Respond to at least two of your classmates’ posts in substantive responses no less than 80 words per response with attention to current realities and applications. I need 50 words each on Ques 1 & 2
Week 3 – Discussion response 1
Question 1: As you think about what Yuan et al. (2018) presented about emissions permits trading and production, how does that relate to practice in human service contexts? How does the use of fixed and variable costs in nonprofits or other general human service organizations differ from a context focused on emissions permits trading and production? How are the two similar in terms of fixed and variable costs?
Forum 1: Fixed and variable costs are different in a major way because the fixed costs are expenses that are the same for a long time without ever-changing. For example, paying your rent, job salaries, and applying for loans from a bank. Tuition for school, “Fixed Cost are ones that don’t change with the volume of a sale” (McCarthy, J., [goldstarjimmccarthy]. (2010, With the variable cost focuses on the business that you are trying to make successful, and how the performance of the business outcome looks once everything is settled. “Variable costs are ones that change with the volume of the sale” (McCarthy, J., [goldstarjimmccarthy]. (2010, This means that pieces change for all types of things you are going to purchase. For example, clothes, food, electronics, cars, or anything else you are willing to purchase. Most of the time businesses tend to change the price of things because they feel they will sell faster, or they could make a profit from what they sell. Having a set budget to keep track of your expenses is important because you will know what you spent each time for a set period. Operating budgets are something that is useful and will guide you in the right direction without stressing about your finances. “Operating budget includes anticipated income by source and amount” (Dropkin, M., Halpin, J., & LaTouche, B. (2007).
I believe that I would rather have more of the fixed because everything will stay the same and nothing will change because it is set already for you. With fixed you can stay on a budget and you will be able to manage your money the right way without any problems approaching. For example, paying for your car every month stays the same, having an advertisement for your business, and the salaries of the employees.
Dropkin, M., Halpin, J., & LaTouche, B. (2007). The budget-building book for nonprofits (2nd ed.). Jossey-Bass.
McCarthy, J., [goldstarjimmccarthy]. (2010, September 1). Difference Between Fixed and Variable Costs – Quick Draw with Jim McCarthy, Goldstar CEO [Video File]. Retrieved from https://youtu.be/wBBfA9q8FSQ (Links to an external site.) (Links to an external site.)
Forum 2: Fixed costs are items that you can count on to cost the same throughout the year (Byerly, 2020). Items like rent, salary employees, insurance, and business loans would all be considered fixed costs. It is good to know how much these items are going to cost, and you can plan for them.
Variable costs are the items that fluctuate in price throughout the year. They may cost more or less, depending on the time of year, or what you are buying or making (Byerly, 2020). Items like office products, hourly employees, electric and gas, food, and other operating expenses would be considered variable costs. You know your company needs these items, and you need to plan for the expense, but these items change in price all the time. Depending when you need the items, they may be on sale. Electric and gas prices change all the time. For hourly employees, that can change as well. They may work different amounts of hours and overtime as well. You can budget for 40 hours for each full time employee, but that can change also if they are sick or end up working late or going home early. If we are working for a nonprofit the costs of fundraising would also fall under the variable cost or indirect costs (Propel Nonprofits, 2021).
For me personally, I would prefer the fixed costs over the variable costs. Most of the bills that I pay are fixed cost like the phone bill, car payment, rent, cable and internet. I know how much they are and plan for them. For variable costs it is a little harder to do. The electric and gas bill change monthly depending on the time of year. Food and other supplies are also hard to plan for, because you do not buy the same things all the time. You can guess how much they are going to be by previous months spending and plan for them that way but your costs are going to fluctuate during different times of the year.
Byerly, N. (2020, July 31). Difference between fixed and variable expenses: Why it matters. [Video]. YouTube. https://www.youtube.com/watch?v=iUe_T8ufr-A
Propel Nonprofits. (2021). True program costs: Program budget and allocation template and resource. https://www.propelnonprofits.org/resources/true-program-costs-program-budget-allocation-template-resource/
Week 3 – Discussion response 2
Question 2: In what type(s) of situation(s) might financial stability be okay rather than always being in a growth phase?
Forum 1:I would justify using a flexible expense rather than a fixed one by first drawing up my kept documents of price and cost of what has gone out as a needed expense for a length of time, let’s say a whole month. And I will compare and contrast the price from week to week with the expenses and also try to guestimate it depending on reliable resources for example if I am renting a space and that price goes up or down then I will need to include that and also all of my employees will get raises based on their qualifications and performance. If some of my employees work overtime, If I decide to add to my daycare then I will need to include that until that project is completed. I don’t see the expense ready to be steady and fixed for the beginning years of building up the business with new comings that may have to come and go for whatever reason along with not knowing 100% what will need to go up as an expense. I feel that I could possibly change it later if need be but for the first year or so I will use a variable expense until I have a fact sheet of what to expect and that it’s dependable. If the board rejects my request for a variable budget then I will ask for a meeting and show them with a line budget and some of the unpredictable changes that can occur without warning for example if I had to pay more employees because of the center growing and if minimum wage goes up then I have to adjust as well. Sometimes on baby items, there’s such a close call on recall on things like baby beds, walkers, toys, car seats on what’s safe and meets regulations. Things like that can change overnight. A flexible spending account can help you save more tax than only claiming credit. I will tell them that flexible spending accounts have benefits that my center and I can utilize such as “pre‐tax earnings that would make me eligible medical expenses” (Leight & Wilson, 2020, p. 195). I can give back to the community with such a positive value. Another thing I like to mention is how having a flexible spending account will allow you to pay some medical expenses out of pocket and have a benefit that will carry over (Menton, 2020, Dec 03).
Leight, J., & Wilson, N. (2020). Framing Flexible Spending Accounts: A Large-Scale Field Experiment on Communicating the Return on Medical Savings Accounts. Health Economics, 29(2), 195–208.
Menton, J. (2020, Dec 03). FSA funds might be carried over. Usa Today Retrieved from https://www-proquest-com.proxy-library.ashford.edu/newspapers/fsa-funds-might-be-carried-over/docview/2466189641/se-2?accountid=32521
Forum 2: I would justify fixed and flexible expenses budget to a grant funding agency by putting together a budget plan that will benefit the program I want to do and give them a description of what the program will entail. Doing this will show the investors or Stakeholders how much they will be spending with the budget grants and the necessary cost of the program that will benefit the nonprofit organization. “The federal government could help distressed areas by providing economic development grants” (Bartik, T. (2020). Nonprofit organizations tend to be a business entity that is utilized socially or public that will make a profit for its Stakeholders, Board of Directors, or anyone else that is involved. A grant funding agency gathers information that they have researched to see what is the best financial grants that work with them whether both fixed or flexible. Nonprofit organizations, tend to have incentives for those that will be a part of the program. The only way that the fixed and flexible would be to utilize the expenses is by allocating the funds of the grants that will be available for the nonprofit organization.
Make sure that all parties involved are in agreement with the process of the plan that is going to take place. This will happen for any negotiation strategy when it comes to putting a plan together that will be successful for the nonprofit organization. I would give each individual an outline of the strategy I am going for, and give them the chance to share their opinion on the strategy to see if everyone agrees or doesn’t agree. If there was some conflict that occurred within the nonprofit organization agency I would recommend bringing in an individual who deals with conflict resolution due to everyone not being on the same page and not wanting to accept the initial justification of the actual fixed or flexible expenses of the program. Have a meeting with the grant funding agency individuals who are causing the conflict resolution to see if the issues can be resolved before calling an expert to diffuse the situation. Another negotiation would be providing the actual plan you want to put into motion so that they will get a feel of what to expect from it.
Bartik, T. (2020). Using Place-Based Jobs Policies to Help Distressed Communities. The Journal of Economic Perspectives, 34(3), 99-127. Retrieved April 22, 2021, from https://www.jstor.org/stable/26923543
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