Journey Drop In Center Case Summary
Case Study Three
The Journey Drop-in Center was established with the major support of church parishioners in the cash donations and the fund from fund-raising activities at the church. Regarding $270,000 endowment fund raised by the campaign, the Journey Center should not touch to recall the kids who are hanging out at the local coffee shop for the free WiFi because these endowment funds are to generate $ 1 million over time. Sue Shirey, a Journey Center board member and parishioner at the church, mentions that these funds were going to be set aside until it reached $ 1 million. Worth (2017) asserts that Many endowments are funds that are not intended to be spent—ever. The investment income that they generate may be expended for current operating …show more content…
(p. 326)
So, the endowment funds require the governing board to identify allowable ranges for specific financial indicators or ratios so that fundraising and other areas of activity can be presented to the donors and stakeholders.
After using $100,000 for the infrastructure, the Journey Center proposed another $50,000 for a music program instead of diversifying the revenue to pay back the endowment. Furthermore, the Journey Center should try to reduce the negative impact of spending down the endowment by generating sufficient and reliable revenue to meet their short-term operating costs and long-term capital needs including philanthropic giving, earned income, government grants, and contracts.
In the Journey Center’s case, the board spent $100,000 for the infrastructure and then they proposed to withdraw another $50,000 for a music program without mitigation the negative response to spending down the endowment. As those funds are restricted until such a time that the work has been completed and the revenue actually earned, the board should prepare the response for the financial implications and risk management. Risk management requires identifying scenarios that could negatively impact the organization and then devising policies and controls to either prevent those events from occurring to provide financial protection to the organization if one does occur (Worth, 2017, p.
The Journey Drop-in Center was established with the major support of church parishioners in the cash donations and the fund from fund-raising activities at the church. Regarding $270,000 endowment fund raised by the campaign, the Journey Center should not touch to recall the kids who are hanging out at the local coffee shop for the free WiFi because these endowment funds are to generate $ 1 million over time. Sue Shirey, a Journey Center board member and parishioner at the church, mentions that these funds were going to be set aside until it reached $ 1 million. Worth (2017) asserts that Many endowments are funds that are not intended to be spent—ever. The investment income that they generate may be expended for current operating …show more content…
(p. 326)
So, the endowment funds require the governing board to identify allowable ranges for specific financial indicators or ratios so that fundraising and other areas of activity can be presented to the donors and stakeholders.
After using $100,000 for the infrastructure, the Journey Center proposed another $50,000 for a music program instead of diversifying the revenue to pay back the endowment. Furthermore, the Journey Center should try to reduce the negative impact of spending down the endowment by generating sufficient and reliable revenue to meet their short-term operating costs and long-term capital needs including philanthropic giving, earned income, government grants, and contracts.
In the Journey Center’s case, the board spent $100,000 for the infrastructure and then they proposed to withdraw another $50,000 for a music program without mitigation the negative response to spending down the endowment. As those funds are restricted until such a time that the work has been completed and the revenue actually earned, the board should prepare the response for the financial implications and risk management. Risk management requires identifying scenarios that could negatively impact the organization and then devising policies and controls to either prevent those events from occurring to provide financial protection to the organization if one does occur (Worth, 2017, p.