AORE Budgeting
Performance Based Budgeting
AORE uses Performance Based Budgeting in the development of the annual operating budget.
A Performance Budget is a budget that reflects the input of resources and the output of services for each unit of an organization. For example, if AORE determined that increasing charitable giving could be achieved through a letter writing campaign, a Performance Budget would be build to include the costs of stamps, printing, envelopes, and staff time needed to achieve this outcome. Performance based budgeting can help maximize the use of limited resources by creating performance measures that connect budgetary facts to decision making. In a mission-driven organization like AORE, this method of budgeting helps integrate the values of the Association with management and operational and financial accountability. To be effective, a performance budget begins with specific and measurable outcome goals.
A Performance Budget begins with a thorough understanding of the mission statement - the
AORE’s basic purpose and primary reason for existence. The Board identifies priorities that
support the execution of the mission. This allows AORE to set clear organization and program
goals, make sure that current and proposed programs and activities are appropriate, focus
resources productively, determine the specific activities and expenditure that should be
maintained and the ones that should be reduced or eliminated.
Budget Development Process
In 2016, the AORE adopted a Budget Development Process and Timeline to provide clarity and
guidance for how budgets are created, vetted, and approved. This process allows for efficiency
and accuracy in budget development and approval to ensure that committees and staff know
what the AORE’s priorities are and what programs and initiatives will be funded so work can
continue uninterrupted.
AORE’s Budget Development Process includes the following benchmarks:
1. The Board of Directors develops and approves the following fiscal year’s objectives and
priorities
2. Committees work with the Executive Director and President to plan the committee work
that will support the defined objectives and priorities
3. Committees provide information about the budgetary implications and financial support
needed to carry out the work
4. Staff review current year’s income and expense and forecast to the end of the fiscal year
5. Accounting for all of the input and operationalizing the Board’s defined objectives and
priorities, the Executive Director prepares a draft budget
6. The Executive Director and Treasurer meet to discuss budget draft and make revisions
7. The revised draft budget is sent to the FAC for a review and discussion
8. The Executive Director prepared a Final Budget Proposal and submits it to the Board of
Directors to review
9. The Board of Directors meets to discuss the budget and vote to approve the Final Budget
The Structure of AORE’s Finances
Much like the way a person maintains a checking account, a savings account, and an
investment account such as a 401 k to meet different financial needs and goals, the AORE
maintains three separate funds. Doing so ensures that the AORE is financially sound today and
will remain so in the future. AORE maintains and investment policy that defines investment
objectives and guidelines. The Financial Advisory Committee reviews and monitors this policy
and the Executive Director provides reporting to the Board of Directors.