For many PR executives, the dog days of summer mean figuring out how to get the most bite out of next year’s budget. And because there seems to be a light at the end of the economic tunnel, it might be tempted to add a few communications bells and whistles in 2011 line items.

But not so fast. According to one PR executive at a nonprofit, spending for 2011 is “all in a state of flux,” at least at his organization.

That’s an assessment that Eileen McComb, director of corporate communications at Benjamin Moore & Co., can agree with. “You just can’t sit down with a blank Excel spreadsheet and start putting in numbers,” says McComb. “It’s not simply a question of what do I need next year, it’s more a question of what will be allotted to you.”

So in the spirit of line item expenditures (mixed with a hint of voyeurism), that same PR executive from the nonprofit provided PR News with his 2010 communications budget (on page 6)—albeit slightly edited and camouflaged to protect the innocent (mainly himself). And why would a PR pro put his budget out there for all to see?

“A budget is like a black hole,” he says. “You’re entering the unknown, where you can’t be sure you’re getting your money’s worth, and you really don’t know how your budget compares to your peers, particularly within your own industry. Plus, it’s a curiosity thing.”

PEER REVIEW

For Patricia Reilly, VP of communications at the nonprofit American Association of Railroads (AAR), “peering” into another nonprofit organization’s communication budget results in just as many questions as comments. “I’d be curious to find out what this organization does,” says Reilly, noting its relatively hefty budget. We can reveal that it’s an organization that provides pro grams and services worldwide.

Of particular interest to Reilly was the line item, “PR agency retainer/expenses.” “I’d like to know what this organization is getting for its $875,000 retainer,” says Reilly, who is surprised that many PR components—such as management software and media analysis/reporting—aren’t included in that retainer. “Just what are they getting for $73,000 per month?” she asks.

The answer? “It’s a single agency, and their charter is to primarily focus on national media outreach and placement, thought leadership, national PR project planning and communications counsel,” says the anonymous PR exec.

Another puzzling line item for Reilly is “brand enforcement (legal).” “I’d assume the legal group within my organization would pay for that,” she says.

What also stood out for Reilly is the Web site operations section. “This seems like a high-end site with lots of features,” she says. Reilly is close with that assessment, but not quite. The organization’s site is 5-years-old in its current iteration and is undergoing an extensive redesign, says the exec. “You won’t be seeing that million-dollar figure in 2011,” he adds.

BUDGET COMMONALITIES

Items such as Web costs do not fall under McComb’s purview at Benjamin Moore. “If I have something specific that I need, it will be rolled into an IT budget,” says McComb. “If I need a microsite created or Web analytics performed, it all goes under the IT department.”

McComb’s observation highlights one of the budgeting differences between a nonprofit and a large B2C/B2B corporation. But McComb cites one key budgeting element that most organizations should take into account: the importance of budgeting collaboration between departments and business units.

“We have a very collegial atmosphere here,” says McComb. “If I have a program that intersects with a specific business unit, we’ll join forces and work together to find funding from each other’s budgets.”

McComb has some other suggestions for a smoother and more fruitful budgeting process. They include:

• Given the economic conditions, budget in the most conservative way. It’s not a given to be given more money.

• Have a strong strategy and rationale for spending, and tie it to bottom line for any new programs. Think it through. Don’t just throw things against the wall.

• Gain support from peer groups, particularly executives within groups that you work with. Get their buy-in early—then they won’t be surprised by a new proposed program.

• Never expect to get the same funding for the following year.

And what does our John Doe expect to happen with his budget in 2011? “With the drop in Web costs, you’ll see more spending on the PR side, specifically in video production and media outreach,” he says.

Reilly sees more money spent next year at AAR in social media and online advertising. “These are two growing areas,” she says. “It makes sense to try different social media strategies and see what works.”

But there is a bottom line. “I have to defend my budget,” says Reilly. “I have to lay out context and justification for all the money I spend.” PRN

CONTACT:

Eileen McComb, [email protected]; Patricia Reilly, [email protected].
  

Communications Budget Breakdown: Large Nonprofit Organization, 2010
Advertising
Advertising production (TV, radio, print, outdoor, online)	$580,000
Advertising distribution/monitoring	400,000
Advertising agency retainer	395,000
Public Relations
PR management software, list building, press release distribution, Web site newsroom	60,000
Broadcast/print/online media analysis/reporting	135,000
Social media monitoring/reporting	50,000
Media event staging	35,000
Photography/videography	185,000
Collateral material production	305,000
Handheld video cameras for user-generated content	40,000
PR agency retainer/expenses	875,000
Brand enforcement (legal)	85,000
iPhone app development	30,000
Web Site Operations
New Web site development/testing	1,050,000
Web site hosting	300,000
CMS, eCommerce & online donation platform development, testing, software & training	100,000
Site analytics, segmentation & optimization for content & donations	150,000
Travel	440,000
Administrative Expenses
Publications	10,000
Memberships	5,000
Office supplies	8,000
Computer supplies	4,000
Administrative printing	43,000
Conferences/meetings	5,000
Shipping	22,000
Digital archive creation/maintenance	37,000
Professional development: Course tuition/fees for staff	50,000
Computer/Software Upgrades	35,000
Photo/Video Equipment	10,000
Total	5,444,000
Salaries/benefits	(not included)
Rent	(not included)
Telephone	(not included)
Above is the actual 2010 budget (slightly edited for space) for a nonprofit organization with 300-500 employees—with a communications staff of approximately 20.