“Steady as she goes” is usually pretty good leadership advice. But that doesn’t mean deciding you’re not going to look out for icebergs.

When I was working on my story about budgeting blind spots in associations, I was struck by how often experts lamented what you might call copy-paste budgeting. How much should you allocate for meetings next year? Too often, the answer to that question is taking whatever last year’s numbers were and plugging them into the new budget.

Without a plan, assumptions in the prior budget carry over, unexamined, into the new one.

Craig Silverio, CAE, vice president, finance, at PMMI, keeps a close eye on the kind of inefficiencies that kind of behavior creates. Every meeting has its own particular demands, financial and otherwise, he says, and large events can send expenses spiraling upward quickly. ““We have now instructed our meetings department to break out each and every event, down to the breaks,” Silverio told me. “Literally creating worksheets of how many counts we expect, working with the hotels when we have their menus of food and beverage costs, and understanding what the service charges are—that can be another 30 percent on top of your food and beverage.”

There are plenty of effective ways to keep a lid on runaway budgets, as the story explains. Zero-based budgeting, for instance, can remove the copy-paste mentality and force departments to think more carefully about their budget lines; tracking rolling averages for budget lines over the past few years can provide reasonable budget targets to aim for.  For certain projects, it may make sense to assign a particular person—not a group or committee—to mind the numbers and be the point person for concerns. “Having someone who’s responsible and held accountable from a budgetary perspective is important,” says Lee Klumpp, director, national assurance, nonprofit and education practice, at BDO. “The idea is having somebody responsible for the accounting, tracking, monitoring, oversight from the financial perspective on the project.”

But thinking about budget issues strictly in terms of how dollars get allocated and monitored is to miss the point to some extent. Blind spots exist, practically by definition, because an organization misses something coming—and that is more likely to happen when an organization isn’t sure where it’s going. Budget issues are interwoven with environmental scanning and strategy-setting; a clearer sense of direction can help you anticipate headwinds, whether it’s changing technology, industry automation, shifting demographics, global issues, and more.

Patrick Nichols, president of Transition Leadership International, says bad budgeting is often a function of poor planning. “Most of my Interim CEO clients over the years do budgeting quite apart from any narrative plan,” he says. “Some don’t have any such plan. The almost inevitable effect is that assumptions in the prior budget carry over, unexamined, into the new one.”

To that end, the association CEO’s role isn’t just minding the overall budget, but understanding how the association’s strategy interacts with it. The board could stand to press the point a little more as well, on the evidence: A 2015 study of nonprofit directors showed that while a strong majority (82 percent) are satisfied with the financial reporting they receive about the organization they serve, more than a quarter say board members “do not have a deep understanding of the mission and strategy of their organization.” That suggests a troubling disconnect. An easy satisfaction with an organization’s numbers, combined with a lack of awareness of direction, is a recipe for rubber stamping and neglect of the trends that challenge associations.

Good budgeting practices can help an organization avoid the worst financial fates. Better still, though, is to match good practical budgeting with good thinking—about how each budget line helps serve the organization’s mission, what’s changed since the last time that budget line was drawn up, and what is likely to change it in the years to come.

How does your organization handle budgeting, and how do you go beyond plugging in last year’s numbers to do it? Share your experiences in the comments.

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