CHAPTER PLAYBOOK

Budgeting & Reserves

A budget is essential to managing a Chapter, and the Treasurer should work with the executive committee and staff to develop an annual budget. The budget is an important management tool and shows your members how their dues are being spent. Your budget should be reviewed and updated throughout the year to pinpoint any variances or trends. To help prepare your budget, click here for a budget template.

Creating a budget should begin with a listing of activities/goals of the Chapter, as well as an evaluation of the Chapter's sources of income. You should also review the current year's projected revenue/expenses vs. actual revenue/expenses. 

When budgeting for membership dues, budget conservatively. If your planned expenditures will exceed your projected income, it may be necessary to increase membership, generate non-dues revenue and/or cut back on any planned activities.

Lastly, meet with your leadership team and discuss their ideas and estimate the anticipated revenue and the costs of executing them. Once everyone agrees to a final list of objectives, create a budget by assigning appropriate dollar amounts to each budget item.

Once the budget is approved, it is the President's responsibility to ensure the board, committee chairs and staff work within the budget. The Treasurer must also deliver a monthly financial report to the board. The board should review and approve financial statements at least quarterly. 

Chapters should maintain a minimum of six months and no more than 18 months of operating expenditures in reserves. If your Chapter has more than 18 months of operating in reserves, you may be asked to submit a plan for how you will invest those resources over the next few years. To determine the months of operating expenditures in reserves, divide your unrestricted reserves by your annual expense budget. If your Chapter has more than 18 months of operating expenditures in reserves, you should be investing back into the Chapter by budgeting for an operating deficit, with a plan to spend down reserves over the next three years.

State Chapters should have a diverse revenue portfolio. NAIFA recommends the following allocation of revenues:

State Chapters should invest in staff, programs, marketing and government relations to deliver a quality member experience, increase membership and maintain a robust state government relations program. NAIFA recommends the following allocation of expenditures:

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Budget Template