I started 13 months ago as the Managing Director of one of my favorite clients: The Seagull Project.
In the time since I was brought on board I expanded the staff so we were able to finally implement regular marketing and development strategies, keep on top of fiscal information, and move towards larger goals like becoming a 501(c)(3) non-profit.
Funny that in my year+ since I started I hadn’t actually attended a meeting of my board. They were always scheduled when I had prenatal appointments or would be cancelled.
I went on maternity leave at the end of May, a full 2 months before I had planned because my pregnancy suddenly required me to be on bedrest and to reduce my stress level. So by the time I came back, a full 10 month had passed without me ever seeing my board. We had planned for one in November, but more than half our board couldn’t make it and it got cancelled.
Imagine my excitement when my first board meeting was all about a fiscal crisis where we were anticipating a sizable budgetary shortfall. Welcome to your first board meeting, Verhanika!
I was most anxious about having to talk about a budget that had changed drastically in the 5 months I was away. There were revenue goals I didn’t understand and line items with funny amounts that I couldn’t decipher. What’s worse is that because of our methodology of keeping documents, some of my department heads’ budgets were modified beyond recognition or just deleted. If you can, avoid Google Drive unless there are very clear rules set up ahead of time about how and who can edit documents.
My development team had spent the last two weeks getting a new fundraising plan together that was more in line with their personal perspectives on fundraising, rather than what had been passed down from previous teams. I was excited to have my Major Gifts Manager present this at the meeting and thought it was a solid way to fill the budget shortfall.
A few days before the board meeting, one of the members sent out an email that said we would have to look at cuts first and potentially pay people not protected by a union agreement on the back end after our budget had been reconciled, thereby leaving them potentially without pay if we weren’t in the black. If we did this, we would open ourselves up to an Unfair Labor Practice by discriminating based on union standing. Also, who thinks a good idea to not pay people they have promised pay to? This represented a philosophical difference that I had with the board in that I wanted to exhaust all avenues of fundraising first before making cuts. I have worked in non-profit arts for almost 15 years and have observed that theatres that try to fix budgetary problems by cutting expenses first have terrible morale, thin art, and continually find themselves in “crisis.”
I was ready to walk in and defend my team’s plan and ability to pitch it first before the cutting started. I even solicited advice and goodwill from a Facebook group I’m a part of and received lots of well wishes and practical advice about how to approach this.
The board meeting started and I asked if I could shared my Managing Director report first. This articulated all the successes of my volunteer staff, including higher ticket sales, more patron interaction, and improving internal operational structures. By ending with a quick mention of the fundraising strategy that was being presented later, the board seemed to automatically approach discussing revenue options first. We reconnoitered revenue numbers to reflect what seemed more realistic and in line with what was actually happening instead of old, outdated plans that had since fallen by the wayside.
We determined we needed $20,000 in cuts and $20,000 in new revenue.
While we were going through the revenue side, my artistic director was sitting next to me furiously crunching numbers. I thought he was doing calculations about changing the contract level our actors would be working at. Instead he discovered an $11,000 mistake in one of our line items.
With that on the table plus a few painless cuts elsewhere, we ended up with $30,000 in cuts and a plan to secure a bridge loan.
I laid out my priorities for what I wanted to do with leftover money if our loans were forgiven and all agreed they were good options.
So, what could have been a terrible, morale defeating experience ended up being an incredible exercise in teamwork and the power of checking your math. My hope is that by the next board meeting we have met the goals we had set forth for revenue and can focus on how to start cultivating new donors and board members and setting up clear systems so we can avoid this problem in the future, or at least have an order of operations for how to address it with minimal panic.