Employee Resource Group Budgets: Best Practices for Maximizing Funds
Updated: Mar 20
Employee Resource Groups (ERGs) play an important role in promoting diversity, equity, and inclusion (DEI) at work. They help build community, attract great talent, and keep employees engaged. However, even the best ERGs can struggle without proper funding.
Recent research from The Rise Journey shows that 21% of ERGs operate with no budget at all, while many others receive funding that falls far below what they need. Another study found that "more funding" was the most requested improvement (61%) in ERG programs.
But how should ERG budgets be determined? There’s no one-size-fits-all answer. The right budget depends on the group’s goals, size, and the activities planned.
What is an Employee Resource Group (ERG) Budget? Why Does It Matter?
An ERG budget is a financial plan for how to spend money on an Employee Resource Group’s activities over the year. It makes sure the group has the funds needed to run events, communicate with members, and support its overall mission and initiatives.
What Should Be Included In An ERG Budget?
A solid and well-planned ERG budget typically covers:
Events & programming: Costs for speakers, workshops, networking events, and employee engagement activities.
Marketing & outreach: Promotional materials, internal communications, branding, and recruitment efforts.
Technology & software: ERG management platforms, virtual event tools, and communication software.
Professional development: Leadership training, mentorship programs, and career advancement initiatives.
Operational & administrative costs: Meeting supplies, catering, venue rentals, and any logistical needs.
Having a clear budget helps ERG leaders plan spending and show how their work benefits the company.
How is Money Allocated In an ERG Budget?: Four Effective Approaches
Organizations use different approaches to allocate funds to ERGs. Some take a standardized approach, while others provide flexibility based on engagement levels. Here’s how ERG budgets are typically distributed:
1. Equal allocation
In this budgeting approach, each ERG receives the same amount of budget at the start of the year. The ERG leaders can decide on how they would like to utilize the budget over the course of the year. In this approach, all ERGs are treated equally irrespective of the number of members of each ERG.
2. Per-person allocation
In this approach, funds are allocated based on membership numbers. For example, if $10 is allocated for every member, then an ERG with 1000 members receives a budget of $10000 and an ERG with 500 members receives $5000. This approach encourages ERGs to increase their membership numbers.
3. Activity-based allocation
Funds are requested for every event or activity that the ERG wants to undertake. A detailed proposal justifying resource needs is shared with the ERG Program Manager and funds are allocated after approval. ERGs that are more active and that plan out ERG events well in advance benefit from activity-based allocation.
4. Hybrid
This approach combines elements of the other approaches as per the needs of the organization. All ERGs can have an equal budget or a baseline funding per member while offering additional grants for specific events or activities. Advanced ERG management software can help manage budgets by tracking spending and handling approvals automatically.
Tips for Tracking Your ERG Budget Effectively
Managing an ERG budget means tracking expenses to maximize impact, and justifying future funding. Without a clear financial plan, ERGs risk overspending, underutilizing resources, or failing to justify future funding requests.
Here’s how to stay on track:
Use a budget tracker: Keep a running log of expenses, allocations, and approvals to avoid overspending or underutilization.
Hold regular check-ins: Monthly or quarterly financial reviews help ERG leaders assess budget usage and adjust as needed.
Leverage ERG management software: Platforms like Teleskope provide automated tracking, real-time budget overviews, and approval workflows.
Demonstrate ROI: Presenting data on engagement, event attendance, and employee retention can strengthen future funding requests.
By tracking expenses proactively, ERGs can ensure that every dollar contributes to their mission and long-term sustainability.
Four Best Practices to Stretch Your ERG Budget
Want to make every dollar count? Here are some practical ways to stretch your ERG budget and maximize impact:
1. Seek sponsorships
Partner with relevant internal departments or external vendors to share event and program costs. For example, an ERG can work closely with the Marketing department to share their insights on consumer behavior and partner with them on an event, thus, leveraging the department's resources for increasing ERG visibility and membership.
2. Multi-ERG events
Collaborate with other ERGs to pool resources and host joint events.
Such collaboration provides ERGs with high membership numbers with much-needed resources for large-scale events while providing visibility to smaller ERGs and helping them utilize their budgets more effectively. Multi-ERG events can be easily planned and executed with the help of ERG management software like Teleskope.
3. Get creative
Explore low-cost or free alternatives for professional development sessions, communication tools, and event venues. Support local businesses and entrepreneurs from marginalized communities to share their stories and patronize their products and services.
4. Use the right technology
Track the impact of your activities and demonstrate ROI to secure future funding.
Investing in an ERG management platform can benefit all ERGs as it reduces the hours spent by ERG Managers and Leads on manual, repetitive tasks. The long-term benefits of investing in ERG software outweigh the initial investment amount by consolidating multiple tools used for administrative purposes.
For an ERG to get funds and budget allocation, it needs to demonstrate the value it adds to the organization. When ERGs contribute as Business Resource Groups (BRGs), their strategic value becomes evident to senior leaders, stakeholders and other decision makers.
By exhibiting an impact on business objectives such as employee satisfaction, employee retention, employee performance and inclusion at the workplace, ERGs can secure their place in the organizations.
Avoid These ERG Budget Mistakes
Even well-funded ERGs can struggle with budget management. Here are some common mistakes ERG leaders make, and how to fix them:
Not using the full budget. Unspent funds may result in budget cuts for the next cycle. Plan spending strategically throughout the year to ensure full utilization.
No alignment with business goals. If ERGs don’t tie activities to company objectives, leadership may question the investment. Connect ERG initiatives to KPIs like employee retention, engagement, and productivity.
Lack of transparency: If ERG leaders don’t track or report budget usage, securing more funds becomes difficult. Maintain detailed records and share updates with stakeholders regularly.
Overspending early in the year: Some ERGs exhaust their budget too soon, leaving no funds for later initiatives. Set quarterly spending limits to ensure financial sustainability.
Avoiding these pitfalls ensures ERGs maximize their impact while maintaining credibility with leadership.
Examples of How Companies Successfully Manage Their ERGs Budgets
Source: Webinar on leveraging ERGs (Watch the complete webinar here)
In this video excerpt, ERG Program Managers and DEI experts from Takeda Pharmaceuticals, Labcorp and Mass General Brigham discuss how they manage ERG budgets at their respective organizations.
The Smarter Way to Manage ERG Budgets in 2025: Automate & Optimize with Teleskope
If you’re still using spreadsheets to manage your ERG budget, consider switching to specialized software. Tools like Teleskope’s ERG management platform help track spending, manage approvals, and provide clear reports on how your ERG contributes to the company’s goals.
With Teleskope, you can:
Automate budget tracking: Gain a real-time overview of ERG expenses and allocations.
Simplify approvals: Streamline budget requests and approvals for ERG leaders.
Demonstrate ERG impact: Generate reports to show ERG contributions to company-wide goals.
Enhance ERG engagement: Encourage participation with seamless event and membership tracking.
See how Fortune 500 companies use Teleskope to manage their ERG programs effectively. Book a demo today!
Frequently Asked Questions (FAQs)
1. What is a typical budget for Employee Resource Groups?
There’s no universal ERG budget amount; it varies based on company size, industry, and commitment to DEI. Some organizations provide a few thousand dollars annually, while Fortune 500 companies may allocate hundreds of thousands of dollars across multiple ERGs.
2. Is there a recommended starting point for Employee Resource Group budget allocation?
Employee Resource Group (ERG) budgets aren't a one-size-fits-all solution.Several factors influence funding, like the company's overall budget and its commitment to diversity and inclusion (DEI).
The maturity of the ERG program also plays a role. Newer programs might benefit from an equal allocation approach to get things started. As ERGs mature, budget allocation can become more strategic. Established ERGs can submit proposals outlining planned activities and resource needs, while highly mature ERGs functioning as Business Resource Groups (BRGs) can tie budgets directly to measurable business outcomes.
3. How can ERGs measure the impact of their activities on business objectives?
ERGs can measure the impact of their activities on business objectives analyzing employee data. By comparing metrics like retention, satisfaction, tenure, and engagement between ERG members and non-members, organizations can gauge the program's effectiveness.
For a deeper dive on this concept, consider downloading Teleskope’s Case Study - The Business Impact of Employee Resource Groups which explores how a global consulting firm used data to demonstrate the impact of ERGs on key business success factors.
4. How are ERGs evaluated for funding?
Funding decisions are usually based on how well the ERG’s activities match the company’s goals, the growth and engagement of its members, and how effectively the group has used its funds in the past.
Comments