converting currency

“I can make more generals, but horses cost money.” – Abraham Lincoln

“I don’t want to make money – I just want to be wonderful.” – Marilyn Monroe

Ahh, budget season.

Most nonprofits have spent the last several months trying to divine the future. Budget forecasts, funding “pipelines”, confirmed vs. anticipated revenue, and plain old hopes and dreams all get funneled into what is ultimately known as the “approved budget”. For a few lucky organizations, 90% or more of the approved budget is based on known quantities. For the vast majority of organizations, budgets are no more than our best guess.

Like many fellow nonprofit leaders in Santa Cruz, I spend the months of April through July attending budget hearing after budget hearing in all five jurisdictions, sometimes waiting hours for my (literal) two minutes to stand in front of elected officials to ask for continued support. As the flashing red timer ticks down the seconds, I try to educate, engage, and inspire the five or seven folks who have just heard fifty similar pleas. Even better, I often end up speaking after numerous social service leaders, who bring their differently-abled children, their wheelchair-bound seniors, their homeless families, all of whom benefitted from public funding. When it’s my turn, what can I say?

What I say is the truth: that I’m honored to be in the company of these incredible organizations that feed, clothe, and house the needy. That I represent the thousands of artists and arts organizations that feed the soul and the spirit; that connect everyone in our community; and that inspire and lift us when things are tough. And that we aren’t there for a handout: we are there to be a part of the solution.

I tell them that the nonprofit arts industry in Santa Cruz generates $32 million in economic activity every year. That attendees to arts events in Santa Cruz County spend an average of $30.29 on food, lodging, and transportation above and beyond the cost of the event. That our nonprofit arts generate $14.47 million in household income to local residents and delivers $2.86 million in local and state government revenue. What this means is that the arts not only knit the fabric of our community; they also can generate the public funds necessary to support social services that our community desperately needs.

We are lucky in Santa Cruz. For 33 years, all of the jurisdictions in the county have funded the arts through the Cultural Council’s grant-making program. But every year, that pool of funding shrinks, and every year, I have to make the case as to why the arts are one of the smartest public investments the cities and county can make.

Above and beyond the work I have to do in the public funding realm, however, is the actual budgeting process. I used to dread budget season, because I would look at the year that was passing, and the year ahead, and wonder how I could make sense out of what might happen. Now, though, I find crafting next year’s budget to be an incredibly exciting process. The budget is not just revenue and expense targets: it’s our mission. How will we make a major impact with the resources we have? How will we change lives? Who do we want on our team? What will we need to stop doing, so we can do something else that could be transformative? What smart risk-taking should we build in?

This year was difficult. We had income reductions that forced staff changes that were painful. We had to eliminate our major fundraiser because, although it was a wonderful party, it was not yielding enough return on our investment. And we are losing some incredible team members due to retirement and transitions. But… we are also promoting some thrilling new talent. We’re going to be able to increase the amount of funds we grant to artists and arts organizations, including funding new applicants to our program as well as professional development for all kinds of artists, from musicians to actors to sculptors. And we are building a visibility campaign that will finally allow us to tell our story, and the story of Santa Cruz arts – in a vibrant new way.

One of the smartest things I did this year in regards to our budget was contracting with the Nonprofit Finance Fund (NFF). I asked them to review two years of past finances and our current draft budget with several questions in mind: is it mission-driven? Is it highly strategic? Where are the opportunities that we can’t see, because we are so close to it? The result was a whip-smart memo that helped inform both difficult choices, and a smarter use of resources. I can’t recommend NFF highly enough.

Next Wednesday, our budget goes to the board for approval. I’m proud of the work that went into it, and more than ever, I see it as a strategic tool that sets our priorities rather than an albatross by which I have to measure my successes and failures each month. Budgeting is never easy, but it can be inspiring. In thinking about Marilyn Monroe’s quote above, it turns out, I want at all: I want to generate money for this organization, AND I want to do wonderful work. I hope our budget for this year allows for both.