Pals 4 Paws Nonprofit Financial Plan and Funding Strategy

Startup Funding and Initial Capital

The startup funding for Pals 4 Paws is $50,000. This capital was provided by the founding members of the organization from their own personal funds at the beginning of 2014. During 2014, there was relatively little fundraising activity, as the founders were focused on other aspects of launching the organization. Today, net assets stand at $14,192. Crowdfunding, online advertising, and special events are the current focus of fundraising efforts, with major fundraising events scheduled for later in the plan period.

Expense Structure and Fundraising Costs

The initial expenses are related to startup needs. The organization must acquire a space in which to operate along with the physical assets required to run it. Basic supplies such as computers and furniture are part of the buildout. Marketing expenses are initially focused on fundraising costs. For 2014, total marketing expense is expected to be approximately 44.7% of budget, slightly below the originally projected 50%. For subsequent years, fundraising is expected to be the most significant expense category, at around 75% of total costs.

The objective of this spending level is to build up the organization's capital and improve brand exposure. By accumulating capital resources, Pals 4 Paws will be better equipped to invest in the physical infrastructure needed to fulfill its mission. Furthermore, the organization plans to work with other agencies by providing funding, which requires a high and sustained level of donations. Fundraising costs are therefore expected to remain fairly high during the buildout phase.

Cash Flow Projections and Early Operations

For the first year, most of the cash flow will be dedicated to initial startup expenses. The initial $50,000 will be almost entirely spent during this period, with a small portion held back as a contingency fund. Spending will be directed toward general fundraising activities as well as acquiring the infrastructure needed to run the organization.

Net assets are expected to decrease further in 2016 before beginning to increase thereafter. This trajectory reflects the time required to build the brand and develop fundraising capabilities. After establishing a body of work, the organization should be able to host fundraising dinners that generate upwards of $100,000. Until that point, Pals 4 Paws will operate on a bare-bones budget, keeping expenditures minimal and relying heavily on small-scale donations from online sources and crowdfunding efforts.

Cash flow will be at its weakest at the beginning of 2016, dipping below the $10,000 mark. After that point, expanded fundraising capabilities are expected to reverse this trend. Until early 2016, the organization will be operating at a precarious cash flow level, experiencing minor cash losses month over month that gradually diminish the cash supply until major fundraising efforts can be completed.