Program Based Budgeting

As chamber leaders it’s important for us to fully understand our budgets and the budgeting process.

What is program based budgeting?

Simply put, it loads all the costs (i.e., food and beverage, marketing, rent and most importantly staffing) into the equation.

That way you get a true sense of whether a program/event is making money or losing money.

Don’t get caught in the trap of running programs and events that lose money and call it a member benefit.  Don’t laugh, we all do it!

There’s only one exception to this rule that I can think of and it’s your government relations (GR) budget.  That is a direct expense and it is a direct benefit to your members.

One could argue that may be the only reason a number of your member’s join. Chamber’s need to represent their members before elected officials to protect them from onerous regulations.

It’s the monthly luncheons, webinars, annual meeting programs that need to be fully loaded with costs for a proper cost analysis to determine their value, not only to your members but also for the financial stability of your organization.

If it’s not making money, it’s time to sunset the program!

For a program based budget builder from the Wallace Foundation go HERE.

Kicking Sacred Cows To The Curb

Sacred Cows. We all have them in our organizations.

What do we call programs that lose money? A member benefit! Do not get caught in that cycle.

I speak with chamber execs all the time that share their frustration of that new project initiated by the new chairman. We’ve all been there.

When we add new programs, do we delete a program? No. Use these economic times to shed those losers.

I wrote about scorecards in a previous post. Creating a scorecard can be very effective in sun-setting those programs, products or services that: don’t make money; members don’t value anymore, or have become a sacred cow of the organization.

A scorecard to measure the value of your programs, products or services should track at least the following items as a starting point:

• Revenue
• Costs - direct and indirect (i.e., staffing costs)
• Stated goal of program, product or service
• Evaluation of program, product or service by members
• Measure the results

As a sidebar, we should be reminded of the “Hedgehog Theory” stated by Jim Collins in his book titled, Good to Great, and include the theories’ three criteria in the final analysis:

1. Do we have passion for this program, product, or service?
2. Are we, or can we be the best in delivering this program, product or service?
3. Do we make money on this program, product or service?

After you’ve implemented this assessment tool in your yearly review process, it should provide a strong argument on whether to continue a program, product, or service in the coming years – or kick that sacred cow to the curb!

For a previous blog post on program based budgeting go HERE.

Design and Implement a Successful Sponsorship Program

If you're like the rest of your peers around the country securing sponsorship dollars, new and legacy, you might want to review the tips below as you move forward.

JP Moery, President, The Moery Company and Patty Leeman, Chief Analyst, The Moery Company recently conducted a workshop, on the title of this blog!

They structured their presentation around the following four concepts.

• Why do sponsorships matter;
• How to build a new sponsorship program;
• How to assess sponsorship cost vs value; and
• How to sell sponsorships.

My notes from the session are as follows:

Why do sponsorships matter?

Studies show it's a:

• $600 million game
• 75% considering new sponsorships

Sponsorships today meet multiple goals for the association and for the sponsors.

How to build a new sponsorship program?

Data tells, stories enable you to sell - interview potential sponsors, ask them what they want?

Build a program that goes beyond the 3 days at the annual meeting, they want to be connected the other 362 days a year.

Not only do you need to interview potential sponsors, you need to interview staff to make sure you can deliver what you're going to put in the prospectus.

The key is to have consistency amongst your staff to ensure you are delivering the product, and oh by the way, make sure you can deliver what you've put in the prospectus.

You need to start at least six months in advance so you can deliver the product of the sponsorship.

Do you segment your sponsors? Do you know where your sponsorship money is coming from?  How about the bulk of the money?  I bet it's coming from 20% of your list of total sponsors - think 80/20 rule.

How to assess sponsorship cost vs value?

Move to program based budgeting to figure out the real costs. What is the product or program going to cost, not just the cost of the pen, but the staff time to order, put in bags, etc.?

How to sell sponsorships?

The first two things to ask yourself and be mindful of:

1. What is the buying season for the sponsor?
2. When are they flush with money?

Once you've figured that out, it's time to put the other pieces into place. It's important to put the demographics in the prospectus.  Remember, the prospectus is built for the sponsor.

Write the prospectus that answers the business objectives from the sponsors perspective.  Naming rights are hot right now, think podcast, fly-in sponsored by ABC company.

How about the opportunity to speak on a panel?

Thought Leadership Program?  Think content produced over a 12 month period.  This can be very beneficial for both parties.  Pick an issue that is hot in your community.

By the way, don't forget to grow your current sponsors first before chasing that new potential sponsor.  I bet you're already doing this in your membership space. Think tiered dues where you upgrade a member to the next level.

Are you renewing their sponsorship right after the event for the next year when they are on a high from the meeting or program that just finished? If not, you should be.

Are you using a CRM (a customer relationship manager system) to keep track of your communications so you can track your progress with your sponsorship contacts?

Straight from JP, "If it's not in your CRM, it didn't happen!"

And their final thoughts:

• Interview your sponsors;
• Get the data to assist in creating your prospectus;
• Develop prospectus for sponsor audience; and
• Capture all communications in your CRM.

For more information on The Moery Company go HERE.

Are You Still Running Programs That Lose Money?

If you are, stop!

Those are resources you could be spending on programs that make money, and could potentially make more money.

For a previous blog post on How To Stay Ahead of the Competition go HERE.

While it can be tough to drop programs that have a sentimental value, it's time to move on to bigger and better things.

Technology has made us change the way we communicate with our members.

Have you done a complete review of your program of work since this new technology has hit your chamber?

There's nothing wrong with an annual review of your program of work.

You may even consciously decide to keep a program that is losing money. But, you've made that decision for a reason and it's defensible if anyone asks why the chamber continues to do it.

Never forget to run your chamber like a business. Because if you don't, you run the risk of being out of business.

Your members should expect nothing less from you and their chamber!

For a previous blog post on program based budgeting go HERE.

Tips for Creating Programs with a Strategic Purpose

When you're creating a program or event, are you thinking about how it relates to your strategic plan?

Or are you just worried about whether it's promoted properly?

Or are you hitting your numbers for the amount of attendees you budgeted for?

At the end of the day, that's the wrong way to look at this process.

Instead, think about whether this program or event directly relates to your strategic plan/mission and does it make money?  For more information on a blog post I did about program-based budgeting go HERE or about making money go HERE.

The reality is that only 15% - 20% of your members actually attend your events.

As stated in the Horizon Initiative: Chambers 2025 report you need to base your recruiting on the mission and not your organizations events.

Bottom line, let's get out of the special event business and get into the advocacy business.  I know, I take hits all the time when I mention this concept at different venues across the country, but at the end of the day, you need to be the advocate for your members not the special events coordinator.

Consider getting out of the ribbon cutting business, the golf tournaments or the fireworks shows!

For more information on the Horizons Initiative: Chambers 2025 report by the Association of Chamber of Commerce Executives (ACCE) go HERE.

Good luck in changing the focus of your chamber from one of events to one of being the leader in the community through advocacy and community development programs.

Until next time!

3 Steps to Take Before You Sit Down with Your Board to Create a Strategic Plan

The more you prep for your next strategic planning process the better your outcomes will be.

How often do you conduct a strategic planning session or retreat?  How often do you review your strategic plan?

Every year, every other year or once every three years?

Whatever your timeline is, it's important that you do your homework prior to your next retreat.

Here's three things you can do before your next planning session:

• Background materials
• Communicate the process
• Set the stage

Background Materials

Tell the story of your chamber, where you’ve been, where you are now and that will set the stage for where the chamber should go.  Key items to share from a historical perspective should include, but not limited to:

• Revenue - dues vs. non-dues
• Membership numbers - retention rates, etc.
• Program of work - advocacy, economic development, networking, educational programs, etc.

And don't forget to attach real numbers to the above items.  For a previous blog post on program based budgeting go HERE.

Communicate the Process

It's important to be transparent in your strategic planning process.  Get everybody on the same page.  When people know what is expected of them, they will deliver.  Key elements that should be communicated:

• Timing – set a timetable from beginning to end
• Outcomes – set the expectation of what you want when you’re done with the process
• Players - who's responsible and why

Set the Stage

I'm a fan of getting a third party facilitator to run the actual strategic planning meeting. They can keep people focused on the task and it keeps the process business like and not personal.

For a great resource on nonprofit boards from The Bridgespan Group go HERE.

Killing Sacred Cows - Just do it!

How many of you are still doing the same programs, year after year, and you don't know why or you've been told we've always done them?

Are they well attended?

Are you making money?

If not, let's kick those programs to the curb. For a blog post talking about program based budgeting go HERE.

Are you loading all costs towards your program? In other words are you counting the:

• Staff costs;
• Marketing costs (printing, postage); and
• Food and beverage costs or meeting space fees in your final calculation?

...or are you just comparing the receipts at the door (registration fees) vs. food and beverage and room rental at the venue?

Do the full arithmetic and if it's not making money -- kick it to the curb!

Remember, we can't be running chambers that lose money.

We need to run our chambers like a business and run it in the black. Identify your core programs and make them better.

For a blog post on the Hedgehog Theory go HERE.

The theory suggests you should focus on:

• What you have passion for;
• What you do best or can be the best in; and
• Where you make money.

Where those three meet are the programs you should be doing.

Now that's a recipe for success!

Strategy Outside of a Plan

I recently attended a webinar led by Lowell Applebaum, Vista Cova, on the title of this blog post. Lowell is also a faculty member of Institute for Organization Management.

He started out by making the following statements.

• Strategy – a plan of action or policy.
• Strategy Benefits – shared vision, mission. 
• Strategy Deficits – moment in time, these are times of change.
• Strategic Plans – frequency should be a set of direction and goals – very different then the 5-year goals, retreats in the past.

 
Components of a Strategic Plan
 

• History – where you came from.
• Vision – your ideal future, ask your board what they would add, he used the term “additive listening” to create a group vision.
• Organization Vision and Mission – why, leadership litmus test, resonance in affiliation, definition to the external world.  Always put this in front of your board at every meeting.  Use the back of your name tents to remind why your organization exists.  Vision – statement of the future, Mission – how you’re going to do it.
• Identity – who we are and how we act.
• Audiences – know your who.
• Core Values – what makes you, you!
• Core Pillars – your area of focus.
• Unifying Vision – direction and strategy for your volunteers.
• Operational Plan – action items to implement your strategy.

 
Strategy Outside the Plan
 
What are you doing on an ongoing basis to help the strategic plan through everyday results?  He went on to talk about implementing a “Plan Ahead Team” – a group to keep their eye on the future and trends.  Think Foresight!  I did a blog on that topic which can be found HERE.  It’s another way of saying scenario planning.
 
Listening as a Board Competency – he listed a number of ways you can touch base with your membership to get a pulse of what is happening in their industry, which included but not limited to, surveys, monthly calls, member visits, advisory groups, competition awareness, focus groups.
 
Strategic Refresh – what is your vision in the post pandemic disruption that we all have been dealing with over the past 12-18 months.  Get the right people in the room to have this discussion.  Have a plan for a quarterly update/milestones.  In 12 months, what do we want our members to say about us?
 
Core Audiences – who are your audiences?  Create a list.  Most will be your member’s, but you should also have a list of non-members who are your core audiences (i.e., educators, legislators, groups in your community that can’t be members, etc).
 
Program Impact Matrix – do you measure your programs for relevancy?  What a great way to get rid of those sacred cows.  For a blog post on that subject go HERE.  Others call this program-based budgeting, go HERE for that blog post.
 
Creating Space for Innovation – he talked about how we were forced to do this over the past 12 – 18 months.  But are you solidifying this for future growth?  Think risk/failure options on new programming.
 
Building Board Relationships – between the chief executive officer and the board is critical.  Communication is key.
 
Give yourself space and grace!

Chamber of Commerce Mentorship and Coaching Opportunities

A robust mentorship and coaching program can be a cornerstone of a successful chamber of commerce.

It offers invaluable support to businesses, fosters community, and strengthens the overall economic health of the region.

Types of Mentorship and Coaching Programs

• One-on-One Mentorship: Match experienced business owners or executives with aspiring entrepreneurs or business owners.
• Group Mentorship: Bring together multiple mentees with a seasoned mentor for shared learning experiences.
• Peer-to-Peer Coaching: Connect business owners facing similar challenges for mutual support and problem-solving.
• Specialized Mentorship: Focus on specific industries or business stages (e.g., startup, scaling, succession planning).

Implementing a Mentorship Program

1. Identify Needs: Conduct surveys or focus groups to determine member needs and interests.
2. Recruit Mentors: Seek experienced business leaders willing to share their knowledge.
3. Matchmaking: Carefully pair mentors and mentees based on compatibility and goals.
4. Structure the Program: Define expectations, meeting frequency, and program duration.
5. Provide Support: Offer resources, training, and ongoing communication for both mentors and mentees.
6. Measure Success: Track program outcomes and gather feedback to improve.

Potential Mentorship Topics

• Business planning and strategy
• Financial management and budgeting
• Marketing and sales
• Human resources and talent management
• Operations and efficiency
• Technology and innovation
• Legal and regulatory compliance
• Succession planning

Additional Tips

• Leverage Technology: Utilize online platforms for matching, communication, and resource sharing.
• Create a Supportive Environment: Foster trust and open communication among participants.
• Recognize and Reward: Acknowledge the contributions of mentors and mentees.
• Promote Success Stories: Share positive outcomes to inspire others.

By investing in mentorship and coaching, your chamber can create a thriving business community where members can learn, grow, and succeed.

Managing Your Sponsorship Opportunities

I recently participated in a webinar on sponsorships hosted by ACCE and conducted by Sydney Doctor and Alana Turner of Greater Louisville, Inc.

Here are my notes from their talk in no specific order.

Centralize - think about centralizing your sponsorship activities under one person so you can provide a consistent customer experience throughout the conversation with all potential sponsors.

It’s more than an event, it’s a revenue generator and you need to think about it that way.

Less is more!  Focus on what events work best for your chamber and has a positive revenue impact on the bottom line.  Get rid of the rest.

A couple of thoughts on the process:

Do you offer a first right of refusal to those sponsors from the previous year?  If not, you must.  That’s just good business.  And you should ask that question right after the event is done when they are riding high.

Do you have an investor pool - create a list of possible companies who might want to sponsor an event?  Please know that not all investors will take that additional step to sponsor an event in addition to their normal support.  That’s ok, but let them know they always have the opportunity to do so in the future.

Do you have a brochure with a list of sponsorship opportunities with dates, times, and a description of the audience that will attend?  This packet of information needs to be digestible for any potential sponsor.  And you must share it with your members and non-members alike.

When to ask?  I’m a fan of working on a calendar year vs a fiscal year basis.  Start asking in October for the following year and this will allow you to finalize any sponsorship deals by January.

Once you’re in the new year you can always backfill at each event with possible new sponsors to meet or exceed budget.

Alignment:

Do you promote your events around themes?  Technology, Leadership, Finance, B2B just to name a few!

You can pitch sponsorship deals to companies who care about that subject matter and are thought of as thought leaders in those sectors.  That’s a win win!

How about content generation from potential sponsors?  It allows you to showcase your sponsor as an expert in the field and create content for the newsletter, magazine, website for the coming months.

They mentioned that your sponsorship fee should at least cover the cost of the event.  Registration fees should be all profit.  And remember, always load all your costs, not just the price of food/beverage and the rental of the room.  You must include staffing, marketing, etc.  It’s called program-based budgeting.

For a previous blog post on that subject matter go HERE.

And don’t forget about trade-outs for your bigger events.  Think AV costs that could run into the tens of thousands of dollars that you could trade for a sponsorship.

Final thoughts and suggestions:

Ask your potential sponsors what they are looking for from the sponsorship. Make a list.  Delivering on that promise will help you retain that sponsor for next year and the years ahead.

Don’t be afraid to customize your opportunities to get that sponsor.

Do you recap your events with pictures to showcase your event and sponsors on social media?  That’s a great way to also promote the sponsor at the same time.

At the end of the day, the sponsorship should work for both of you. Think partnership not just a transaction.

Good luck!