Beyond budgeting

Time was that the average association set a budget around departments or functions and called it a day. That's not to say that associations failed to look at programmatic bottom lines. More often than not, they were able to look at the revenues that their programs brought in, but because not all costs were allocated specifically to programs, they were unable to fully assess the true profitability of their programs or even whether they were channeling enough of their resources into initiatives that their strategic plans said were important.

Today-for reasons having to do with economic conditions, available resources, and return demanded, among others-that approach is changing. Some associations have adopted a method called program-based budgeting. I've heard program-based budgeting described as aligning strategy and resources. That characterization seems apt. Simply put, program-based budgeting involves identifying top-priority programs and fully allocating costs-- salaries, material expenses, overhead, and so forth-by program. The most strategically important programs get the most resource support. One of the greatest benefits of applying program-based budgeting...