When The Bottom Line Is The Bottom Line

As discussed in another post, an event’s financial outcome is only one factor to consider when assessing an event.  Today’s post takes a closer look at how to use Profit and Loss (P & L) statements to measure an event’s financial health.

  • Tie expenses to each specific occurrence of an event, even if the expenses occur in a different fiscal year than the event itself.  This allows you to assess each event occurrence on its own financial merits.
  • Code expenses to different categories to provide a better look at how you’re spending our money.  Category examples should fit your event and organization, but could include:
    • Office/Printing/Postage
    • Advertising and Marketing
    • Travel
    • Honorarium
    • Supplies
    • Miscellaneous (a catch-all category…don’t use it for too many items, but it’s usually helpful to have it for one-off expenses, etc.)
  • Separate program fee revenue from other revenue.  This allows you to determine how the event would fare on program fee revenue alone as well as reflect on what other supplemental revenue streams (ex: merchandise sales) you might want to consider.  When considering  supplemental revenue streams, remember:
    • Providing value for attendees is important.
    • Fostering a perception among your attendees that you are providing value is vital.  Beware of creating a “nickel-and-dime” culture.
    • Merchandise with event information (ex: t-shirts, bags) can provide a financial benefit of advertising as well as strengthen a connection between the participant and the event.  Perhaps these benefits even justify providing some items free of charge rather than selling them.
    • Include attendance figures.
    • P & Ls show each event’s margin (bottom line divided by revenue).
    • Keep historical data so you can view an event’s financial outcome in the larger context of how it’s done in other years and explore reasons for significant differences.

Update the P & L monthly, to track an event’s financial health both before and after it occurs.  Also take a more in-depth look in an annual “fully allocated” P & L in which you include the program revenues and expenses as well as estimates of labor costs within your office (based on how much time each individual spent on that event).  This provides a more detailed analysis of an event’s financial impact to your company and your stewardship of the resources required to plan and hold it.

So, how do you measure an event’s financial health?  What ideas can you share?

For What It's Worth…Was It Worth It?

Your event is over and you’ve (mostly) recuperated from the physical and mental demands of planning and holding your event.  Was it worth it?

Here are three key factors to consider when answering this question:

  • Results: Was the event’s purpose (which is likely aligned with the organization’s purpose) achieved?  For a Christian event, were the spiritual purposes of the event accomplished?
  • Feedback from attendees:  Consider both anecdotal and more formal responses, like surveys, that you requested.
  • Financial Outcome: In this area, the bottom line is, well, the bottom line.

Whereas secular events don’t hesitate to include all of the above factors when assessing an event’s worth, sometimes Christians are hesitant to consider the financial outcome because it doesn’t seem as spiritually-focused as the others.

In our office, we always consider the financial outcome along with the first two factors once an event concludes.  We do this not only because we are part of a self-sustaining ministry that must fund itself through business principles, but also because the Biblical principle of stewardship encourages us to use our funds, time, and talents in a wise manner.  “It was worth it all if only one life was changed” has merit, but so does considering how we might have an even greater kingdom impact with the resources consumed by that event if we apply them differently in the future.

We don’t expect every event to be financially profitable every year, as potential for growth and future impact are always considered.  And, the profitability of an event does not automatically trump other considerations when determining an event’s worth, as there are numerous events we could plan that would be financially beneficial but not align with our purpose.  An event that falls within the intersection where attendees’ goals are met, our purposes are accomplished, and we exhibit wise stewardship has the potential to greatly impact lives both now and in the future.