:3-9 New International Version – UK (NIVUK)

While he was in Bethany, reclining at the table in the home of Simon the Leper, a woman came with an alabaster jar of very expensive perfume, made of pure nard. She broke the jar and poured the perfume on his head.  Some of those present were saying indignantly to one another, ‘Why this waste of perfume?  It could have been sold for more than a year’s wages and the money given to the poor.’ And they rebuked her harshly.  ‘Leave her alone,’ said Jesus. ‘Why are you bothering her? She has done a beautiful thing to me.  The poor you will always have with you, and you can help them any time you want. But you will not always have me.  She did what she could. She poured perfume on my body beforehand to prepare for my burial.  Truly I tell you, wherever the gospel is preached throughout the world, what she has done will also be told, in memory of her.’

John 12:1-8 New International Version – UK (NIVUK)

Six days before the Passover, Jesus came to Bethany, where Lazarus lived, whom Jesus had raised from the dead.  Here a dinner was given in Jesus’ honour. Martha served, while Lazarus was among those reclining at the table with him. Then Mary took about half a litre of pure nard, an expensive perfume; she poured it on Jesus’ feet and wiped his feet with her hair. And the house was filled with the fragrance of the perfume.  But one of his disciples, Judas Iscariot, who was later to betray him, objected,  ‘Why wasn’t this perfume sold and the money given to the poor? It was worth a year’s wages.’ He did not say this because he cared about the poor but because he was a thief; as keeper of the money bag, he used to help himself to what was put into it. ‘Leave her alone,’ Jesus replied. ‘It was intended that she should save this perfume for the day of my burial.  You will always have the poor among you,  but you will not always have me.’

Go Round—Question: What are the different values being expressed by Judas and Jesus.

I have come, over time, to side with Judas on this. In times of scare resources, the priority of compassionate solidarity should trump luxuries. In a conversation on Thursday it was suggested that the passages imply that giving money to the poor was the norm and Christ’s behaviour out of the ordinary.

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Basic Financial Statements: Overview of CoAction and 43rd statements.

There are two major different forms of financial statements—-balance statements (sometimes referred to as balance sheets) and income statements (sometimes referred to as statements of profit and loss). They serve two different purposes.

Balance statements are historical documents. They present the story of the financial life of an organisation from its beginning. Everything that the organisation has purchased, every expense the organisation has paid, every dollar received is woven into the statements.

Income statements are living documents. They compare what is expected to occur (the budget) with what actually happens (the actuals).

Inside the financial statements are the lived out values of an organisation. An organisation that states it has a priority to deal directly with the needs of people on the streets but has expensive office furniture included in its assets is showing something different in the statements than it projects to the world.

I’m providing financial statements for two co-operatives I’m involved with, one a small co-op that provides services to co-op staff, and the other a medium sized housing co-operative. These are taken from the audited financial statements so there is some confidence in the accuracy of the numbers.

-Balance Sheets (history of the assets)

Things to look at on a balance sheet include:

-Do the assets and liabilities match—if they don’t there is a problem that needs to be followed up.
-what types of assets are recorded?
-what are the natures of liabilities?

-Income Statements (current reality)

Things to look at on an income statement (statement of profit and loss) include:
-what are the budgeted categories?
-are both budget and actual financial figures included?
-is a surplus or deficit budgeted for?
-what is the difference between what is budgeted and what are the actual figures.

Basic Budgeting: Figuring out what you have, what you want to do and setting priorities.

Generally accepted principles: (http://www.nonprofitworks.com/downloads/)
1. A budget is a plan for expenses (costs) and revenue (where money will come from)
2. As plans change, so should a budget – with respect to the agency’s budget modification procedures
3. Revenue and expenses should balance
4. Rely upon past budget performance and finance figures
5. When creating a budget, typically it’s recommended to start with expenses, then revenue
6. Give the most attention to identifying and accounting for regular expenses – staff salaries and benefits, rent and utilities, insurance, travel, training
7. Cost-sharing among programs should be fair and consistent
8. Pro-rate and appropriate expenses fairly to “program” or “administration” whenever possible to avoid appearing “top heavy”

Every group I am a part of has resources that are not sufficient to address everything that people would like. St. Clare’s, for example, has to balance out the desire to provide internal subsidies for people and the need to deal with maintenance problems with aging buildings. The members of Ganesh need to contribute a portion of our earnings to meet the organizational overhead, which can have a real impact on our take home pay if there is an unexpected HST adjustment or some substantive payments from one or two clients haven’t arrived. Some donors have priorities that are different that the group’s—do you turn down funds or change priorities?

There is a budgeting exercise that I’d like people to do in small groups—groups of four would be ideal. In dealing with the budget consider the values of the group you are preparing it for. I’m going to ask the groups to report back with their proposed budget and reasons for the allocations.

You have $1000 to spend. You have to spend at least 10% on space; at least 20% on salaries. You have traditionally spent 50% on programmes and activities. You may need to buy a computer next year, which would take 25% of your resources. There are rumours that you may get a large donation. There are rumours that you may have to move. How would you develop your budget? What would it look like?

Q & A

Money is a difficult area for many people to talk about. Are there areas I’ve overlooked that we should touch on while we are together?

One quick thought—if the numbers seem too large to grasp, drop the zeros.  $1.80 is easier to work with than $1,800,000.   As long as you treat all numbers the same, you may find that you can understand the process of budgetting and understanding financial statements a little easier.   The zeros can always be added back for more formal reports.

Evaluation

While there is a more formal feedback process, I do try to get some feedback whenever I do a workshop. I have an evaluation form for those that would like to help improve my presentations in the future. You can also drop me an email at burch@web.ca.

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