American red cross strategic plan 2016

Running Head: SETTING A BUDGET 1

SETTING A BUDGET 6

SETTING A BUDGET

Ashley Cook

HMSV8304

The American Red Cross is an organization with immeasurable commitment to provision of compassionate care to people who are in need in America. As such, this is their mission and their budget epitomizes this. The largest chunk of the income that is mainly received from grants from governments and organizations as well as donations from organizations is spent on humanitarian activities. For the year 2018, 91.85% of the $0.5 billion that was raised from the aforementioned sources was used in humanitarian activities. These included helping people who needed care in in disasters in the shortest notice, ensuring and maintaining community health especially by being in the frontline to deliver blood to patients who needed it in our health facilities. The organization recognizes the importance of mitigating disasters before they happen and therefore set aside $1,659,000 that was used to keep teams ready to stop a disaster before it happened or minimize injury or loss of life as much as possible. This is in line with the organizations principle of being proactive rather than react to disasters when they happen.

The American Red Cross has a total 12,534 permanent employees spread all over the nation to offer humanitarian help whenever and wherever it is needed (Hutchinson, 2018). These are selfless individuals who are always risking their lives to save others’. The organization therefore aims at giving the employees the best working conditions given the circumstances and making sure that they stay safe as much as possible while delivering help. As such, American Red Cross buys the best equipment and vehicles to help the employees as well as volunteers in humanitarian work to get to sites of disasters in the shortest time possible and safely. This is why the company has invested in top notch ambulances that have lifesaving equipment that may be used by the employees to save lives in an occurrence of a disaster.

As indicated above, funds that are used by the organization to finance its operations as well as management are received from state and federal government, and international organizations as grants or from the public as donations. Often times, the funders wish to know how the funds that they give out the cause of saving human lives through humanitarian assistance is used (Schnupp & Möller 2018). The organization therefore posts its official budget on its official website where it can be accessed by all people. In the last 5 years, the donations have been on the rise and this is a good indicator that the people who fund the organizations are happy about how the money they give to it is being used.

One of the key strengths in the company is the manner in which the employees relate with each other and the organization at large. The organization appreciates the selflessness of the people working there. As such, employee retreats are held twice a year to give the employees a chance to feel appreciated for the work that they do (Peterson, 2018). This has gone a long way in instilling a very good organizational culture and this is especially seen in the manner at which employees are motivated to do their work (Slater et al, 2019). The organization intends to become even more proactive going forward and with an employee base that is motivated to work selflessly and an inclusion of disaster preparedness fund in the budget, this is very achievable (Barr& McClellan, 2018).

Budgets are very important when it comes to the effectiveness of an organization. For instance, budgets allow an organizational to keep its eyes on the target. Budgets serves as reminders of objectives and offers direction towards which money should be spent. In that way, it makes the organizational follow its stipulated strategy to achieve its goals. Budgets also come in handy in transparency within the organization (Sorenson & Goldsmith 2017). Every organizations budget contains minute details of what activities should be done in line with its objectives. After this, every department has its own allocated amounts and the activities that are taken are checked against their budget allocations to ensure transparency (Miller, 2018). In such organizations as the American Red Cross that receive funds from donors, the budget provides information regarding the expenditure of that money and indicates where money is going (Akai & Sato, 2019). Lastly, budgets are important in that they ensure that an organization is operating within the realms of the available funds and efficiently at that. It would be difficult for any organization to operate without going back to a budget for a direction regarding expenditure. Often times, it would commonplace to find expenditure exceeding the available funds (Yuliansyah & Khan, 2017). Thankfully, budgets restrain activities within available funds. On top of that, when there is a budget, funds are used more efficiently (Brown et al, 2016).

In conclusion, budgets play an invaluable role towards successful realization of organization objectives.

References

Akai, N., & Sato, M. (2019). The role of matching grants as a commitment device in the federation model with a repeated soft budget setting. Economics of Governance, 20(1), 23-39.

Barr, M. J., & McClellan, G. S. (2018). Budgets and financial management in higher education. John Wiley & Sons.

Brown, J. L., Fisher, J. G., Peffer, S. A., & Sprinkle, G. B. (2016). The effect of budget framing and budget-setting process on managerial reporting. Journal of Management Accounting Research, 29(1), 31-44.

Hutchinson, J. (2018). Champions of charity: war and the rise of the Red Cross. Routledge.

Miller, G. (2018). Performance based budgeting. Routledge.

Peterson, A. K. (2018). The Role of Organizational Culture in Donor Recruitment at the American Red Cross. Metamorphosis.

Schnupp, C., & Möller, K. (2018). Capital budgeting optimization through process design. Controlling, 30(6), 13-21.

Slater, S., Bogard, B., Clark, A., & Reed, K. (2019). American Red Cross Home Fire Safety Campaign.

Sorenson, R. D., & Goldsmith, L. M. (2017). The principal's guide to school budgeting. Corwin Press.

Yuliansyah, Y., & Khan, A. A. (2017). A revisit of the participative bu

ActivityAmount

Grants300000

Donations200000

Total500000

Humanatarian Activities459255

Disaster Preparedness16590

Personnel Salaries 10000

Consultancy Fees5000

Epenses on goods

Vehicle100

Software50

Insurance2000

Rent2000

Telephone5

Epenses on services

Personnel Transport1000

Personnel Meals1000

Employee Retreats1000

Hotel fees1000

Miscellaneous support.1000

Total500000

Income

Expenses

Budget For The American Red Cross for the year 2018 (Amounts are in thousand USD)

Sheet1

Budget For The American Red Cross for the year 2018 (Amounts are in thousand USD)

Income

Activity Amount

Grants 300000

Donations 200000

Total 500000

Expenses

Humanatarian Activities 459255

Disaster Preparedness 16590

Personnel Salaries 10000

Consultancy Fees 5000

Epenses on goods

Vehicle 100

Software 50

Insurance 2000

Rent 2000

Telephone 5

Epenses on services

Personnel Transport 1000

Personnel Meals 1000

Employee Retreats 1000

Hotel fees 1000

Miscellaneous support. 1000

Total 500000