Spending Pattern

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    lynettehatton4

    Hi,

    The best way to model wages is via a Labor Income Change Activity. Here you will only have two "sector" options: Employee Compensation or Proprietor Income, to choose from. The fully-loaded payroll value (including benefits) going to Wage and Salary Employees can be enter as Employee Compensation, whereas payments to proprietors can be entered as Proprietor Income. 

    As for your non-labor expenditures, the best Activity Type to use would be an Industry Spending Pattern Activity or Institution Spending Pattern (the process and calculations that going into building either Spending Pattern from scratch is the same). You should build this spending pattern by editing the Activity Level on the Activity to be the total dollars spent on all the non-labor expenditures you will be entering into the spending pattern. Then, you'll want to go through and add an Event for each expenditure (office/admin costs, insurance, utilities, repairs etc.) by picking the best Commodity (the Commodity codes can be bridged from the primary Sector code by adding 3000) and then filling in the Coefficient on each Event as the portion (in the form of a decimal/coefficient) of the total non-labor spending that you've defined as the Activity Level that is spent on the given commodity in each Event. 

    Learn more about building Spending Patterns and pairing them with a Labor Income Change here. Your results will be missing a Direct Effect, which you'll have to rebuild using the information you have available about the nonprofit's operations. 

    To help rebuild your Direct Effect:
    Employment: annual average headcount of all employees (including proprietors) 
    Labor Income: Employee Compensation + Proprietor Income
    Value Added: Labor Income + tax on production and import (TOPI) and other property income (OPI, mostly corporate profit)
    Output: Value Added + Intermediate Expenditures(non-labor purchases)

     

    Thank you!

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