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Your Association Budget is a Living Thing – Nurture It

Posted By Mary Le, Friday, March 18, 2016

Your Association Budget is a Living Thing – Nurture It

By Bill Monn, Vice President of Client Relations

 

To the good fortune of most non-profit professional associations, there are dedicated volunteers who work hard to create a budget each year. Usually this small group of approximately 1-3 individuals appropriately gauges revenues and expenses to meet the needs of the association’s members and presents it to the board of directors. After a tweak here and there, the budget is approved.

Unfortunately, many well-intentioned associations then spend much less time keeping track of their budgets and changes that invariably are needed as the year progresses. I don’t know of any association that can project everything that is going to happen in the next 12 months when it is finalizing its budget. The cost of food at your conference went up more than you projected, more members joined at a higher rate than you thought, the president couldn’t attend a conference that was budgeted because of a schedule conflict – the list goes on.

We suggest that you look at your budget regularly and take note of the variances. A suggestion that is incredibly useful for budget planners is to include line items for “Unbudgeted Revenue” and “Unbudgeted Expense.” This allows keeping track of the “stuff that happens” during the year that too often impacts the numbers but is not documented. This way you and future board members can remember why a certain year was a bit (or a lot) better or worse than projected.

Good treasurers are worth their weight in gold. They are inclusive and approachable. They provide the board with easy-to-understand summaries and recommend areas that may deserve attention. They provide pertinent information and support healthy dialogue. Treasurers who are suspicious of questions, power-driven, or hoard information often bring more negatives than positives to an organization.

A final thought: do a mid-year review and recalibrate your thinking as needed. In plain English, if you over-spent in one area then you need to account for that and spend less in another area. If you earned more than expected, what are the areas where you can still invest this year to advance your mission? This recalibration will help you get to year-end without big surprises and position the association for a more informed budget conversation in the future.

 

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KNOWLEDGE & RESOURCES

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A Successful Year Starts with a Solid Budget by Bill Monn
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