Chapter 6: Funding the Program

Community resources

be careful using what?

invisible line

the director must be careful to avoid crossing what?

1. center enrollment report 2. accounts receivable 3. budget comparison report 4. statement of financial position 5. income statement 6. annual report

the director prepares or oversees the preparation of 6 types of report

break-even chart

the director projects the income based on the enrollment. She then looks for the points at which the total costs meet the income and checks to see at what enrollment levels that occurs

fixed costs

Costs that will remain at the same level, regardless of enrollment; ex: rent, utilities, and director's salary

1. State verbally and in writing when payment is due and how it can be made 2. establish procedures regarding the timing, method, and number of overdue reminders and whether a penalty will be charged for late payment 3. consider a plan for accepting partial payment when a family is hit with a crisis

It is not uncommon for a family to have difficulty paying bills. Center policies and procedures, such as the following, must be explained clearly and agreed to during the enrollment procedures.

business

Lenders, suppliers, inspectors, insurers are interested in what?

objective and ethical stance

The director must maintain what?

3% to 8%

The program will not always be fully enrolled; therefore, the budget should have at least what percent vacancy rate built in

the state and has IRS exemption

before beginning any fund-raising program, the board and director must make sure that the center has been formally chartered by whom?

fund-raising program

before beginning what, the board and director must make sure that the center has been formally chartered by the state and has IRS exemption

fraud

clear policies and procedures must be in place to protect against what?

break-even analysis

how many children and what tuition rate will be needed to offset costs

small businesses

huge amounts of money are embezzled each year, and a large percentage of that occurs where?

break-even chart

in determining the amount of funds needed what is useful

regular operating funds become available

it takes a considerable amount of money to start a program, and it is important to make careful calculations to ensure that the start-up money is adequate to cover the costs until when?

balance

it will be necessary to do what to the number of children to be enrolled, the amount of tuition their families can reasonably be expected to pay, and the amount of money needed to operate the program

money

keep in mind that what is needed to meet your budget and that some families will fail to pay when their children leave the center

start-up capital

the money that must be available before the center is opened and for some time thereafter to support the initial program operation until the flow of tuition and other funds is sufficient to support the ongoing program

1. the amount needed to meet professional commitments to staff 2. the amount that is reasonable in terms of the type of program offered to families 3. the amount charged by comparable centers in the area

the tuition rate should be based on what 3 facts

variable costs

these are the costs for operating the program that change as enrollment increases or decreases. Ex: when four or five children are added, the cook probably orders more food, more art materials are needed, and so forth

Foundation

what are sometimes made available to child care centers for major equipment purchases or for a special project. Occasionally, it will provide funds for building or remodeling a facility or for training staff

how many children you need to enroll

what do you want to know in order to break even financially as well as to make a profit or provide some funds for future initiatives

foundation

what is a fund administered by trustees and operated under state or federal charter

inform the parents that the child may not attend the center program until all past due payments have been made and that the child will be remitted only if the space has not been filled

what is one of the most difficult tasks a director face?

operating funds

what must include all the regular budget items needed in the day-to-day operation of the center

Operating funds

what refers to the amount needed to run the center after it is open for business

Parents financial information

what should never be turned over to the classroom teacher. In fact, neither the teacher nor any of the other staff need to have this confidential information.

directors

who must have financial knowledge and understanding