SPH-R 413: Fiscal Management for Leisure Services Organizations - Study Guide
SPH-R 413: Fiscal Management for Leisure Services Organizations - Study Guide SPH-R 413
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This 8 page Study Guide was uploaded by an elite notetaker on Tuesday November 11, 2014. The Study Guide belongs to SPH-R 413 at Indiana University taught by Jill Sturts in Fall. Since its upload, it has received 312 views. For similar materials see Fiscal Management for Leisure Services Organizations in Public Health at Indiana University.
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Date Created: 11/11/14
SPH R 413 Fiscal Management for Leisure Service Organizations Exam 2 Wednesday November 12th Pricing Chapters 89 Pricing quantifies the financial and other resources that a consumer exchanges with the provider or products or services Challenges Setting fees Analyzing quotpricing data Predicting consumer behavior Developing pricing strategies to meet the organization39s objectives Pricing Objectives Commercial price at a level that recovers more than the costs of production and delivery 0 Provide services without increasing taxes 0 Promote equity in that those who benefit from a leisure service pay for the service and users from outside the community pay more for the same services Increases accountability in government units ensuring only needed services are offered Provides for a positive attitude on the part of users due to enhanced respect and esteem for the usefulness of the service Not for Profit price at a level that recovers E amount of costs for production and delivery Public Organizations price at a level that recovers E amount of costs for production and delivery Purposes of Pricing Establish value you get what you pay for value of service is set in the mind of the consumer Value Added new resources Develop newadditional products and services new resources profits Support existing operations Pay dividends to investors Influence behavior the value of the service is set in the mind of the consumer when we pay for a leisure productservice it has value to us 0 Early bird special 0 Damage Deposits o Cancellation Penalties Promote Efficiency pricing is used to shift demand from peak periods to lower use periods 0 Discounts during off season when demand is lower 0 Bulk pricing season passes save on costs to print and charge for individual tickets 0 Two Tiered Pricing A incusive admission fee gives access to most rides but some require an extra ticket Promote Equity fairness in the allocation of services and resources 0 ChildSenior discounts 0 Youth scholarships Appropriateness and Feasibility Public basic services provide value and benefit to the community that is supported by public funding taxes 0 Concerts festivals parades special events Merit services indirectly benefits the community but primarily benefits the individual 0 Classes childcare swim lessons camps youth sports 0 Privnfp cprvirrpct cnlelv henefitc the rinncumer 0 Adult sport leagues trips and excursions golf courses Direct and Indirect Expenditures attributable to participation in the programactivity such as Registration and admission Transportation Gas bus fare maintenance Clothing and equipment soccer shin guards and shoes Proxy someone who fulfills your obligations babysitter work sub house sitter Refreshments Qualification pass physical to participate membership fees Reference photos t shirts to remember the experience Price of Participation Opportunity Price you pay the price for lost opportunity 0 Measured in time IU game night before exam lost study time 0 Measured in dollars pay for a weightlifting class vs buying weights for your home gym Psychological Price stress from participation in an event league contest 0 Step out of your comfort zone and put self esteem or social position at risk Effort Price are you up for it 0 Physical and mental fatigue embarrassment Approaches to Establishing Price Arbitrary Pricing Pick a number any number 0 Ignores market conditions and costly Competitive Pricing price consistent with competition 0 Effective if provider has similar goals resources costs and market conditions Market Pricing price what the market is willing to pay 0 Assumes consumers will pay at least the amount for cost recovery and then some Cost Recovery Pricing price based on required subsidy o Seeks a return from consumers that meets organization goals Calculating Costs for Unit Pricing Contingency prepare for the unexpected o 5 15 of total budget 0 Often additional costs you can39t plan for or predict Fixed and Variable Costs 0 Fixed costs incurred regardless of status of the program I Administration maintenance utilities 0 Variable costs that result from the actual operation of programservice I Support staff concessions P F V N o P Price 0 FV Sum of fixed and variable costs o N Number of units expected to be sold Subsidization and Unit Pricing Subsidy how much of the unit cost is recovered from sources other than the consumer 0 Public Organization tax revenues subsidize the real cost of the productservice o CommercialNot For Profit subsidize by using profits from other programs to cut costs of less profitable productsservices Other Considerations in Establishing Price 0 Prim 2139 1 Hiahnr Gnina R139n if than ic 1 uuillinamacc tn nI o If product or service is priced too ow You get what you pay for If it is underpriced it is often under valued Customer characteristics age income ability Product levels pay more for advanced levels vs beginner Distribution reserved seats higher fees prime time hours OOO o Merit Different prices for high quantity frequent use consumers Sensitivity to Changes in Price 0 Price Elasticity of Demand 0 Increase in prices decrease in sales Adjusting Prices 0 Reference Price amount the consumer feels the product of service should cost Based on consumer39s experience with similar services or information provided by the sport tourism or leisure service organization Objective Price the actual price charged for the service Subjective Price words or expressions a consumer uses to describe the difference between the reference price and the objective price bargain rip off deal Philanthropy Chapter 11 Consider What does philanthropy mean to you The desire to promote the welfare of others expressed especially by the generous donation of money to good cause 0 Cause usually effects or has some type of meaning to the donator No other country has the same level of giving as the US Philanthropic organizations focus on meeting social needs that are neglected by other sectors Why people give Different reasons we must touch their perceived need to give Social philosophical or personal Tax advantages Public recognition Create a person memorial Fund Development Stages It is a process of finding and nurturing potential contacts until they become committed to the cause three stages 1 Contact Phase First Time Donor Prospective Donor Universe of SuspectsThe Consumer Base 2 Growth Phase Cap aDonor SpecialMajor Gift Donor RenewedUpgrade Donor 3 Commitment Phase The Ultimate Donor Planned Gift Donor Fundraising Sources Individuals 0 Most significant source of money 0 Cultivation of donors prime emphasis o Donors have interest and wealth o May engage in risky projects or fund projects unfunded any other way Drawn because thy feel they can make a difference I Corporation and Industry o About 5 of contributions 8 billion I Strengthen the community I Board connections o Board members I Giving as expectation I Foundations 501c3 o Grant writing focus o Special events I Used to raise funds 0 Govemmentsources Mission Vision Statement I Grants Connecting missionvision with opportunities to give I VisionMission state direction and purpose I Staff provide behind the scenes major administrative support I Board expected to be key fundraisers and contributors Board I Opportunity for Gifts is the development and accomplishment of the mission Goals for fundraising focus on Staff I Focus is on outcomes in terms of money o Know financial needs for upcoming year o Know anticipated sources of income Opportunities for Gifts I How money is committed to what programs o Determine shortfall to be secured from fundraising I Programs and services not funded I Rule of thumb o Goal setting should be at 90 of previous year39s gratuitous income level The 398020 Rule 80 of money is coming from 20 of the donors Top 8020 Theory II II Middle Fresh Donors and WW3 II Bnttnm Fundraising Strategies I Annual Campaigns raising money to assist in paying a nonprofit organization39s regular ongoing expenses I Planned Giving o All the processes techniques associated with an annual fund drive 0 Effort to ensure organization39s future through a program where donors are I Iden ed I Contacted I Nurtured I Made a part of the planned giving program 0 I Other strategies 0 Support organizations designed to support a specific organization Friends orgs I Operate at the request of the parent organization Gift catalogs Personal bricks Donation boxes or fountains Adopt a facility program OOOOO Cause related marketing Grants Chapter 10 2006 68000 grant making foundations I 336 billion awarded Foundations make grant money available to accomplish charitable purposes I Independent foundations individuals families bequests I Corporate foundations I Community foundations 6 Steps GrantSeeking Process 1 Identifying a Potential Idea 2 Discovery Selection and Contact with grant maker 3 Preparation of grant proposal 4 Submission of grant proposal 5 Grant making agency responds to grant 6 Administer grant or seek a new grant making source General Components of Grant Preparation know the basics of each 1 Cover Letter formal introduction purpose address specific person Executive Summary overview of entire project present money amount requested Statement of Need states what gap you39re going to solve Project Description how it will work goals and objectives methodology staff and administration Organizational Information state what it is where it is and why it exists Budget assign the dollar value request what you need not what you think you can get Squot394gt quot Evaluation Process proof that you used their money wisely attach to goalsobjectives aim for Quantitative Data 8 Commitment and Capability how the project will be continued after the life of the grant planned and future funding Sponsorships Chapter 12 III Sponsorship a mute or non verba medium that targets active sport participants spectators and media followers in order to enhance the sponsors brand awareness and image and consequently increase the sponsor39s productservices sales Company objectives when considering becoming a sponsor 1 Image objectives Increase awareness of their brand Showcase their social responsibility Change or enhance their corporate image Build relations with external communities and public policy makers Build relations with employees their unions and other stakeholders Increase the relevance of their brand to specific markets Increase brand loyalty 2 Sales objectives Stimulate retail and distribution channels Expand their customer database and generate new leads Find newincremental business opportunities from major clients Display products or services Build business with co sponsors Stimulate their sales force 3 MediaPromotion Gain promotions in new distribution channels Reduce marketing costs Two Major Categories of Sponsorship Objectives 1 Corporation Reated Increasing public awareness of the corporation and its productsservices enhancing company image altering pubic s perceptions fostering community involvement building businesstrade relations and goodwill and enhancing staffemployees relations and motivations 2 ProductBrand Reated Serve the purpose of increasing target market awareness building brand image within the target market positioning increasing sales and market share and blockingpreventing competition from being successful within that target market Selling the Value of Sponsorship Opportunities Extend of activities length dates etc Number of people involved participants and spectators Media coverageexposure Image Prestige Valuable Association Importance in a variety of options to invest o Sponsorship levels I Banners guides billboards signage scoresheets emailswebsite marketing pieces equipmentuniforms product giveaways Accounting and Reporting Chapter 18 Accounting the system of recording and summarizing financial transactions and analyzing verifying and reporting the results Why is it needed There is a need for order in business especially in financial management Accounting is the conscience of financial management GAAP a common set of principles standards and procedures used for recording and reporting financial information Stock the financial resources available to the sport and leisure organization at a certain period of time A measure of what the organization owns and what it owes Flow the movement increase or decrease of financial resources during a certain period of time Focus is on the new change loss or gain in resources resulting from financial activity Balance Sheet Income Statement Balance Sheet Sept 1 September 130 Sept 30 SEPTEMBER What is if and What was received What is if and owed on this date and what was sg owed on this date STOCK during the month STOCK Balance Sheet Record of what the organization owns and what it owes at a given point in time Used by financial managers to report point in time financial conditions Assets things that are owned detailed on left side of balance sheet Assets Liabilities Equity 1 Tangible vs Intangible Tangible cash equipment inventories buildings land Intangible trademarks names patents 2 Current vs Fixed Current something is or can be converted into cash within one year Fixed something cannot readily be converted into cash Liabilities things the organization owes detailed on the right side of the balance sheet Include short term and long term financial obligations or commitments to staff contractors lenders suppliers etc Accounts payable rent salaries dividends to stockholders taxes Equity liabilities assets Ownership in any asset after all debts associated with that assets are paid off Owner39s equity stock shares earnings dividends Accounts receivable vs Accounts Payable Accounts Receivable Includes all the amounts that the organization expects to receive in the near future due to services rendered or goods sold to customers 0 Waiting for customer to pay after invoiced is sent out Accounts Payable presents the value of all goods and services received by the organization for which payment is due 0 Utility bills to be paid IncomeBudget Statement useful tool that allows the manager to review the financial activity of the organization with respect to the budget Reports all expenditures and revenue during a specified period of time Identifies whether a profit or a loss occurred over the specified period of time Different from a balance sheet in that it does not include future financial activity long term assets liability equity etc 1 Actuals 2 Committed 3 Balance 4 Revised Projections Petty Cash Helps an organization pay for small expenses ie parking postage stamps Expenses in excess of S20 are usually paid by check Petty cash funds are not typically used to pay recurring expenses such ass utilities or subscription regardless of the size of expense Petty cash amounts are usually 50 1OO Program Event Reports Compares projected and actual revenues and expenditures for specific programsevents Includes commentary that helps future organizers of the programevent understand what contributed to the financial success or failure of the project RevPar Revenue Per Available Room Provides a single metric which is a function of both room rates and occupancy Average Daily Rate x Occupancy Rate SPORTS SPONSORSHIP GROWTH
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