Contingency budget

A line item held back for costs you could not foresee: a quote that lands higher than the estimate, a supplier who disappears, weather that forces a rental you never planned for. It is not spare money and it is not padding, it already has a job, and the job is called something went wrong. It belongs in every tier of a Good/Better/Best budget, not just the top one, and it is the last line you raid, not the first. Practitioner convention puts it at roughly 10 to 15 percent of total spend. Its close relative on the contracts side is the force majeure clause, which limits what you owe when circumstances outside anyone’s control kill the event.

Source: Practitioner convention, flagged in this course’s source review as unverified. The 10 to 15 percent range is repeated widely across event planning writing, but no authoritative published source stating that range was found, so this course teaches it as a habit to adopt rather than a number to cite. What is directly sourced: the TEDx Organizer Guide instructs organizers to “account for contingency, taxes, and incidentals” when planning a budget, and to overestimate costs at about 1.5 times a normal guess. On the Whova Event Insider panel on event budgets, organizers name a roughly 10 percent contingency alongside a force majeure clause as what carried their events through COVID era cancellations, which is practice reported by practitioners, not measured evidence.

First used in: 1.4 · The money: three-tier budgeting.