Today is June 30th, the last day of The Schubert Club’s fiscal year – ours and many other non-profit organizations’ too. We have all received plenty of reminders as the year-end was approaching.
It will take us a week or two more to ensure the final income and expense transactions took place as expected before we can tell exactly how we finished (and even then it will be before our audit and thus unofficial). But – without tempting fate too much – it looks like we will finish the year with a balanced budget, something the community at large and our family of Schubert Club supporters expects of us.
Ending the fiscal year with a balanced budget will always be a major focus and a source of concern for most non-profits – certainly most arts organizations.
Why? Because we commit to the majority of our expenditure early in our planning cycle yet most revenue is collected later. That applies to both ticket income and annual fund donations. Even subscription package revenue (paid by subscribers several months in advance of the beginning of a season) comes in after artist fees and production expenditure have been committed to. After all, few people would be prepared to buy tickets before they know what artists we have engaged for our various concert series.
It’s the “nature of the beast”. We can predict fairly well what our expenditure will be. Revenue forecasting is always going to be more fickle.
The degree of volatility varies from organization to organization. It helps also to know your organization; how much ticket income/contributions can we confidently predict? How much is beyond a realistic forecast? I’m now in my third year with The Schubert Club and I can assure you that the experience of the prior two years made the budget planning process for FY15 a little more comfortable.
The challenge is in forecasting revenue. The Schubert Club’s revenue is divided into three pots. Earned revenue (mostly tickets), contributed revenue (donations and grants) and investment revenue (an annual percentage draw from our endowment).
It’s pretty obvious that if you forecast your ticket income and contributions revenue too aggressively, then the risk of falling short is high. Finishing the year with an operating deficit is something to avoid for a variety of reasons, not least the perception that the business is not being properly managed. However, it’s not helpful to go the other way, to forecast too conservatively either, because you’re not allowing your programming to achieve its full potential. All non-profits have a mission and if you’re not striving to fulfill the mission to the maximum extent possible, you are rightly open to the criticism of not managing your organization well.
For this current fiscal year which closes today, The Schubert Club Board of Directors approved a budget with a small deficit – specifically intended to provide “seed money” to help launch our new concert series Schubert Club Mix. We launched the series successfully and the good news is that it looks like we will even manage to finish the year with a small surplus and avoid the authorized deficit. The sign of a good year, and I am personally grateful to all who bought tickets and made donations to support The Schubert Club.
Thank you. We are fortunate to have the trust and interest of so many music lovers.
photo above: Patrons pay for and pick up their tickets at the April 13, 2014 Schubert Club Mix event at Aria featuring Anthony de Mare. Photo courtesy of Cliff Dahlberg.