As an amateur chapter leader, my goal was to run our local chapter on a dime. I would beg, borrow, barter and personally fund some of the activities that we performed. This worked well when I led a small club and my output – if any – was minimal. I later moved to a larger city close to my university. The club was very active with a large number of local alumni. The days of funding things on my own was over! I was lucky enough to be on a board with financial professionals who knew how to create and manage budgets for non-profits. We built their tips and practices into our annual budgeting activities. In this week’s post, I share what I’ve learned from them about creating a chapter budget.
Think About the Whole Year First
When preparing your budget, think about the whole year first. Look at your prior year’s bank account to get an idea of the expenditures and revenue for the chapter. This big picture view can help you find the types and timeframes for the kinds of expenditures and revenue the club takes in. List these categories with the approximate month or quarter in which they occur.
Don’t have prior year’s information (yet)? No worries. Use your upcoming year’s calendar (and my suggestions below) to find areas where you may have costs or revenue. Use my Club Calendar Planner throughout your upcoming year to capture costs and revenues so that you’ll have a record to use the next time you plan your budget.
And on that note creating your annual budget should happen at the same time as the chapter is planning its upcoming year’s events. This helps to tie events to their costs associated so your budget reflects your plan. Check out my post Alumni Chapter Calendars: Plan Your Chapter’s Events for tips on planning your annual event calendar.
Most alumni clubs I’ve worked with are run on a dime with slim-if-any money left over each year. Even so the club must take in some funds if you plan to do any activities. What are those revenue sources and where do they come from? Spend some time identifying those as a first step.
One source could be chapter dues. Some universities will allow chapters to collect dues. This regular revenue can be used to operate the club and fund its events and activities. But chapter dues can come at a cost. Determine how much you plan to take in and account for, if applicable, any late fees or bank charges that may be involved in the collection of dues.
If you don’t collect dues, never fear. Look for other ways you might collect funds to operate your club and cover expenses in my suggestions below.
Do you have a subscriptions or expenses that repeat each year? List all the payees, amounts, frequency and dates on which they occur. Also note if the expense auto-renews or if a club is billed for the cost. Funds must be available in the club’s bank account to cover repeating expenses so knowing about auto-renewals can avoid any unexpected bank charges or loss of service.
Another source of recurring costs can be costs associated with running the club such as supplies and training. For example, if your university provides leadership training, you might consider providing a stipend to chapter leaders who may travel to that training. Covering mileage or the cost of a hotel room can make training more accessible for your current and future chapter leaders. This investment can mean a lot to others who are interested in being part of the chapter’s leadership.
A few times a year we purchase Facebook ads for some of our events (check out Promote Your Alumni Event with a Facebook Ad and Promote Your Alumni Chapter’s Events by Boosting Facebook Posts for more info on how to purchase these). We put a static amount in our budget each year to cover those ads. You may have similar costs such as printing flyers, email marketing tools or sending postcards. Place an amount in your budget for these costs. Adjust this cost annually to account for increases in postage, subscription costs and so on.
Event Expenses & Revenues
Hopefully, many of your events are either free or paid for by event fees or alumni association dues. Even when that’s the case, the chapter may need to pay for venue costs, prizes for raffles or supplies like cups and plates. Take a look at your calendar of events to see if there are other events which may require the club to make purchases.
Your calendar will also be your source for determining which events can or will take in money. That revenue may be used to fully fund the cost of the event but you may also be able to determine if you can build in a small amount to cover other event costs. For example, we get a big block of tickets when our basketball team comes to town. The host university sells us the tickets and the chapter is responsible for distribution. We build a handling fee into each ticket to account for the cost of the overnight delivery of the tickets to us, supplies needed to distribute the tickets and a little leftover to apply to a pre-game ticket distribution event. Being able to plan this in advance avoids having to come up with the funds at the last minute or having to cover the costs from another source.
Rainy Day Money
We set aside a percentage, rather than a dollar amount, of our overall budget for a “rainy day.” Typically, this money will be used to make a down payment for some of our events where we will collect funds but need to put money down to hold the event, such as a venue deposit. We may also use this money for unplanned expenses or event opportunities that come up. Any unused rainy day funds may be applied to our scholarship dollars at the end of the season or held in the account to be used during the next chapter year.
Before you finalize your budget, I recommend putting a target in your budget for fundraising revenue. This target is not your overall fundraising goal but is how much money you can contribute through event fees, chapter dues, raffles, etc that are not specifically donated.
Another target amount I recommend is a threshold above what the chapter needs for its operating expenses that will be donated for a university cause. My alumni chapter raises funds throughout the year as part of our events. During our annual budgeting phase, which happens just before our scholarship commitment date, we assess what we’ll need in operating expenses for the next year. Any overage above those operating expenses is added to our scholarship dollars. In recent years this has resulted in the chapter being able to offer one more full scholarship on top of the ones provided through our formal fundraising activities. If your club doesn’t have a scholarship program work with your chapter coordinator to find an organization within the university that could use your donation.
Budgeting is a critical responsibility of the chapter’s leadership team. Follow these tips to make budgeting a repeatable activity so that you can fund future activities and achieve your club’s financial goals.