Define Financially Secure

[MomToEli]

I am our new Troop CC. We have not had a particularly well oiled, functioning Committee for the past few years, which has left a whole lot to be reviewed and procedures and policies to be put into place. Mostly on the communication front, but all things are being reviewed.

 

The thread about Troop finances has raised a question for me. What, exactly, is considered financially sound? What should be our "cushion"? I know some units spend themselves into poverty every year, and others bank far more than any unit needs. There is a balance in there some place.

 

So - what does your unit consider "financially secure" to be?

[packsaddle]

This unit defines it by having enough in the bank (or pledged) in order to cover current and anticipated expenses.

[MomToEli]

For what period of time? Next month? The next year?

[John-in-KC]

Financially secure, to me means the unit has enough money on hand to meet the next major payment:

- Recharter

- Camp payments

- Courts of Honor

 

- Capital reserve fund for FWT replacement of equipment (tents do wear out)...

 

It also means the Scouts, and their parents, understand when they have to help with fundraising, or else pay dues and fees on time.

[Twocubdad]

I don't know anyone else can answer that for your unit. I think the question is more philosophical than financial. It's sort of like defining tailgating. It depends on how fast you want to go, how good your reflexes are and what level of risk you're willing to accept.

 

When I was Cubmaster we averaged about 100 boys, had a huge budget and sold $25-30,000 in popcorn every year. I always worried we were one disorganized Popcorn Colonel away from being broke. Consequently, I felt like an ongoing balance of $3-5,000 was a good cushion and would give the pack time to figure things out if we had a weak popcorn season.

 

On the other hand, a lot of packs feel the money earned by this year's Scouts should be spent on this years Scouts and will spend the budget down to zero every year. I don't have the nerves or financial acumen for that. That approach requires folks who really stay on top of the finances and can very quickly slam on the brakes when necessary.

 

You need figure our were you are on that scale.

[Beavah]

I like John-in-KC's notion, eh?

 

I think any troop that has its own gear needs to budget for depreciation of the gear. Buy a tent for $250? Then yeh have to budget $50 a year for replacement of that tent in 5 years (or $25 in ten, etc.). Don't be optimistic about tent lifetime, eh? Yeh have to take into account kid-use and stuff getting lost. Own 10 tents? then $500 a year goes into the bank as the tent reserve fund (or goes to buying two tents this year, setting up a rotating replacement).

 

In terms of operatin' fund reserves, I'd say plan on your biggest fundraiser each year gettin' clobbered. The pancake breakfast building burns down, there's a scare about bedbugs in Trails End popcorn, your trailer gets stolen and yeh have to rent/buy some new gear on a short-term basis, whatever. Have enough to weather one such disaster.

 

Beyond that, it's a more strategic question, eh? Are yeh doin' all you should be doing? Should you support youth with more camperships? Are yeh seeing good lads "avoid" higher-cost outings? Will some added adult training funds help yeh move to a new level? If yeh make an investment in backpacking gear, will that expand your troop's program?

 

Beavah

 

[Gunny2862]

I agree with John and Beavah on this.

But cautionary that I am, In my perfect world there would be a years reserve of all costs in addition to what John and Beavah lay out. But that is just my humble opinion.

In reality, we hold enough funds to cover the outlay of our Annual fundraiser, Scout Accounts and about what it cost to run this years program - I'd sure like to have some margin though.

[JerseyScout]

It depends what you'er comfortable with. I like to have about $2000 in the acounts at any given time. We've gone as low as $1500 and, at one point years ago, were at almost $10,000 (which was too much). Do what you need to do.

[Pack212Scouter]

It really depends on how the unit feels. My personal feeling align pretty closely with what our unit does. We set Scout dues based on the next year's anticipated expenses. We use Scout accounts, so the little that the unit keeps goes to any additional overhead, the remainder usually gets spent on community service projects. We actually seperate the account into several sub-accounts so that the money's purpose is more obvious. Our general fund carries enough in the account to cover awards and expenses until the next fall; we have a Scout account account; we have a recharter account where those funds are seperated out immediately for the next recharter; we have a scholarship account; and we have a capital expense account. The scholarship account usually stays as heavily funded as we can keep it (We spent $1400 out of it this year, so we are now keeping it as close to $3000 as possible). Additionally, the capital expense account grows every year until those expenditures are done. The biggest thing that you might want to consider is that you don't want to spend down to the last cent. Our unit did that once many years ago and almost got shut down by our CO. You should carry enough over your estimated expenses to cover any potential shortfalls. You could have to replace non-unit equipment damaged by accident or you could incur an unplanned expense such as the additional $5 per Scout that BSA thew on at recharter last spring.

[John-in-KC]

To me it's about stewardship. I've seen organization that had too much reserve funds ... not necessarily Scouting, but non-profits. Those funds were donated to an arm of a charitable organization ... make no doubt, popcorn is charity. There's a huge donation element in its pricing.

 

Dollars donated to charity need to be working, not parked.

 

Now, what Gunny and Beavah said makes sense: Have a contingency amount to cover the big fundraiser crashing and burning. I've seen units have that cushion, I've seen others run not quite paycheck to paycheck.

 

One thing I caution: The Chartered Partner is the franchise holder/licensee/charteree of record of a Scout unit (Pack, Troop, Team or Crew). We had a case on this board where a Partner, in dire fiscal straits, asserted their rights and pulled funds to underwrite themselves. Not Helpful, but it happened. It's a very good reason to keep the reserves a bit lean, though.

 

[evmori]

Can your unit bank account cover the unit's expenses? If so, secure.

[qwazse]

Add to this: if fundraising is not meeting budget, cut the budget, which in effect offloads expenses on youth.

 

When are crew started there was a lot of hypothetical "fretting" that we would be a burden on the troop treasury. So, we started our own treasury with the money garnered from the "complimentary" leaders' lift tickets. There've been a couple cash donations here and there as well.

 

The youth turned their noses up to fundraising. I know parents that tried to encourage it, but lacking a youth willing to head it up, I asked the parents to stand down. Turns out, 14-20 year olds are pretty good at finding "real world" jobs for the things they deem important. They buy, beg, or borrow the equipment they need.

 

So we have enough margin to provide seed money for a small project (e.g. printing uniform t-shirts to sell later), and are collecting for the next high adventure from those participating. Besides that, we run lean. No scholarship funds, etc...

 

This strategy is secure in the sense that we've got the usual expenses covered for a year or so. The trade-off is some kids don't have a strategy for setting aside funds. A couple have "priced themselves out" of the next superactivity.