Last week, we talked about where and when to start working on your 2017 annual budget (ICYMI: it’s now!). Other than needing time to start crunching your numbers and making predictions for 2017, and that you’ll likely want to review the budget a number of times with your board and finance committee before getting an approved budget in place, there are a number of other factors to consider outside of normal operations.
The items below address things to think about on your expense side; but, on the flip side, beware of arbitrary decisions to increase your revenue! Anticipating an increase in membership revenue, for example, when you have no basis to confirm it will increase is a great way to stay positive and think big and may keep your budget in the black – but not your actuals. Membership and event revenue should be carefully budgeted before proposing an increase.
That having been said, here are four of Redstone’s recommended considerations when creating your budgets this fall:
Strategic planning – Is your association due for a strategy session? If so, consider if you will be doing this in person, and if will you need to cover the travel and accommodations expenses for your board. Will you need to factor in the cost of a facilitator? This infrequent expense is sometimes something a board may already be well into the fiscal year before considering. The fall season is the time to look at your strategic plan and determine whether you should budget for a session in 2017.
Board meetings – How many in-person board meetings are you planning on having? Many boards find that in-person meetings are the most productive. If you anticipate having some wiggle room in the budget, it may be worth reallocating to your board expenses in order to hold them in person more frequently. Alternatively, online collaborative and meeting tools have come a long way in the last few years. If you’re not already using a tool that facilitates remote meetings, it may be time to invest in one.
Membership dues and event registration fees – When is the last time you increased the cost of your membership? There are lots of factors to consider before making this decision: Are your members anticipating budget constraints in the next year? Has your membership dropped in recent years? On the other hand, if you haven’t increased your due in several years, consider the factor that you’ve been bearing due to inflation on the expense side. If you have a large membership, even a small increase may significantly increase your revenue.
Technology needs – If your budget doesn’t already have a line item for technology, you should create one. This can be anything from putting funds aside to redevelop your AMS, to a front-end design refresh, to investing in a new tool or platform. You may not use it every year, but if you don’t it can be placed in a technology fund reserve for when you will need to do an inevitable update.
These are just a few examples of areas to consider when building your budget. Has your association come into any other unexpected expenses that may not have been considered in your budgeting process? Share your experiences with us!