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Week 4 - Assignment

Projected Profit/Loss

Add to Parts 1-3 of your Organization Wide Operating Budget by identifying the Projected Profit/Loss for Year 1. This will require you to project actual revenue based on your projected revenue sources. Treatment codes (known as CPT codes) are used to define the type of treatment. Individual Psychotherapy 20-30 minutes is code 90804; 45-50 minutes is 90806, 75-80 minutes is 90808; Family Therapy is 90847; Group Therapy is 90853. Other common codes are listed on the recommended materials website pdf file #4. While there are significant differences in payment for each treatment code based on the payer source (Medicare/Medicare is generally the lowest payer source so this website listed on recommended materials #3 will generate your bottom line revenue projection); there are also significant differences in payment by licensure type, degree (masters vs. doctorate), state or urban/rural geographic location. Assume that traditional insurance like Blue Cross/Blue Shield will reimburse ~30-40% more than Medicare/Medicaid. Managed care and other payer sources will be somewhere in between. Private pay and grant funded clientele are the easiest to predict as long as you have an accurate representation of how many clients will be served by these payer sources. Create a minimum (based on the lowest paying source for all clients) and optimum (based on what you think will happen with clientele’s payer sources) profit/loss projection based on subtracting the amount from your previous assignment’s conclusion of expenses. If you have a profit, determine if it is enough profit to justify your time/effort/educational investment/etc.? If you have a loss, where can you find additional income sources (i.e., fundraising events, charity sponsorship, partnerships with other related organizations, additional private or public grants) to make up for this loss and how feasible is this? At this point you should also consider any revisions to Parts 1-3 of your budget proposal with rationale for the changes. The recommended length of this assignment is 2-3 pages with reference support.

NOTE: Name of Organization: American Foundation for Suicide Prevention (AFSP) nonprofit organization

This assignment is the continuation of week 1,2,3 assignment

Resources

Readings

1. Textbook:   Dropkin, M., Halpin, J., & LaTouche, B. (2007).  The budget-building book for nonprofits  (2nd ed.). Jossey-Bass.           Chapter 15: Estimating Income and Expenses 2. Article:     Final budget for fiscal year 2006 changes Medicaid and Medicare rules, cuts funds for mental health programs. (2006). Psychiatric Services, 57(3), 432-3. 3. Videos:     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.)

Recommended Readings 1. Website:     BlueCross BlueShield of Tennessee. (n.d.) Behavioral Health Specific Billing Guidelines. Retrieved from  http://www.bcbst.com/providers/behavioral_health/billing_guidelines.pdf (Links to an external site.)

Week 4 Instructor Guidance

Estimating Income and Expenses

In your readings this week, Dropkin, Halpin, and LaTouche (2007) discussed how to accomplish the challenging task of accurately predicting income and expenses in a nonprofit organization. The authors detail three steps to follow that make this process less complicated.  The authors provide answers to questions such as:        

1.) What best practices are used when estimating future income?

2.) How best are expenses estimated?  

3.) What should be included in the budget’s written summary?

Chapter 15 is the only chapter required for you to read in the textbook this week. It’s an extremely useful chapter- please read and review until you have a thorough understanding of the material presented. Even though it’s a short chapter, it has very important information for future nonprofit managers.

You have one article to read this week, which relates to changes in Medicaid and Medicare rules from 2006. These changes significantly impacted access to care and continue to impact service provision today. This is another article that helps to provide justification for budget items. For example, this article could be referenced to support programs that provide financial assistance to obtain medications for low income families, or those that support and improve access to healthcare. As you continue to prepare your own budgets and corresponding justifications, consider similar articles that support your cause. Again, there are many resources that can be used to help support your organization’s mission. Also, consider how nonprofit leaders might have reacted to the proposed changes back in 2006. Specifically, for this course, nonprofit administrators would have had to adjust budget projections to take into account loss of revenue, as well as prepare for an increased need in services for those affected by the cuts. This article provides an excellent illustration of why it’s crucial for nonprofit leaders to stay abreast of upcoming policy changes. Budget changes, additional grant proposals, and loss of revenue all resulted from this change; consider how difficult it was to make financial predictions during this time!

You have two videos to view this week. Both of these provide useful information regarding how to create profit and loss statements. Hopefully, these topics will be easier to understand than previous topics. I find most folks understand the basic concepts of profit and loss easily. If questions do arise, though, please let me know!

Because Discussion Question #2 asks that you consider negotiation and/or conflict-resolution strategies when justifying your budget to board members, I thought it would be helpful to provide a few resources regarding conflict resolution. The links below discuss how best to apply conflict resolution strategies in the workplace. These are important skills for any administrator! I encourage you to add this information to your growing list of helpful resources.

http://www.mindtools.com/pages/article/newLDR_81.htm (Links to an external site.) Conflict Resolution: Resolving conflict rationally and effectively https://www.conovercompany.com/conflict-resolution-8-steps-for-resolving-conflicts/ (Links to an external site.) 8 Steps for Conflict Resolution https://www.mediate.com/articles/fordjbl20171201.cfm (Links to an external site.) How much is conflict costing your organization?

Grading Criteria

Content Criteria	5 Points
Content must be appropriately analyzed, summarized, compared/contrasted, and evaluated as applicable per the assignment directions including worksheets identified in the required text/CD.
Budget assignments are 2-3 pages in length and result in a cumulative budget project of 12-18 pages total.
Writing and Organization Criteria	2 Points
The central theme/purpose of the paper is clear.
The structure is clear, logical, and easy to follow.
The tone is appropriate to the content and assignment.
The thoughts are clear and include appropriate beginning, development, and conclusion.
Paragraph transitions are present, logical, and maintain the flow throughout the paper.
Sentences are complete, clear, and concise.
Sentences are well constructed, with consistently strong, varied sentences.
Sentence transitions are present and maintain the flow of thought.
Rules of grammar, usage, and punctuation are followed.
The paper uses words and language that are inclusive, clear, and unambiguous.
Spelling is correct.
Research Criteria	2 Points
The paper includes a summary and analysis of research materials that are relevant to the assignment, e.g. scholarly journals, professional articles, legal documents, government documents, legal decisions, media clips, software, measurement instruments websites, personal communication, etc.
Professional/scholarly journals are peer reviewed and focus on the profession/application of psychology (located on Proquest, EBSCOHost, PsycNET, etc.). Non-scholarly articles include newspapers, periodicals, secular magazines, etc, and are not peer reviewed. Websites not approved include wilkipedia.com and about.com.
Research focuses on the most current information (past five to ten years) except when citing seminal works (e.g. Freud, Erickson, etc.).
Paper includes the appropriate number of references required by the assignment.
When appropriate, the paper addresses ethical considerations in research.
Style Criteria	1 Point
The paper is in the appropriate APA format used by the institution/program (e.g. the 6th edition).
The paper is double-spaced and in the appropriate length required by the assignment
The paper includes an APA style cover page.
The paper includes an Abstract that is formatted to support the appropriate version of APA Publication Manual (e.g. 6th edition).
The paper properly uses headings, font styles, and white space as outlined in the appropriate version of APA Publication Manual (e.g. 6th edition).
The paper includes an introductory paragraph with a succinct thesis statement.
The paper addresses the topic of the paper with critical thought.
The paper concludes with a restatement of the thesis and a conclusion paragraph.
Citations of original works within the body of the paper follow the appropriate version of APA Publication Manual (e.g. 6th edition) guidelines.
The paper includes a References Page that is completed according to the appropriate version of APA Publication Manual (e.g. 6th edition).
Total Possible Points	10