Proper fiscal management

Transcription

1 Budgeting and determining a dues structure for a pharmacy student organization Proper fiscal management is a cornerstone of the success of a student organization and helps to ensure a means to fulfill the organization s goals. This is especially true for pharmacy and other healthcare-oriented organizations wishing to provide outreach and screening events. These often high-cost events rely on sufficient funding and prudent budgeting. Furthermore, whether the aim is to pool large donations to start a new organization or collect small payments to maintain a positive balance for a current chapter, frequent review of the budget structure is needed. Basic guidelines on the principles of fiscal management as they relate to pharmacy-centric student organizations are available from larger parent organizations for schools seeking to develop new student chapters. 1-3 These guidelines contain general advice on what are considered best practices for budgeting and designing an overall financial process; however, they fall short of providing specific information on determining membership dues. This article will build upon key aspects addressed in these guidelines to propose a road map that may assist student organizations in developing budgetary policy, namely policy for determining a dues structure. Role of budgets in student organizations. Budget development allows an organization to plan and control financial resources, providing a basis for future planning. While an organization s mission is a set of actionable plans expressed in subjective terms, a budget is a set of parameters defined in financial terms within which the organization must be able to carry out its mission. Good budgeting accounts, allots, adjusts, and anticipates: It takes into account past financial successes and failures, allots funds The Pharmacy Student Forum column features articles that address the unique needs of students throughout school as they transition into new practitioners. Authors include students and others with expertise in a topic of interest to students. AJHP readers are invited to submit topics or articles for this column to the Pharmacy Student Forum, c/o Diana Dabdub, 4500 East-West Highway, Suite 900, Bethesda, MD ( or students@ashp.org). during the current fiscal year, adjusts according to unforeseen monetary needs, and anticipates future needs or gaps in income. The American Pharmacists Association Academy of Student Pharmacists (APhA-ASP) suggests that a budget must accomplish the following: clarify the financial goals correlated with each planned program and activity, encourage members to use funds effectively and efficiently, and assist in decision-making by providing accurate financial information and a historical reference for current and future planning. 1 To avoid the possible errors and stress that surround large-scale and long-term budgeting, some organizations choose to shoulder this responsibility via a financial committee rather than a single treasurer. 4 Stepwise approach to budgeting. Setting financial goals. A prioritized list of the chapter s objectives must be outlined and its financial goals defined. To complete this task, several questions must be asked: (1) What does the chapter aim to accomplish? (2) How will it be accomplished? (3) How much will it cost to accomplish? (4) How will the money to cover that cost be obtained? and (5) Over what time period will the budget be applicable (e.g., semester, year)? These financial goals should directly reflect the mission of the organization. If the group is a member of a larger parent organization, these objectives must align with those of the governing body. In addition, all student organizations must comply with policies and procedures required by the college and university under whose auspices they operate. Colleges often have specific requirements for reporting large financial transactions or place limitations on appropriate fundraising activities, such as excluding alcohol-related events. Local chapter officers must remain in close communication with the parent organization as well as their institution s office of student affairs. 5 The primary objective of most student organizations is to develop pharmacy students into competent working professionals. Individual organizations hold unique interpretations of this objective and employ equally nuanced programming modalities to achieve a common goal. We propose 4 separate but often overlapping orientations by which pharmacy student organizations can be categorized: 856 AM J HEALTH-SYST PHARM VOLUME 75 NUMBER 12 JUNE 15, 2018

2 Categorization of Pharmacy Student Organizations by Orientation Practice orientation American College of Clinical Pharmacy 6,7 Academy of Managed Care Pharmacy 8 American Society of Consultant Pharmacists 9 Industrial Pharmacist Organization 10 National Community Pharmacists Association 2 ASHP Student Society of Health-System Pharmacy 11 Service orientation American Pharmacists Association-Academy of Student Pharmacists 1 Student National Pharmaceutical Association 3 Recognition orientation Phi Lambda Sigma 12 Rho Chi Society 13 Social orientation Christian Pharmacists Fellowship International 14 Kappa Epsilon 15 Kappa Psi 4,5 Phi Delta Chi Pharmacy Fraternity 16 professional service, practice, recognition, and social service (Figure). Identifying which category an organization s mission most closely endorses can offer insight into the type of budgetary structure that is best suited to achieving the organization s goals. Organizations may identify across several orientations, since some characteristics can be ascribed to multiple categories. To assist organizations in determining a primary identity, we propose a primary identity structure for 14 student organizations commonly found at colleges of pharmacy within the United States (box). 1,2,4-16 Practice-oriented organizations introduce students to specialized areas of pharmacy practice. They tend to be affiliated with larger parent organizations, which introduces costs to maintain the association but, in turn, offers the benefits of having professional-level members involved in student programming. 2,6-11 Often, these professionals volunteer their time, resulting in operational costs lower than those of professional service oriented organizations. The larger parent organizations facilitate the continued success of these groups by offering reduced-cost incentives for student memberships with the expectation of retaining those memberships once students advance into professional practice. These organizations often have a strong serviceoriented component that instills in student pharmacists a commitment to servant leadership early in their career. Professional service oriented organizations are focused on promoting altruistic leadership through lifelong professional service commitments and providing pharmacy students with opportunities to give back to their community. The 2 major U.S. organizations in this category, APhA-ASP and the Student National Pharmaceutical Association, aim to expose members to experiences mimicking those in professional practice through a wide variety of service projects that develop skills transcending the boundraries of any single pharmacy practice area. These groups coordinate and participate in health screening events, which require single-use supplies and other consumables, and thus often have the highest expenditures of any of the 4 types of groups discussed here. 1,3 Recognition-oriented groups bestow honors and merit-based accolades. 12,13 Because membership is conditional and reflects a personal commitment to an exclusive mission, these organizations usually have a low maintenance cost. Typically, the upfront sum paid by the member includes the cost of any physical awards, with minimal subsequent out-of-pocket costs, and the groups need for external revenue is thus reduced overall. Organizations in this category are also active in volunteerism through the initiatives of their members, such as the free tutoring service offered by the Rho Chi Society. 13 Social service oriented organizations differentiate themselves via their customs and initiatives yet remain similar by being amalgamations of all 4 orientations. Members actively participate in community service events, extol exemplary members with recognition, and engage in initiatives tied to pharmacy practice. 4,5,14-16 While this variety of programming leads to high variability in costs, it in turn offers greater diversity in the opportunities available to recuperate funds. Given the nature of social service oriented organizations to foster camaraderie between members and create opportunities that engage members in several facets of their life, these groups generally have a moderate maintenance cost. Regardless of its orientation, a student organization must detail its goals at the beginning of each budgetary cycle and determine each activity s financial requirement. Groups should set goals in a realistic, flexible manner and must be willing to adjust programming to fit within budgetary constraints. Defining funding sources. After an organization has estimated the cost of programming, it must consider funding sources necessary to execute its mission. Income sources can be separated into 2 categories: membership dues and external revenue. External revenue encompasses fundraising, grants, institutional funding, donations, and other prospective revenue sources. The primary source of income will vary according to the group s fundraising ability and the availability of external funding. For example, the American Society of Health-System Pharmacists (ASHP) offers a grant program that affords state-affiliated and accredited colleges of pharmacy funds to establish a new or strengthen an existing ASHP Student Society of Health- System Pharmacy. 17 AM J HEALTH-SYST PHARM VOLUME 75 NUMBER 12 JUNE 15,

3 Figure. Flow diagram of recommended process for pharmacy student organizations to use in defining the group s primary orientation, determining programming, and developing and monitoring budget requirements. Boldface type denotes key decision inputs. Budget Development Process Recognition Review balance report No Dues schedule and upfront internal revenue No Categorize organization by primary orientation Periodically define chapter objectives Aligned with mission? Yes Set financial goals Balanced? Fundraising and back-end external revenue Yes Professional service Practice Social service After determining the group s eligibility for grants or institutional funds, a fundraising goal must be set. This goal should be set as an exact amount that is reasonably above the total cost of expenses. While no standard fundraising target is described in the literature, a goal of 5 10% above the total cost of expenses is likely sufficient. Discussing past fundraising events with other student organizations can assist in identifying feasible fundraising activities and determining an attainable goal. 1,2,18 The sum of these revenue sources should be carried forward, and any outstanding financial deficit should be met with dues revenue. By definition, dues are an obligatory payment made by an individual to gain access to the services offered by an organization and to receive benefits of membership. When using this model for new organizations, dues revenue will be a key to the organization s early success as it works to forge relationships with potential sponsors and future members. 2 Defining expenses. In addition to the aforementioned costs associated with running a pharmacy-related student organization, administrative and operational costs (e.g., printing and postage costs, meeting travel costs, costs of recruitment and promotional materials, speaker or entertainment fees, refreshment expenses, venue or equipment rental fees, sales tax) must be considered. When budgeting, it is im- 858 AM J HEALTH-SYST PHARM VOLUME 75 NUMBER 12 JUNE 15, 2018

4 perative to include all projected event costs, no matter how small, in order to prevent shortcomings as activities unfold. Chapters of larger parent organizations also have costs associated with maintaining affiliations. Some groups pay a flat rate for chapter affiliation, while most require members to pay individual dues. 3 Some parent organizations collect these dues from the chapter members directly, while others require the chapter to submit payments on the members behalf. The applicable payment methodology must be considered when communicating the dues structure to members. Achieving fiscal balance. Once the organization has determined financial goals and calculated potential sources of revenue and expenditures, it must ensure financial balance. In simple accounting terms, the sum of expenses must not exceed the sum of revenue. The abstract concept of financial balance may be illustrated by visualizing the literal mechanism of a prescription torsion balance. Imagine that on the left weighing pan is the expected external revenue and on the right pan are the various expenditures and costs associated with the programs the organization wishes to conduct; the dial represents income from dues. As the organization approaches budget development, the projected revenue goes on the lefthand side of the scale, with planned activities on the right, and the total projected cost of those activities is subtracted from the revenue. Once this calculation is completed, the organization can determine how much additional weight needs to be added to the scale how much money in the form of dues revenue is needed to balance the budget. While organizations with low expenditures may be able to create a balanced budget without external revenue sources, the finite ability to adjust the torsion balance dial to contribute weight to maintaining balance represents the idea that dues can only go so far in maintaining balance between external revenue and expenditures. Once the dial s capacity for adjustment has been exhausted (i.e., dues have been increased to the maximal reasonable level), either additional weight (external revenue) must be placed on the left side of the scale or expenditures must be removed from the right side in order to regain balance. Another useful analogy can be drawn from health insurance policies. Determining the spread of internal and external income can be likened to choosing an insurance plan, with insurance premiums representing member dues and with copayments or coinsurance representing income from fundraising and donations. 19 Just as a consumer does when shopping for insurance, a student organization must determine whether it would like its members to pay lower upfront costs but more out-of-pocket expenses at the time services are rendered or to pay higher upfront costs but little or no costs at the time of service. With the former strategy, each member of the student organization is responsible for a smaller dues payment, but the organization must ensure that all members help fundraise or obtain donations in order to create new programs or undertake grander initiatives; with the latter approach, members payment of higher dues up front allows the organization s leaders to worry less about fundraising to cover event costs. The best solution may be to find an acceptable compromise between these 2 approaches. In order to help organizational leaders develop and implement their budgets, we propose the pragmatic, stepwise process outlined in the Figure as a guide to be used along with other consulted resources. Summary and conclusion. Establishment of a fiscal plan and subsequent fiscal management of a student organization at a college of pharmacy may seem daunting but it is achievable with a systematic approach. It is essential that an organization determine its primary identity and then determine the programs that will further its mission. With programming defined, the organization can estimate expenses. The organization can then find the proper balance of fundraising and dues to meet its financial needs. As financial development progresses, it is important to revisit the budget structure several times throughout the fiscal year to ensure that the organization remains on track and is sustainable. 1. American Pharmacists Association. APhA-ASP chapter officer resources National Community Pharmacists Association. Student chapter operations & sustainability manual Student National Pharmaceutical Association. Chapter management manual Kappa Psi Pharmaceutical Fraternity, Inc. Constitution and uniform by-laws of the Kappa Psi Pharmaceutical Fraternity, Inc. (2015). /Constitution%20and%20ByLaws/2015%20Constitution. pdf 5. Kappa Psi Pharmaceutical Fraternity, Inc. Policy and procedure manual (2016). uploads/files/policy%20manual/kappa%20psi%20 Policy%20Manual% pdf 6. American College of Clinical Pharmacy. Sample student chapter bylaws. SCCP.pdf 7. American College of Clinical Pharmacy. Student chapter guide. Guide.pdf 8. Academy of Managed Care Pharmacy AMCP chapter operations manual (2016). WorkArea/DownloadAsset.aspx?id=21520/ (accessed 2016 Nov 17). 9. American Society of Consultant Pharmacists. ASCP chapter operations manual. download.asp?fileid=47cdd433-ba24-4f B8A34CF83695/ 10. Industrial Pharmacist Organization. About IPhO (2017). (accessed 2016 Nov 17). AM J HEALTH-SYST PHARM VOLUME 75 NUMBER 12 JUNE 15,

5 11. American Society of Health-System Pharmacists. SSHP programs and resources. Student/Student-Societies/SSHP-Programs-and-Resources 12. Phi Lambda Sigma. National constitution of the Phi Lambda Sigma (March 2016). Portals/0/National%20Bylaws%20Updated%20March% pdf 13. Rho Chi Society. The Rho Chi Society national bylaws (March 2010). uploads/2014/11/bylaws_2010_revision_3_2012.pdf 14. Christian Pharmacists Fellowship International. Philosophy of student chapters. assets/docs/student_documents/starting_a_chapter/ philosophy_of_student_chapters_ pdf (accessed 2016 Nov 17). 15. Kappa Epsilon. Kappa Epsilon professional pharmacy fraternity collegiate chapters. chapters/collegiate/ 16. Phi Delta Chi Pharmacy Fraternity. Official constitution and bylaws of the Phi Delta Chi Pharmacy Fraternity (2015). /collection/9c8733a6-96d4-4c2f-ba57-ae8c5f25db26/ Constitution_&_Bylaws_2015.pdf 17. American Society of Health-System Pharmacists. SSHP grant development program. Student/Student-Societies/SSHP-Programs-and- Resources/SSHP-Development-Grant-Program (accessed 2016 Nov 17). 18. American Society of Health-System Pharmacists. Fundraising and philanthropy. MemberCenter/SectionsForums/PSF/Student-Societies/ Tools/Fundraising.aspx/ 19. Hunt KA, Knickman JR. Financing health care. In: Kovner AR, Knickman JR, eds. Health care delivery in the United States. 9th ed. New York: Springer; 2008: Carinda J. Feild, Pharm.D., FCCM Priti N. Patel, Pharm.D., BCPS Lindsey M. Childs-Kean, Pharm.D., M.P.H., BCPS James S. Alcorn, Pharm.D., M.S.Pharm., AAHIVP Winter Haven Hospital/Baycare Health System Winter Haven, FL Liliana R. Pimentel, Pharm.D. Mease Countryside Hospital/Baycare Health System Safety Harbor, FL At the time of writing, Dr. Alcorn and Dr. Pimentel were Pharm.D. students at. The authors have declared no potential conflicts of interest. Keywords: budget, dues, organization, pharmacy, student Copyright 2018, American Society of Health-System Pharmacists, Inc. All rights reserved /18/ DOI /ajhp AM J HEALTH-SYST PHARM VOLUME 75 NUMBER 12 JUNE 15, 2018