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The Association's New Year's Resolution

Posted By Emily Le, Wednesday, December 30, 2015

With 2015 in the rear view mirror and the Times Square Ball now dropped, about 147 million Americans affirmed some personal goals for 2016. As the new year has arrived, what aspirations do you have for your association? After years of working with associations, Ewald Consulting has come up with a few stellar New Year's resolutions that your association may want to consider adopting and committing to for continued success through next December.


  1. Review and commit your organization to sticking to your budget

With each new year, we must remember that your association’s budget is a great tool to strategically plan and monitor the finances of your organization, if created correctly. One problem that we see many associations run into is that their budget is based on assumptions and not facts. Always build a realistic budget that reflects what is happening in the organization, not around other goals (i.e.: don’t base your budget off of the idea that you’ll be successful in growing membership 20% this year. Base it on your current membership numbers). Once the budget has been created, keep in mind that it must remain flexible and responsive to opportunities and threats that may emerge during the year. Another way to create an involved budget is to include everyone that it affects. By involving board members, program managers, development staff, finance managers, and executive directors, your organization will be much more likely to stick to your budget.


  1. Review your Board of Directors

As the new year kicks in, it might be a good time to take a look at rejuvenating your board. Often times, a board can benefit from new leadership, even if the current board is doing an okay job. Bringing in some fresh faces and perspectives can spur innovation, renew the organization’s energy, and reemphasize your mission and purpose. By disrupting the status quo, you may push your organization back on the path they have been very slowly moving off of. If you don’t think this is the right course of action for your association, consider investing in a leadership retreat to have the same effect on your current board.


  1. Take a look at your events

How did your events go this year? Were participants especially excited about a certain venue or speaker last year? The new year is a great time to reach out to some of your more active members or to revisit the results of last year’s post-conference survey. Planning the venue at a new and exciting location, bringing in new speakers, or changing up your education sessions are all great places to start thinking about implementing change. With your annual conference being the major touch-point with a majority of your members, it’s pertinent that your organization commit itself to ensuring an incredible experience.


We hope your association saw amazing successes in 2015 and that they continue into the new year. By committing yourselves to excellence in these three areas, you’ll be well on your way to doing so. If your association ever wants to augment its events, marketing, professional development, communications, sales, or finances, our team is here to help. Feel free to give us a call at (651) 290-6274 or email us at paulh@ewald.com. We’d be happy to hear about what you want to accomplish and how we can play a role in getting you there.


Here’s to a wonderfully successful and fun 2016 - cheers!

Tags:  association management  budget planning  New Year's 

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The Secret to Successful Budgeting: Have More Income Than Expense

Posted By Bill Monn, Monday, October 6, 2014
Updated: Thursday, October 2, 2014
Untitled Document

A solid, profitable budget is just that simple: take in more than you spend. Creating that winning budget is a confluence of science and art – and sometimes a favorable wind.

Step 1: Start your budget planning by thoroughly understanding where you are. Concentrate on the big 3 — revenues, expenses and margin. Where are your revenues, expenses and margin relative to what you planned for in the current year? Look at them together as well as individually. A spike in expenses is not necessarily a bad thing if there has been a corresponding spike equal or greater in revenues. Conversely, a big jump in revenue could be a mirage if you have had a bigger jump in expenses. Review variances from your budget. If attendance is lower than projected for monthly events, understand why. Is it program content? Cost to attend? Location? Time of day?

Step 2: Understand the trends. Once you have a good feeling for where you are, take the time to understand where you’ve been. Two points on a chart are a direction, three are a trend. Go back at least three years — four is better — and graph your revenues, expenses and margin. You can do this for every event or every element of your organization, but at the very least roll up the overall numbers. Look at the variances on the chart and they will show maximum and minimum boundaries for budgeting purposes. In the absence of any major changes (adding or eliminating an event, for example) the science of budgeting tells you that next year’s budget should be within this range.

Step 3: Boldly wade into the future. This is where the art of budgeting will guide you on projecting in a more aggressive or conservative vein. You’ve done the left-brain stuff in analyzing the data of where you are and where you’ve been. You can poke at them all you want, but they won’t change. What can your right brain leverage from all that is spinning around? Is the economy on an upswing? Has anything changed that will require your members to need more of your services — such as a requirement for new or additional education credits that may prompt them to attend your conference? Has competition for your services or products changed? Are there opportunities to impact your cost side — such as transitioning from a printed newsletter to an electronic newsletter?

Step 4: Mix them together and make magic. An age-old practice is to hedge bets with conservative numbers on revenue and aggressive numbers on the expense side. This also is referred to as sandbagging. Trust your trending data on this. If you have a long history of results for a particular area, you are not planning anything significantly different and there are no external drivers, then you can be pretty confident you will have a similar result. If you have an area where results have bounced around over the years, you should be careful in projecting a big swing either up or down.

We’ve observed a number of pitfalls to watch out for during the budgeting process. Be alert to these.

  • Cutting and pasting last year’s budget into the new year. This approach often misses trends or fails to capitalize on opportunities. If attendance at monthly events was down 50 percent in the first half of the year and up 50 percent in the second half of the year, then just rolling over last year’s budget numbers into the new year could miss a big opportunity. Even worse is a trend where attendance is falling. Or, if your numbers are significantly underperforming in your current budget, why would you roll those numbers over into the new year?
  • Calculating where the organization will likely finish the current year and projecting those numbers into the new year. Although this is less risky than rolling over the previous year’s budget as described above, it also runs the risk of not appreciating trends and doesn’t draw on the trending analysis of the past three (we still like four) years.
  • Saying that budgeting is not the job of the whole board. On the contrary — it is the job of everyone on the board to invest the time and effort to build a budget that brings value to the organization’s members. Leaving the budget process entirely up to the president or a treasurer is not good governance.
  • Don’t exclude your committees. Some of the best structures ask committee chairs to come forward with a budget for the board to review. Committee members often are closest to their activity areas and have the inside line on why (for instance) attendance at monthly meetings was down 50 percent in the first half of the year but up 50 percent in the second half of the year.

What about reserves?
A topic deserving an article of its own: We recommend that our clients maintain cash reserves equal to 1-2 years of operational expenses as the sweet spot for most organizations. If your organization has well-established programs that produce consistent results (the trend band referenced above is narrow), then less reserves are required to accurately project a budget. If an organization has more variables in its budget (a major revenue source is grants, for example), then a hedge toward greater reserves is recommended.

And finally…
Your budget should not be a once-a-year exercise that you do in the fall and then tuck away for the year. Said another way: Do you know everything that’s going to happen in the next 12 months when you adopt a budget? A monthly review of your organization’s financials is terrific discipline to gauge how you are performing compared to your plan. High-performing organizations do periodic reviews and reallocate as appropriate. So if your monthly meetings are drawing 50 percent more attendance in the first half of the year than projected, your organization has the opportunity to capture those excess funds in real time and fund a program or initiative in the second half of the year rather than just letting the extra money sit until the end of the year. You don’t have to spend it — but you can.

Tags:  bill monn  budget planning  ewald consulting  expense  income 

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KNOWLEDGE & RESOURCES

MANAGEMENT | View all Management articles
A Successful Year Starts with a Solid Budget by Bill Monn
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MARKETING | View all Marketing articles
9 Marketing Ideas for Your Organization by Kathie Pugaczewski
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MEMBERSHIP | View all Membership articles
A Holistic Approach to Membership Recruitment by Darrin Hubbard
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VOLUNTEERISM | View all Volunteerism articles
Three Ways to Stronger Volunteer Engagement by Paul Hanscom
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