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Integrated Financial Planning for Private Clubs

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Our article below appears in the 2019 issue of Club Perspectives produced by Judd Brown Design/Jefferson Group Architecture

Integrated Financial Planning for Private Clubs

Private club revenue streams and outflows generally come in two flavors – operating and capital.  Operating flows typically relate to current year operations while capital flows should relate to maintaining, modernizing and expanding the net fixed assets of the club over longer periods of time.  We refer to the net fixed assets (the cost of all assets less accumulated depreciation) as being the club’s “Capital Base”.  As former long-term club Board members, Treasurers and Presidents, we’ve advanced this approach for more than a decade.  In our opinion, consistently expanding the Capital Base over time in a prudent financial manner is the truest indicator of good governance and a club’s financial health.  Facilities need to be maintained and upgraded in order to attract discriminating new members in a market filled with attractive options.  That expands the Capital Base.  The ability to afford it all in a prudent manner suggests a robust, satisfied and supportive membership.

Financial Planning for Operations and a Long-Term Capital Plan

We routinely preach the need to invest in capital improvements and doing so in the context of a long-term capital plan.  However, we don’t stop there, a long-term capital plan is just one component of planning.  In addition to the capital outlays, campus modifications alter operating cost structures and requisite membership assumptions.  Operating and capital flows are the yin and yang of club management.  They require side-by-side planning.  They should not be viewed in isolation.  We refer to long-term financial planning for all capital and operating funds as “Integrated Funds Planning”.  It’s easy to think “we’ll just budget operations to break-even” or “increased volume will cover the costs”, but it is never that simple in the real world.  Operating cost structures and the membership census projections must change along with facility upgrades.  These have a related and critical impact on operating dues.  Member operating dues have a cascading effect on existing member retention and new member attraction.  That brings us back to census projections.  All capital and operating assumptions and projections must work in harmony. Thank heavens for Excel!

Some clubs fail to carefully segregate operating revenues from capital levies (initiation fees, capital fees, special purpose fees and assessments).  The boards of these same clubs often unwittingly commit the same dollar more than once when they don’t maintain the bright line distinction between capital and operating funds and simultaneously develop plans for both.  An Integrated Funds Plan requires the projection of all funds and is a critical element of control in helping a club plan for a sustainable future.

A capital plan is great, but it is only half the story.  You need a five to ten-year Integrated Funds Plan to preview the whole story.

For further information please reach out to Joe Abely at jabely@cbpros.com or 781-953-9333, or Dave Duval at dduval@cbpros.com or 617-519-6281.


Dave Duval and Joe Abely, the founders of Club Board Professionals, LLC, are both CPA/MBAs with more than a dozen years each of private club board experience as directors, treasurers and presidents.  They successfully honed their skills while guiding highly-successful transformations of their clubs during challenging markets and economic times.