You’re six months into your fiscal year. There has been a lot going on with hosting the first in-person annual conference since the start of the COVID-19 pandemic, the continuation of virtual events launched in the last couple of years, resuming face-to-face board meetings, plus the usual day-to-day operations. You know your Director of Finance keeps a close eye on the financial side of things, so with all the other work to be done, you haven’t taken a close look at financial results. With the preparation of next year’s budget rapidly approaching, now is a great time to pause and evaluate how your budget now can shape 2023 by focusing on the performance of current programs and initiatives to determine viability, value to members and use of resources.
When considering viability, start by looking at the profitability (or lack thereof!) for the program. Be sure to include the cost of staff resources to support the program. What changes can be made to improve the viability of a program (e.g. process efficiencies, pricing, cost savings). A best practice is to have a separate financial schedule for each program that tracks all revenue sources (e.g. registration fees, sponsorship) and expense categories (e.g. audio-visual, speaker fees), so you can easily see results.
Once viability has been reviewed, consider the value of the program to your members. There may be instances where a program loses money, but is highly utilized and valued by members. Look at your strategic plan to see if that program is a high priority. If so, you may want to continue despite the financial shortfall. If it is not a priority, what initiatives are in the strategic plan that should be considered to increase membership value in the coming year.
Available resources are primarily time and money, both of which are limited. For that reason, you need to carefully consider how those resources are utilized. The annual budget and the strategic plan are tools to help determine how to allocate your organization’s staff time and available funds. Alignment of the two will ensure your organization is on track to fulfill its mission. Which Comes First: The Budget or The Plan provides more insight into aligning the budget with the strategic plan.
Take some time now to consider how your current programs and initiatives can be improved to shape your 2023 plan. Review this year’s financial results, and consider the viability of your programs. Evaluate the value of your programs, both old and new. And most importantly, confirm that resources are being utilized to fulfill your strategic priorities.