Mammano and Tyson’s article, "Developing an Operating Budget for Extended Family, Inc.: A Not-for-Profit Human Service Organization" exposes most of the real world issues that many not-for-profit financial managers experience while preparing an operating budget. These setbacks…
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The organization in question known as Extended Family was formed in 1995 by parents who came together due to their concern for their children. Their children were facing stigma as a result of their disabilities. The parents wished their disabled children had independent, supervised, living situations. In addition, the organization was formed with the intention of educating the communities on the dynamics of disabilities, as well as to provide a safe living environment that may enable individuals with disabilities live with dignity.
In order to achieve its missions and ensure that Extended Family, Inc. operations are successful, it operates three distinct programs: education, counseling, and residential. Individuals entering these programs may be referred by their social services agencies, schools, parents, or their physicians (Mammano & Tyson, 2008). These programs have varied functions, and they are all geared to ensure that the disabled children’s lives are improved for the better. For instance, the counseling program offers individuals, family and group counseling sessions. The sessions are tailored towards the needs of every individual. On the other hand, education program provides disabled students with learning opportunities. Lastly, the residential program provides 24-hour care to disabled children, and teaches them life skills such as shopping, so that they may live independently.
The Extended Family has a budget that ensures that the funds they obtain from donors are used efficiently. For this reason, its employees have been made aware that revenues and expenses are accurately allocated to the administration and program costs. The Director of Administration is charged with the responsibility of drafting an operating budget which he submits to the agencies that provide funds to the organization (Mammano & Tyson, 2008). These financial reports should have the administration expenses falling below the program expenses so that a significant amount
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