June 13, 2017 Board of Directors Meeting Fiscal Year 2018 Budget - PowerPoint PPT Presentation

June 13, 2017 Board of Directors Meeting Fiscal Year 2018 Budget and Supporting Materials 1

Overview • Executive Summary • FY 2017 Operations & Financial Review • FY 2018 Operational Plan Overview • FY 2018 Financial Budget • Required Resources 2

Executive Summary for FY18 Budget • Targeted growth from 94K to 106K children. • Focus on 4 current RMD Target Markets – Chicago, Louisville, Jacksonville and SW Florida. • 3 New Target markets for late-spring – LA, DC, ATL. Funding to be raised in advance of RMD hires. • Due to financial constraints, Food Logistics services are not in the budget, but are still a big focus. • Cash flow critical first 5 months of the fiscal year 3

Fiscal Year 2017 Operational & Financial Plan Highlights 4

Fiscal 2017 Program Dept. Highlights Overall Goal: Headcount Growth of 16,500 to 104,500 children served Develop infrastructure to support growth in the areas of: ü Staff including “Boots on the Ground” ü Program Support Strategy v Pricing Structure v Enhanced Volunteer Support All others, 27,596 , Sysco, 29% 25,370 , ü Food Logistics Optimu 27% m Publix, Walmar Foods, 2,316 , t/Sam's 3,855 , 3% Club, 4% 21,812 , Meijer, 23% 11,649 , ü Chapter Structure Implementation 12% 5

FY17 in Review: Staff Additions = “Boots on the Ground” 2017 Approved Plan Establish boots on the ground to grow regional base in the following areas: • Southwest Florida (PT to FT) – 7/1/16 target, implemented 11/1, once Jacksonville RMD was hired and trained ü Jacksonville Florida – 8/1/16 target, hired 9/21/16 ü Chicago – 8/1/16 target, hired 9/11/16 ü Louisville – 1/1/17 target, implemented 1/1/17 ü Selection criteria included strong local advisory board in place (except Chicago where overseeing NUDM funding was • a key requirement) • Hire in advance of positions being able to support their own costs. Expected year 2 to be self-funding. Expected cost was $66K ($56K salary + $5K travel + $5K misc.) • 2017 Results/Findings Regional Managing Directors in FL markets spend more time • than anticipated on local advisory board development and Headcount Growth FY 2017 maintaining existing programs vs. fundraising and program Region Begin End* Change % change Plan growth Southwest Florida 2,752 3,295 543 20% 4,615 • Actual RMD cost higher than expected. FY 2018 budget $84K average or $18K higher than FY 2017 expected Jacksonville Florida 9,772 10,700 928 9% 11,731 Positions require financial support for marketing and PR, • Chicago 4,987 5,564 577 12% 7,236 geographic-specific website, etc. in addition to Louisville 7,457 7,303 - 154 -2% 9,250 salary/benefits/travel • Each market has different attributes that impacted growth * Projected 6

FY17 in Review: Program Support—Pricing Strategy 2017 Approved Plan Major initiative: New Pricing Rollout 2017 Findings/Results $10 per child nonfood program support to take effect in the 17-18 school year was announced in • October 2017 • Backlash from existing “legacy” programs was extremely negative Following Board of Directors input, a Pricing Task force convened in December 2017 • A revised price structure for legacy programs was approved and implemented 2/1/17 • Impact is effectively $2/child vs. $10/child; however, risk of losing children served was lessened • 7

FY17 in Review: Program Support—Volunteer Resources 2017 Approved Plan Major initiatives: Enhanced Volunteer Support 2017 Findings/Results • PC newsletter was launched in May to coincide with National Volunteer Week Significant enhancements to the PC Toolkit for volunteer Program Coordinators (PCs) • Comprehensive updated Operations Manual to be released by June 30, 2017 • Possible National PC Conference was delayed to 2018 to focus on reaching PCs through • newsletter and PC Toolkit and to ensure adequate sponsorship support 8

FY17 in Review: Food Logistics 2017 Approved Plan • Create a National agreement with incumbent Sysco or other appropriate food vendor • Pilot a prepackaged solution with Champion Foodservice Create an advisory committee to weigh in on possible solutions • 2017 Findings/Results A National agreement with Sysco would have added 10% to food cost • Prepackaged solution with Champion was piloted in Florida and Louisville through Sysco • ü Very successful in Florida ü Mixed results in Louisville ü Sysco’s lack of willingness to stock both prepackaged solution and “line item” menu was a significant obstacle to further roll-out • Attempts to address food logistics with probono consultants were not successful ERA hired to support food logistics reengineering in April. Detail analyses completed in May. • Initial recommendations expected by the end of June 9

FY17 In Review: Chapter Structure Implementation 2017 Approved Plan Develop a model to replicate in new markets • Standardize local advisory boards • 2017 Findings/Results Initiative was assumed by Director, Strategy and New Initiatives in connection with new market • roll-outs Templates developed included: • ü Operating Practices and Principles ü Advisory Board Member Job Description ü Advisory Board Member application Regional Managing Directors are using templates as guidelines in working with established local • advisory boards in moving to best practices, modifying as appropriate for local market needs. Some cultural resistance to overcome (i.e. no prior “dues” or “give or gets”) 10

Fund Development – Davidoff Consulting Project Develop corporate partnership program to develop a pipeline of national corporate partnership opportunities. What Was Successful • Defined our program, what we offer and how to activate partnership o New sponsorship program to leverage marketing dollar o Better understanding of who we are, how others see us, and how to leverage that o 41 new corporate donors as of 3/31/17 o 4 new cause marketing partners, 3 on partnership agreement phase, 4 developing o What Was Not Successful/Lessons learned • Cold outreach gets lost in the “noise.” Decision makers don’t respond without a known o contact sending the correspondence Large corporations see us a small fish in the pond – more influencers we have, the better o Corporations default to school investor support – working on how to change that o Cause marketing has much slower lead time than the standard corporate relationship o 11

FY 2017 Budget to Projected - Statement of Operations Restricted FY17 Unrestricted FY17 Total FY 2017 Budget Projected Budget Projected Budget Projected Variance Revenues Unrestricted Donations $2,356,654 $2,275,956 $2,356,654 $2,275,956 ($80,698) -3% Program Revenue $8,029,936 $7,190,895 $8,029,936 $7,190,895 ($839,041) -10% Fundraising Events (Net) - Unrestricted $206,500 $198,433 $206,500 $198,433 ($8,067) Other Income/Gift $12,836 $12,836 $12,836 Investment Income $22,800 $30,330 $22,800 $30,330 $7,530 Total Revenue $8,029,936 $7,190,895 $2,585,954 $2,517,555 $10,615,890 $9,708,450 ($907,440) Expenses Food & Backpack $8,157,936 $7,018,961 $66,850 $55,336 $8,224,786 $7,074,297 $1,150,489 14% Staff $1,810,980 $2,007,957 $1,810,980 $2,007,957 ($196,977) -11% Contract Services $207,195 $146,454 $207,195 $146,454 $60,741 29% Administrative $524 $351,256 $329,699 $351,256 $330,223 $21,033 Depreciation Expense $12,000 $15,478 $12,000 $15,478 ($3,478) Marketing $4,500 $74,650 $26,686 $74,650 $31,186 $43,464 58% Travel $128,860 $128,502 $128,860 $128,502 $358 Other $1,426 $0 $1,426 ($1,426) Total Expenses $8,157,936 $7,023,985 $2,651,791 $2,711,538 $10,809,727 $9,735,523 $1,074,204 Increase (decrease) in Net Assets ($128,000) $166,910 ($65,837) ($193,983) ($193,837) ($27,073) $166,764 Direct Program Expense %, prior to Indirect Expense Allocation 76% 73% Total Non-Food Revenue is below budget, mainly due to a shortfall in program driven revenue as there was a change in the program fee from $10 to 2%. Food revenue is lower than budget, because we were feeding less children in the program during the year compared to budget. Full year we are approx. 10K children behind Food expense is lower than budget, because we were feeding less children in the program during the year compared to budget. Full year we are approx. 10K children behind Staff expense is projected over budget, in part do to the hiring of the Director of Strategy, which was not budgeted. Also the Communications Manager went FT from PT Staff expense was also higher as 1 new FTE position was originally in Contract Services. (Volunteer Engagement Coordinator) Contract Services is lower as food logistics services were lower than budget and due to a staff position being moved to salaried staff vs contract, per above. 12 Marketing expense is ahead of budget as we did not spend as much as planned. Savings were used to help offset other costs.