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Harlan Foundation: Company Background

1) The Harlan Foundation was created in 1953 through a bequest to benefit the people of Minneapolis. It operated several social services programs and broke even through client fees, donations, and government grants. 2) The Foundation was donated a camp and planned to run a summer camp for children with disabilities. Based on estimated costs of $197,657, the weekly fee per camper should be $494 to break even. 3) For a seminar for social services managers, the estimated costs are $3,680. Dividing this total cost by the 30 attendees means a fee of $132 per person should be charged.

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668 views4 pages

Harlan Foundation: Company Background

1) The Harlan Foundation was created in 1953 through a bequest to benefit the people of Minneapolis. It operated several social services programs and broke even through client fees, donations, and government grants. 2) The Foundation was donated a camp and planned to run a summer camp for children with disabilities. Based on estimated costs of $197,657, the weekly fee per camper should be $494 to break even. 3) For a seminar for social services managers, the estimated costs are $3,680. Dividing this total cost by the 30 attendees means a fee of $132 per person should be charged.

Uploaded by

Prachi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Harlan foundation

Company Background:

 Created in 1953 under the terms of the will of Martin Harlan, a wealthy Minneapolis
benefactor. (bequest was approximately $3 million)
 Income from the funds was used for the benefit of the people of Minneapolis and
nearby communities. For examples, in the next 50 years, the trustees developed a
wide variety of services such as 3 infant clinics, a centre for the education of special
needs children, a large rehabilitation facility, etc.
 Harlan Foundation was affiliated with several national associations that provided
similar services.
 Operated on a break-even basis. A relatively small fraction of its revenue came from
income earned on the principal of the Harlan bequest. Major sources of revenue
were fees from clients, contributions, and grants from the city, state, and federal
governments.
 Program expenses included all the expenses associated with individual programs.
 2 additional activities undertaken: Summer camp(Clients: children with physical
disabilities) and Seminar ( Clients: managers in social service organizations)

Camp Haran:

 Donated by a person who had owned it for many years and was now decided to
retire.
 The property consisted of 30 acres, with considerable frontage on a lake, and
buildings that would house and feed some 60 campers at a time.
 PLAN: Operate the camp for 8 weeks in the summer and to enroll campers for either
1 or 2 weeks. Charge for each camper will be a fee sufficient to cover the cost of
operating the camp (Financial aid to those who are unable to pay).
 Fee Calculation: Henry Coolidge (Financial vice president), obtained information on
costs from the American Camping Association and two camps in the vicinity. He
decided to plan on 50 campers at a time and a total of 400 camper-weeks for the
season.
 Sally Harris, president of the foundation agreed for a 400 camper-weeks and that the
budget estimates were reasonable.
 Other Items to consider:
1. The central office, which would continue to plan for the camp, make decisions on
financial aid, and do other bookkeeping and accounting work. As a rough guess, about half a
person-year might be involved in these activities (average annual salary of about $36,000,
thus cost add of 18,000)
2. Volunteers: At the camp itself, approximately four volunteers per week would help the
paid staff. They would receive meals and lodging, but no pay. No allowance for the value of
their services was included in the budget.
3. Depreciation of the camp’s facilities: If the camp and its buildings were sold to a
developer, perhaps as much as $500,000 could be realized.

1. What weekly fee should be charged for campers?


Food: 19000 – 400 campers. To add 4 volunteers for 8 weeks = 32 volunteer-week =
432*19000/400 = $20,520
Telephone and utilities = 9000/400*432 = $9,720
Estimated value of lane = 2500(estimated value/acre)*30 = $75000
Remove this from $500000 = $425000
Assume salvage value of $25000 for the property and a 10 year life = (425000-
25000)/10 = $40000/year
Total: 20,520+90000+4000+9720+15100+7000+9317 = 197657
Per camper cost = 197657/400 = $494

2. What weekly fee should be charged for campers?


To add Ms. Harris Salary: Total Admin cost - $480,326
70 percent as salaries: $480,326*0.7 = $3,36,228
5 members with $36000 = $1,80,000
Salary of Harris and Coolidge = $3,36,228 - $1,80,000 =$ 1,56,228
Coolidge Salary = 1.5*Coolidge Salary. Thus 2.5x = 156228, x = 62,491
Coolidge salary = 62,491/365 = 171
Total Salary spend = 171+99 = 270

Total Cost = 3680 + 270 = 3950


For a $100 Fee, Break even = 3950/100 = 40 People
But only 30 attendees, Hence Fee = Cost / Attendee = 3950/30 = $132

3. What fee should be charged for the seminar?


In early spring, Ms. Harris had approved the plans for the seminar. 30 participants in
the seminar.
SEMINAR PLAN
1. Hotel Rental $200
2. $20 per person for meals and refreshments (20*30+ 20*4 = $680) .
3. Audio-visual equipment: $100.
4. Two instructors Fees $500 each (=$1000).
5. Printing and mailing cost $900.
6. Notebook Cost (10*60 = 600)
7. Miscellaneous Expenses $200.
TOTAL: 3680

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