Managing finances effectively is key to the success of professional membership associations. This could be for an event you are planning, creating new benefits for members, or simply ensuring sustainability, a well-crafted budget is used as the association’s roadmap. A budget will help your organisation to properly allocate resources, control costs, and ultimately deliver the value expected from your members.
Benefits of Budgeting
- Controlling Costs: Prevents overspending and ensures that funds are allocated by priority.
- Transparency: Demonstrates accountability throughout the association, ensuring a transparent view of the association’s finances.
- Priorities: Identifies essential aspects of the association and ensures that they have enough funding.
- Monitoring: Provides a framework for tracking financial progress, identifying when and where adjustments should be made.
Income vs Expenses
Income
For associations, income comes from many different sources. Brainstorm to compile a complete list of income sources – this will help you to create a realistic picture of what the association can afford to spend. Consider:
- Membership Payments
- Event Revenue
- Sponsorship & Advertisement
- Grants & Donations
- Training Courses & Education
Expenses
Expenses can fall into one of two categories, either fixed or variable.
Fixed – cost that remains constant and does not change regardless of use.
- Venue Hire
- AV Equipment
- Marketing and Promotion
Variable – costs which can fluctuate based on the amount used.
- Catering/Drinks Reception
- Printing
- Travel & Accommodation
Planning for Growth
Contingency
All budgets should include a contingency fund to cover unexpected costs or changes in revenue. Set aside money to cover unforeseen expenses, such as rising vendor costs or unexpected opportunities to enhance member value.
Explore Growth Opportunities
Budget for opportunities that will help drive the long-term growth of the association, such as campaigns, professional development programmes, or better digital tools and technology.
Monitoring & Adjustments
Track Progress
Treat budgets as live documents that require constant review. Regularly compare actual income and expenses to your financial projects for the organisation. Adjust the budget based on changes in membership numbers, event tickets sold or sponsorship opportunities.
Use Historical Data
Past financial records are a great indicator on how your budget should look. Use data from previous years to help create estimates, particularly for recurring expenses such as yearly events and ongoing paid for member benefits.
Communicate
Involve board members in the budgeting process to ensure that the association’s goals are aligned. Transparency will ensure that financial decisions support the association’s mission.
Use Tools
There are a plethora of software tools that can help you to budget for your association.
- Membership Management Software and CRMs
- Accounting Software
- Event Management Software
Are you a professional membership association who needs some guidance when in comes to budgeting? If so, get in touch today!
