Friends: Breakeven Analysis

Case Study 10

Friends: Break-Even Analysis

Friends is a charitable organization that sponsors group activities and provides adult companionship for troubled youths from single-parents families. Friends screens, trains, motivates, and supervises the adult volunteers, who are paired with children referred by local agencies and by parents concerned with their children’s future. The organization provides a service that can augment any professional help a child may be receiving. But its main role is one of prevention by providing a meaningful adult relationship for a child before the child becomes a severe parental or social problem. Friends is a nationwide organization that began in 1911 in Cincinnati, Ohio, and there are over 200 local agencies throughout the country with the parent office, Friends Central, in New York. Friends Central provides support in establishing and administering local programs, but each agency is responsible for raising its own funding.

The Culver City branch in Forsyth County, Virginia, was started only six months ago and has an operating budget for the current year of $60,000. The budget is modest by most standards but will be hard to achieve given the newness of the organization and the nationwide recession that has hit Culver City especially hard. About 30 percent of the necessary funds will come from the United Appeal, and the remainder from a government grant, some fund-raising events, and donations.

The Importance of the Dance

The final event planned is a dance that the organization hopes will raise $8,000, which is the projected yearly deficit. Although eliminating the shortfall is an important objective, there are other reasons why the dance needs to be successful. The Forsyth County United Appeal has made it clear that it wants local agencies to establish their own fund-raising events. There even is talk that the United Appeal will implement a financing scheme in which it matches every dollar in profit generated by an...