Justifying Budget Loss
Not every operating budget must show a profit. For example, there are many examples of successful mental health and other health related programs that are referred to as “lost leader” programs because they show a loss. This is common with grant funded programs, or benevolent foundation funding. Discuss how you would continue to justify a budget loss to a board of directors or grant funding agency. What negotiation or conflict resolution strategy would you recommend if the board or agency does not accept the initial justification? Your initial post should be at least 400 words.
Dropkin, M., Halpin, J., & LaTouche, B. (2007). The budget-building book for nonprofits (2nd ed.). Jossey-Bass.
Chapter 15: Estimating Income and Expenses
Final budget for fiscal year 2006 changes Medicaid and Medicare rules, cuts funds for mental health programs. (2006). Psychiatric Services, 57(3), 432-3.
Roberts, P, [eHow]. (2008, November 1). Business Advice: How to Determine Profit [Video File]. Retrieved from https://youtu.be/4Z4HK2uctQE (Links to an external site.)
Hornor, J, [eHow]. (2009, May 26). Small Business Basics : How to Understand a Profit-Loss Statement [Video File]. Retrieved from https://youtu.be/1gI25MuIXkw (Links to an external site.)