Tourism Southern Highlands chair John Hawkesly told council Tulip Time needed to start saving for future costs rather than relying on each year's earnings to pay the bills.

Tulip Time director Vicki Miller said the festival relied almost entirely on takings at the gate.

She said in previous years the trend had been to donate all profits to charity rather than keeping some money in the bank to cover next year's expenses.

"We're trying to get the message through to council that Tulip Time is funded by gate takings and as costs rise we need to meet them," Ms Miller said.

"But people seem to think that when we want to start charging locals we're being greedy.

"It's not about greed but about not wanting to lose the benefits it brings to the community."

Cr Nick Campbell-Jones told council Tulip Time was not in financial trouble at the moment, but he warned it would only take one bad year to put them in dire straits.

"If we have two week's rain one year, they're in real trouble," he said.

Ms Miller said Tulip Time needed to store up some money to cover potential bad years.

"We're not planning to abandon local charities, but we are saying they should not come first, running a successful event should come first," she said.

"As long as we've got enough money to run next year we will continue to give to charity."