As associations move forward, they must plan budgets even though meetings, sponsorships, and professional development products are on uncertain footing. Experts recommend using lessons from today to help with budget expectations for tomorrow.
Much of an association’s nondues revenue comes in the form of sponsorships, meetings, and professional development and certification dollars. Unfortunately, these funding avenues relied heavily on in-person contact previously. When looking ahead to budgeting for 2021, focus on lessons learned this year, say experts who spoke at the webinar What Will You Need to Budget for the Unexpected?
Dawn Gannon, MBA, CAE, a senior program manager at Virtual Inc., said making certain decisions in advance can help organizations better plan their budgets. For the Academy for Eating Disorders, where Gannon serves as deputy executive director, deciding soon after the pandemic to cancel its 2021 in-person event—instead hosting a 2022 meeting at the same location—allowed the group more budgetary certainty.
“Having made the decision to host 2021 virtually so far in advance was a godsend,” Gannon said. “For 2021, we can plan accordingly, knowing what to expect in terms of expense. … There were a lot of challenges that we’ve already experienced now [in creating a virtual event], and that helps us budget for 2021 and beyond.”
Part of budgeting for the future includes avoiding shortfalls due to lost revenue this year. For example, the American Association of Pharmaceutical Scientists moved its corporate sponsor program from conference-based engagement to year-round engagement in recent years. “We saw partners having a really tough time completing their ROI in 4 days [of a conference],” said Erik Burns, Ed.D., MBA, AAPS director of corporate engagement. “That gave us 365 days to be better partners.” That mentality helped AAPS retain revenue despite canceling their in-person meeting because of the pandemic.
“We were able to retain 73 percent of our revenue between 2020 and roll over to 2021,” said. “We only had to refund 27 percent for the coming year.”
AAPS is budgeting flat for next year, expecting retraction in some areas, but growth in others. “Last year, we sold one webinar,” Burns said. “This past cycle, since March, we’ve sold 16 webinars; that’s created roughly $55,000 in revenue.”
AAPS created some new engagement opportunities for sponsors to keep revenue flowing. “We created products and vehicles for those partners to engage with,” Burns said. “We built 90-minute webinars, but we also know our audience enough to address the fact that not everyone globally can sit on a 90-minute webinar. So, we created eChalk talks, which are half-hour presentations.”
J. David M. Rozsa, ACA, CAE, CEO of Metacred Inc., which specializes in credentialing programs, noted that associations that were unable to move to virtually proctored exams for their accreditation programs had losses that will impact future budgets.
“Those organizations took a significant hit, about two months out of their annual budgets this year,” he said. “They just don’t have revenue to invest in some of the certification exam development activities that you would normally do cyclically, like develop a new program, revalidate an existing program, refresh your exam questions, [or] update your authoritative references.”
As the pandemic affected industries differently, it’s important to look at how that impact might affect revenue generated from credentialing.
“Is the profession that you’re certifying, or the type of industry you’re accrediting, one that is super busy right now and doesn’t have time to pursue a credential?” Rozsa asked. He noted, for example, that some medical professionals are too busy dealing with COVID-19 to devote time to study for and take credentialing tests.
“For those super busy professionals, certification revenue is probably down for the next year, until there is a handle on the pandemic,” Rozsa said. On the flip side, “for those professions that are largely out of work—like people in the restaurant or travel or meetings industries—those people may or may not be investing in getting certified right now. The good news is they have time; the bad news is they don’t have money.”
As the future remains uncertain because of the pandemic, try to budget a cushion for unexpected expenses, if possible, Gannon said. “Is there a miscellaneous line in my budget for 2021?” she said. “Right now there is. I don’t know how long it’s going to survive, [but] I think you need to have a ‘what if’ line.”
What factors are you considering as you budget for nondues revenue in 2021? Share in the comments.