Due to the unknowns surrounding the ongoing global pandemic – changing local and state health mandates, hotel contracts with large cancellation penalties, members’ needs and appetite for virtual programming, and other unpredictable circumstances – the Association for Clinical and Translational Science (ACTS), a Smithbucklin client, took a more conservative approach to its 2021 budget process than years past. Because of its strict financial management, the organization is forecasting $247,000 in year-end revenue – a swing of nearly $400,000 from its 2021 approved budget.
At the start of the budget process – approximately 4-6 months to the start of the fiscal year – ACTS approached the process with a “worst case scenario” mindset, meaning the organization reviewed all assets, contracts, and penalties, and accounted for any possible losses it could encounter throughout 2021. As a result, the ACTS board approved a budget with a $200,000 deficit.
“ACTS always manages the budget process with a lot of scrutiny to maintain fiscal responsibility. After a year like 2020, the association wanted to prepare for another year of unpredictability related to the pandemic and economy to preserve the organization’s financial health to provide better services to members – now or in the future,” said Kim Wiatr, a Smithbucklin Executive Director that leads ACTS.
To fuel 2021 revenue, the organization not only exceeded its budgeted member renewal dues, but also acquired unanticipated new members. And when it came to planning revenue for its annual meeting in 2021, ACTS also budgeted conservatively. The organization planned for a virtual event and a large hotel cancellation fee in the event the contract could not be renegotiated. Fortunately, the 2021 virtual annual meeting actuals were double the budgeted registration revenue.
“We were completely shocked,” said Wiatr. “We just blew registration numbers out of the water, and it was a good indicator that people are still seeking ACTS content.”
In addition, the association wasn’t sure what revenue, if any, to expect from its journal article submission fees and budgeted low. The pandemic actually resulted in even more submissions than the previous year, accounting for an additional $66,000 in unexpected revenue.
Wiatr explained that the finance committee examined 2021 expenses, where the organization needed to spend money, and where could it pull money back temporarily for 2021 and that approach helped ACTS ride out an unpredictable year. As a result, the finance committee not only has a better understanding of the association’s financials as a whole, but also now better understands which programs and line items can sustain a budget cut or need additional budget allocation.
The organization is following a similar process with the finance committee for 2022 budgeting, including multiple committee calls and review of programs line-by-line. “The committee is really starting to learn to get comfortable with cutting or removing items in the budget in order to mitigate a loss,” Wiatr stated. “They also have a thorough understanding that just because something is removed from the budget for 2022, it doesn’t mean it’s gone forever. We can reintroduce it when we feel like we’re in a more stable financial position.”
The pandemic also forced ACTS to think differently. Like many associations, ACTS was faced with decisions to innovate areas it might not have previously considered before COVID. They’re planning to cut the printed onsite guide from their 2022 budget and push attendees to use the mobile app, knowing that adoption and comfort with mobile technologies is different than it was in 2019.
Wiatr concluded that utilizing a robust budget review process has only made the organization stronger. “This process puts a lot of accountability on the volunteer finance committee, and it keeps the staff accountable to ensure the volunteers fully understand every line of expense and revenue. And now, every month when the financials are reviewed, there are a lot less questions and explanations we have to provide because of the high-level engagement during the budget development process.”
Ande Leslie is in the Marketing & Communication Services unit at Smithbucklin.