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Acquiring and Managing Financial Resources.

Just as there are several organizational models for delivering extension services to the public, there are a number of ways to finance those services and to keep track of the money. …..(0)….B…. Poor financial management, on the other hand, often accompanies and contributes to failure.

The major financial concerns of an extension organization can be described rather simply:

· Extension organizations have too few financial resources, given the nature and size of their missions.

· Managers and other staff members do not know and apparently cannot find out how many resources are available for use in dealing with a particular problem or program activity.

· They do not know the costs of carrying out various activities or whether a particular approach is a cost-effective way to deliver programming.

· Money may be committed almost totally to salaries, leaving little to cover operating costs.

· Financial allocation decisions are made by people who are not in a position to know best how the money should be spent.

· Little is known about whether work is being carried out efficiently or what has been the impact of organization programs.

· Financial resources are wasted.

· Resources are misappropriated.

Most of what can go wrong in an extension organization when it comes to money is covered by one or more of the above problems. ……… (1)……..But more money may not always result in greater impact if the money is not well managed.

There may be little connection between quality of program delivery and an organization's system for managing money. A specialist's message getting through to a farmer does not totally depend on how much money is spent on the process. However, organizations that are effective tend to know how their money is being spent. A case can easily be made that sound financial management is the first step toward quality programming.

Obtaining financial resources. There is an almost universal reaction of managers when it comes to money, namely, they do not have enough of it. They need and want more.

Extension organizations are supported financially from a variety of sources. Publically funded organizations receive support from public appropriations; contracts with other agencies, donors, or both; loans; gifts; income from sales; user fees.

Private extension organizations are financed by endowment income; private investment; income-producing activities; the same sources as public extension organizations.

……(2)…… Currently, there is interest in some countries in "privatizing" some functions - that is, shifting certain responsibilities (and the costs associated with them) to privately funded enterprises (NGOs) or directly to users.

……. (3)……..Obviously, the more sources of funding, the more complicated administration is, because most funding sources have their own expectations of outcomes, reporting requirements, and timetables.

Despite administrative complexity, managers often find that having more than one source of funding is advantageous. Several sources provide a hedge against adverse treatment by a single funding partner or source. Special funding sources often help the organization to focus on emerging, high priority concerns or to test new approaches. A practical goal might be to have a resource commitment from the principal funding partner (the most dependable source of continuing funding) that will maintain the "core" or basic structure of the organization (e.g., selected staff salaries and other expenses). …….(4)……..Temporary resources permit experimentation and the carrying out of special projects.

No single ideal ratio of core to total support can be applied everywhere. This is partly because organizations will define what is part of the core and what is left for special or temporary support differently. As a general rule, managers might reasonably seek something like an 80-20 split (core to soft resources).

Keeping track of financial resources. The function of management is to plan, organize, staff, lead, and control. Every one of these functions is influenced to a great degree by how much money there is. Managers and program staff simply cannot carry out their assigned responsibilities effectively without understanding their financial constraints.

Managers need to have some means for knowing what is happening with respect to their financial resources if they are to make informed management decisions. The notion that leaders of extension organizations are accountable to funding partners is one of the reasons managers need to keep track of how money is spent. The organization will be expected to report how much money there was, how much was spent, what it was spent for, and how much is left.

This responsibility is carried out by installing and managing a financial accounting system. …….(5)…….But regardless of how reports are produced and records maintained, they should be accurate and produced in a timely fashion so that staff can base their decisions on good information. A number of acceptable computer software programs are available to meet this accounting need. It is generally unnecessary for most organizations to spend time and resources designing and implementing a unique system.