A Sample 2020-2021 Budgeting Process for Community Choruses

You’ve probably heard the saying “show me your budget and I’ll tell you what you value.”

A mere glance at the budget of most community choruses is likely to reveal the obvious: they value performing great music for an appreciative audience. If they’re especially savvy, marketing-related line items in the budget might indicate they value as large an audience as possible, too. After all, singing to an at-capacity venue is always more enjoyable.

Year in and year out, the budgeting process for choruses remains relatively the same. Depending on concert programming, the expenses might change a bit here and there, but stay mostly the same. The revenue might also change a bit (I’m sure it’s not just my chorus that can reliably sell out a Brahms Requiem or a rousing Carmina Burana), but mostly revenue stays pretty steady as well.

We see variances from time to time based on the success of a particular concert or the response to the annual appeal, but for most choruses, setting up next season’s budget can often be accomplished by using the current budget as a template.

Until now.

Here we are in the middle of a situation no one saw coming, and with which few of us were prepared to handle.

How in the world do we create a budget for a season filled with so many question marks?

Is the remainder of 2020 truly done for? Will we get to perform in 2021? At what point? Will enough people come back to sing to make it a viable reality? Will audiences return again?

See? Lots of question marks.

So what do we do, and how do we do it? This is a good news/bad news situation. Each chorus is unique, and there are no one-size-fits-all answers. The good news, however, is that this process doesn’t have to be painful either!

The following guidelines are general, and should be tailored and scaled to meet the needs of your chorus. The basic framework should even feel a bit familiar.

Determine Plan A for Next Season

First and foremost, you should decide what you'd like the coming season to look like for your chorus. Even with endless questions, it’s important to come up with your best and most realistic Plan A. If you’re uncertain where to begin (and fear not—most of us are!), definitely start with the Season Planning Guide Amidst COVID-19.

Consider the following: Will you delay the start of your season? Cancel all in-person performances? Offer virtual performances? Perhaps you’re a small enough ensemble that you can start thinking about socially-distanced rehearsals sooner than larger groups.

Whatever the case, now is the time to convene your board, your artistic director, any staff, and key volunteers. If there are healthcare professionals in your chorus, now is the time to reach out to them and engage their expertise as you try to figure out your season’s structure.

When planning for the coming season, it’s important to be both creative and realistic. A season full of virtual performances sounds great in theory, but does your chorus have the technical savvy to make that happen? Do you have an audio/video editor willing to do all that heavy lifting? Lots to consider, but there are also endless possibilities.

Once your chorus leaders have met and you have an idea of what next season might look like, I’d suggest taking things to Finance committee for a more focused conversation.

Prepare a First Draft of the Budget

Operational Expenses and Revenues

Once you have a general game plan, get a first draft of your fixed operational expenses and revenue on the table. This is anything that's not activity or project-based. For expenses, this might be things like salaries, rent, office expenses, and such. For income, this is likely any endowments or annual fund income.

Once that is on the table, take a look at the final outcome. If you don't plan any activities, and only look at operational expenses, where will you be at at the end of the season? Deficit, surplus, or break-even? Knowing this will be important when you are building out budgets for your project-based activities.

One budget recommendation for this season is to try to at least break-even with your operational line items alone. That way, you have complete flexibility with your project-based line items which will likely change over the course of this season.

Project-Based Expenses and Revenues

Now, take a look back at the activities, projects, and programs you've laid out in Plan A. As you would normally do, create revenue and expenses columns with all relevant categories and line items.

What’s the final outcome if you look only at project-based expenses and revenues? Deficit, surplus, or break-even? 

In an ideal world, both your operational line items and your project-based line items would be fully sustainable on their own. That way, you're organization is still sustainable if one project is a bust or if you have to change course quickly in the middle of the season. You can even consider planning each and every project as a break-even item. Essentially giving a more modular appearance to your budget.

Now, look at the final outcome of your Plan A if you combine your operational line items with your project-based line items. What's the result?

If it generally looks good with some minor tweaks, keep it and now start to look at the individual line items.

Start Trimming Expenses

If you find yourself coming up with a budget deficit, you can always plan to bring in more revenue (more on that in a bit), but I’d start with trimming expenses. Especially if you’re planning a season that doesn’t involve live performances, you might find some bulk you can trim. Here are just three suggestions:

Rent

Do you rent or lease office space? If so, are you able to negotiate a reduced fee during the current crisis? It’s a conversation worth having!

You might even be able to convince your lessor that reducing your rent is in their best interest. It’s much easier to keep a tenant that pays on time and in full than having to list the space, dealing with a vacancy, and then filling the space with a new tenant that might not be as responsible as you are. The worst they can say is “no.”

Another more radical question to ponder is: do you really need to rent office space?

Subscriptions

The same idea here. What annual or monthly subscription fees are you paying? Professional memberships, software, publications, and the like should each be reviewed.

Do they contribute to the efficient operations you’re planning for the coming season? If so, keep them.

If not, consider what it would look like to end that subscription for a time. Every dollar counts when dealing with a budget deficit, so think carefully about your options.

Insurance

There are certain types of insurance you absolutely must retain as a nonprofit. Others, however, might not be strictly necessary, especially if you won’t be holding rehearsals or producing concerts for a while.

I’m not an expert in this area, but I would urge you to consult with your insurance agent to see if any options exist that would reduce your premiums for the coming season.

Fill in the Gaps

We’ve discussed expenses; now let’s talk about money coming in.

The very real possibility exists that even after trimming every possible dollar from your expenses, you’ll still come up short on the revenue side. This is when it’s time to be grateful that you’re running an arts organization and that you’re surrounded (virtually, for now) by creative people. Now is the time to get those folks together and get those ideas flowing!

In addition to all the other things you regularly do to bring in money like launching an annual fund campaign and applying for grants, you may need to find other sources of funding.

Can you host an online auction? Offer some other kind of service? Apply for grants for which you might not have qualified before (emergency/stability funding, for example)? Whatever you decide, attach a projected revenue figure to those items in an effort to reach a balanced budget.

Present to the Board

When your Finance committee has worked out the rough details, it’s time to present to your board for a wider discussion.

Each time I go through the budgeting process, I find the more people with eyes on a document, the better chance we have of spotting things that have gone unnoticed. This is always true, of course, but I think it’s especially important this year.

Talk through your process, the planned revenue-generating activities, the trimmed expenses, and where there might still be room for improvement. I also find it’s helpful to notate the current season’s budgeted figures in a column next to the projections for next year.

Be Flexible and Responsive

I think of budgets as living documents.

Once you adopt a budget, you should do your best to adhere to it as a guide, but as no one really knows what lies ahead for the choral world, it will be important to stay nimble.

As I write this, I hear the voice of my Executive Director in my mind’s ear: “Have a contingency plan!” If your budget for the coming season includes no in-person concerts, perhaps it would be worthwhile to create a parallel contingency budget that looks at what adding a spring concert might look like. Or if you plan to start things up sooner than that, create a budget that takes into account a long period of hiatus than you’re anticipating. Just in case.

In Summary

Yes, this is going to be a trickier budgeting season than usual. We don’t know what’s ahead. The best thing you can do right now is to get together whatever team usually handles your budget, and start talking about possibilities.

Try to keep each portion of the budget, operational or project-based, sustainable on its own which will allow you more flexibility to put something in or take something out.

Engage your board, your Artistic Director, and key volunteers to figure out what you can do, what you can do without, and what core values are most important for you to uphold.

When all is said and done, your budget will be a reflection of what’s important to your chorus; what do you want it to say?