How to “Win” Your Next Budget Cycle

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0:00:11.6 Speaker 1: Hello, and welcome to office hours with EAB. Our guest today explain how to stop dreading the annual budget process by learning how to collaborate more effectively with your finance team. There are some great tips here from a veteran of university finance and administration, as well as some from an advancement professional who figured out how to articulate her department’s budgetary needs and priorities in a way that could be better appreciated by the folks in charge of signing off on that budget, so give these folks a listen and enjoy.

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0:00:48.6 Jenny Jones: Hi everyone, and welcome to office hours with EAB. My name is Jenny Jones, and I am part of the advancement marketing team here at EAB. My background is in university fund raising, and that work has enabled me to meet and work with some really talented individuals over the years. Today, I am lucky to have two such people joining me on the podcast, first up is a fellow veteran fundraiser, Alicia Fereday, and with her is Matthew Kogut, and he is the Associate VP of Finance and Administration, so we’re gonna talk a little bit today about these two worlds and how they intersect, especially in higher education advancement, but first, let me ask my two co-presenters here today to introduce themselves and tell you a little bit about their institution, so Alicia, I will ask you to go first.

0:01:43.1 Alicia Fereday: So I’m Alicia Fereday, I’m the Vice President for Institutional Advancement at the University of New England, and I’ve been at UNE for four and a half years. And as the Vice President for two and a half years, and in my role, I oversee a department of 22 people. And we have six areas, donor relations, major giving, all of the usual advancement areas. In addition, we also have government relations, which is an interesting and something I knew nothing about, an area, when I became vice president. UNE is a fairly young institution, even though we have 1863 on our seal is actually a mishmash of several universities, including Boksburg College, which is a New Portland campus and St. Francis, which is on our Biddeford campus. So we have three campuses, and I’ll let Matthew tell you more about UNE, but three campus has Biddeford, Portland and Morocco.

0:02:38.0 Matthew Kogut: Thanks, Alicia. My name is Mathew Kogut I serve as the associate vice president of finance and administration here at the University of New England. I’ve been with the institution for 12 years, and oversee a couple of functional areas, so the annual operating budget, capital budget, debt planning, long-range financial planning in our institutional and research and data analytics department as well. Alicia hit some high level information on UNE but I’ll give you a little bit more, so we’re actually means largest private university with an academic year head count of 11,000 and FTE of about 6000. We serve campus-based undergraduate, graduate and professional students that have a robust online college as well, we have two campuses in Maine, an ocean front campus in Biddeford, with a wide array of majors, including some with some actual reputation such as marine science.

0:03:46.1 MK: And we actually even have our own private research island just off the coast in our Portland campus, which serves as our really our graduate campus or health professions programs, including our College of Medicine and that medicine. And we do have a third campus solution mentioned in Tangier, Morocco, which shares as a traditional semester-long study abroad site for undergraduate students, but our graduate students are able to travel there as well, and we host conferences there, it’s a truly special place. I was there just this past January with a small group that sits again, right on the coast in Northern Africa, just across the Mediterranean from Spain.

0:04:34.7 JJ: Wow, that’s amazing. I didn’t realize you had that campus, so that is awesome to hear about that and learn more about UNE. So why are we here today? And why we invited Alicia and Matthew to talk about how they work together. Especially since we’re talking about an advancement shop, and then finance and administration, I don’t know how many of you out there have had the experience of being in one role or the other, or one division or the other, and having to work closely together on many projects. I have had that experience at the institutions where I worked in previously, I was always working with my finance and administration folks, whether they were in the division or they were in central university administration.

0:05:23.7 JJ: And so we thought, as we talked about this, it will be interesting to hear the perspectives from both sides about how they work together to benefit the institution, because while this may seem like it’s something that should happen naturally, that happens all the time, sometimes it doesn’t, and it can be really difficult when you’re someone like me who has to get up in front of your board of trustees and articulate why you need additional funding for staff, or why you are requesting additional programming, funding for events that you want to do in alumni affairs or other priorities, and you’re up against honestly competing with other individuals at on the campus for those budgetary priorities, so we thought about how do we talk about… How do we work with our finance and administration folks, especially when we’re in advancement, to talk about and articulate our budgetary needs and priorities in a way that can truly be appreciated and acted upon by the folks who are in charge of signing off on those budgets. So Mathew let’s start there. Why do you think so many department heads have difficulty engaging productively budget discussions with your team, with university finance and administration leaders, why do you think that difficulty exists?

0:06:41.4 MK: Sure. I think it’s actually a really insightful question with a lot of layers to it, but… Well, for me, there’s really three, I would say major reasons why… one is culture, and I think most people, when they hear culture probably thinking, Okay, institutional culture or culture in higher Ed, I’m actually… We’re gonna take it up a little higher and actually talk about really societal culture, if you do go, the three things, you’re really not supposed to talk about, if you wanna be polite and respectful in certain settings, it’s religion, politics and money to finance. So I think that it’s not that really department heads, division heads are not willing to engage and talk about finances where they’re disinterested, I think, honestly, they’re a bit out of practice, and I think that that really is a big part of it, and that will leads into number two, which is that leads to an insecurity a little bit around finances, and I think that many believe that they need to be financial experts to have successful conversations around annual budget development or long-range financial planning with their peers in central finance, or have a robust inventory of financial terms at their disposal, and that’s certainly not the case, so I’ll give you the unique to the inside scoop there, which is that we do not have those expectations whatsoever.

0:08:21.9 MK: Where we do is that we expect you to be subject matter experts in your area. Not in finance. And that will ensure that we have the best information available. For planning institutional level finances. I’d say ruling number three would be when you’re heading into, maybe for example, in a conversation about annual budget development or longer range planning is to not focus, and it’s a little counterintuitive, but to not focus on the dollars right away. And so what I mean by that is sometimes right as you’re heading into a process or a conversation around budget or financial planning, the first step is to grab, to reach for the current year’s budget. Or last year’s budget. And really we want folks to step back a little bit. And not get focused so much right away on the exact cost of product or service or salary.

0:09:34.4 MK: But really at UNE, we actually begin that process, say, for example, the annual budget developer process with really having conversations with someone like Alicia and say, let’s just step back for a moment. And we don’t even have numbers in the room. And we talk about the current level of resources and what the current operation looks like, what’s planned for their unit. So what major initiatives are upcoming maybe for the next year or beyond, are they… What are the length of them. Are they shorter initiatives, intermediate, longer term? And then maybe the environment in which they operate as a whole. So how is the landscape, for example, for working with Alicia of fundraising changing? And so how are, if an initiative that’s coming up, so maybe that’s a campaign or a reorganization of sorts if that’s gonna require additional resources how do those resources that we’re adding, whether they’re people or technology, etcetera. How do those align with that changing landscape.

0:10:49.4 MK: Are they gonna be flexible and scalable enough. In the upcoming years? So and then I would say probably a bonus number four, which shouldn’t be overlooked, is really relationships. So building relationships that doesn’t necessarily mean sending emails or pre-giving the phone to always talk shop or talk business. I would say that when Alicia and I maybe talk on the phone or exchange a text message I’m gonna say it’s less than 50% of the time we’re probably talking business. It might be university related. But we’re certainly not talking budgets and finances or even necessarily fundraising. So we find the opportunity. Everyone’s busy, whether it’s central finance roles or folks leading functional units out in the university or, but you’re always busy, but find the time to again, to build those relationships. And it will certainly pay dividends. And when you do have to work together, for example, on an annual budget development process, it makes it more efficient, more comfortable and easier to be transparent as well.

0:12:08.5 JJ: Yeah, I love that. Exactly. Yeah. I love that model. First of all, focusing on the priorities and what you want to accomplish. And then you’re right, it’s all about relationships. And those of us in advancement should recognize that right off the bat, [laughter] because our work is about relationships. But Alicia, you became VP of Advancement two years ago. Tell me about those early days and how you developed that relationship, both the working relationship and the personal relationship with Matthew.

0:12:40.1 AF: So I became the vice president in January of 2022, and I think it was three weeks later, I had my first budget hearing, which we called them at that time. We don’t call them that anymore, but it was my presentation and I didn’t have a presentation. I think I had a Word document, [laughter] and I didn’t know what I was asking for. I didn’t have a vision yet of what I wanted to do with the department. Certainly didn’t have priorities. I basically walked away from that meeting with exactly the amount that I had the year before for the next year, which was totally acceptable and probably well deserved. [laughter] But I took that as a moment to say, I have no idea what I’m supposed to be doing in these meetings. And when I became vice president, the thing that I told myself was, I am not going to pretend that I know how to do everything because I don’t.

0:13:31.1 AF: And so I took the next year and really dove into my budget. I worked with my team members to understand what we were spending money on, similar to how you would go through any plan with your advancement team. Like, what are we doing? Why are we doing it? Does it make sense? How much does it cost? What is the ROI? And so we really looked at it. My team had actually never seen their budgets before. [laughter] They were not managing their own budgets. The vice president was managing all of the budgets. So that was something that I also did, was disperse the departments to give them their budgets to manage and to give them the opportunity to ask questions and to learn about where they were spending their money. Because how are they gonna have a vision if they don’t know how they’re spending their money.

0:14:17.4 JJ: Yeah, I love that. I was always given my budget. And then you can think about what could you do? What are the possibilities? So I love that.

0:14:25.5 AF: Yeah, how do you dream if you don’t even know what you’re spending on things? And they were able to ask really great questions. There were things that were being expensed to one budget that actually should have been on another. So they were able to identify those things. And then it all wasn’t on me as well to look through those things. And then building my relationship with Matthew. So he was in that first budget hearing, and I’m pretty sure he shook his head and basically looked at me with pity and empathy. [laughter] Because he knew I didn’t know what I was doing. And we are relationship people, so I knew that there was some empathy there for my lack of knowledge. And I think we built a rapport over the next year as I worked on my budget, as I had questions.

0:15:09.8 AF: There’s a lot of things that I work on with Matthew that aren’t budget related, but are university budget related, so we tend to have the same sense of humor. And so we joked around a lot about some of those things and built our relationship. But I do ask him a lot of budget questions. I ask his team a lot of budget questions. The process is very long at UNE, which is wonderful. It’s new. This is a new process for us to be quite so long. But they’ve really taught me, and Matthew has taught me to be constantly looking at my budget and constantly thinking about it and constantly developing it and never to stop doing it. ‘Cause the minute I do, something’s going to catch me. So.

0:15:49.4 JJ: Yeah, I love that you ask questions and that you feel okay and safe enough to ask questions, because sometimes those of us in higher Ed feel like we have to know everything. Like we’re in these positions, especially leadership positions. We should know it all. And I can tell you too, at every institution, the budget process is very different. So, and you alluded to it and how you changed the process with your team, but Matthew, could you tell us a little bit Alicia said the budget process is a lengthy one at UNE. What does that look like? Just if you can give us some of the details about what meetings take place or what that process looks like from a 30,000 foot level.

0:16:26.8 MK: Yeah, of course. Yeah. And I wouldn’t say it’s long, Alicia. I would say… [laughter]

0:16:32.9 AF: It feels long.

0:16:34.3 MK: I would say it’s comprehensive. And so I would say honestly, it’s probably about an average. In terms of… Many PR very colleagues at other institutions that have, that I would say they do have a long process. I would say ours is just rights. But it is very comprehensive. And so what that looks like at UNE is really really we begin initial conversations. Well, first we will have what’s called like a kickoff. And so how can we really think about… How can individual areas, functional areas, so say for example, the least area advance, but really think about what they’re doing if we’re not having this kind of level setting conversation about where the institution is. And that’s everything from maybe that’s a recent financial performance that could be enrollment trends, etcetera.

0:17:27.1 MK: So I think that’s really helpful, I think, and for areas to, again, to have that kind of, that common base level of kind of understanding of where the institution is and where we’ve been. Before we can really talk about where we’re going and how that relates to their area. So we’ll have what’s called a kickoff with each division there. Really from there, we’ll distribute, we’ve got kind of a robust set of planning materials that we send out to institutions. And then we set up a series of what we call budget development kind of working sessions. And those are one-on-one sessions with our team in budget and planning. It works with the functional areas, or we call divisions here at UNE, again, to work through kind of what we talked about a little bit earlier.

0:18:15.8 MK: So their current level of resources, what’s changing in their world, and moving on, really it’s incremental. So again, those initial conversations, not a ton of numbers. In those conversations maybe the second time we meet, then we’re gonna start to put some numbers to things as we move along, that all culminates. And there’s so many great partners like involved in that. So I don’t wanna list everyone because we’ll leave somebody out, but for example, like our human resources group or just really important and strategic priority there. ‘Cause you think about like higher ed’s driven by labor. So people, and like physical infrastructure rates or our campuses that’s pretty much the majority of what we got… Of what kind of drops what we’re doing.

0:19:07.0 MK: So HR plays a huge part there in helping us with some of those conversations about about planning for positions and if there are view orgs involved and again, doing compensation reviews, etcetera. But so those budget development working sessions in that back and forth in partnership with the areas really culminates in them completing a package, which includes a presentation. So like a thing, like a PowerPoint presentation typically what we’ll see and then to kind of supplement their…

0:19:45.0 MK: A little bit more kind of their detailed… Their detailed budget, what we call budget packets. They will meet with our executive leadership team. So the president will be there, the provost or our CFO, I’ll be there as well. Again, to help units, and they’ll present their budget development materials for the upcoming year and for the years beyond. So we do ask them to talk a little bit about what’s coming down the pipe, ’cause again, that’s really, really important context. And then from there, kind of standard with most institutions there’s prioritizing, reprioritizing, again more prioritizing. And then we end up bringing a budget to our board trustees.

0:20:35.9 JJ: Yeah. That sounds like a great process. And as I hear that and think about what I’ve been through in the past, Alicia, I have to ask you, how did you work with your team to develop this prioritized wishlist that you put into the presentation that then went forward? What did that process look like? Because I know when I’ve done it in the past, it’s either a really nice process or it’s not. Some of you out there, I’m sure listening will agree with me. There were limited budgets. Everywhere I work, there were limited budgets and we were always fighting for the same dollars. So, Alicia, with that in mind, how did you get your team to give you a wishlist, and then how did you narrow that down to what you’re presenting to Matthew and the executive leaders make sense for advancement?

0:21:23.3 AF: So the first thing I did five years was we made, as a leadership team, we made a five-year plan. So we refer to that a lot when we’re in the budget process. What are we doing in the next five years and how are we gonna get there? And then throughout the year when somebody brings me an idea or an expense or something they wanna try, if it requires money, then we talk about it and we add it to… We have a wishlist. And I say, remember that for budget time and let’s talk about it again then. And then we know that budget process starts in around October, but right now as our planning for the next fiscal year. So we are already talking about the budget for the fiscal year beyond that. But also I’m meeting with every team member to talk through their budget for fiscal year ’25.

0:22:08.6 AF: What does that look like? What do you see as some of the problems here? And let’s talk about that when the budget comes around. Then in September when we get our budget packet from Matthew’s team, I send it to each department, each manager of a budget, and I ask them to review it and to send me their pitches. What do you want? What do you need? Why? We go through it individually. So I meet with them one-on-one, and we go through their budget and what they want. And in that meeting, if there’s something that absolutely will not make it, they know it’s out. And then I usually go to the meeting with Matthew and his team by myself so that I can get the feedback directly from them about what’s gonna go and what isn’t gonna fly. And then, I go back to the drawing board and review, and I think I start with maybe 15 to 20 priorities when it starts. And this year in January when I had my meeting, I think I had four, four or five.

0:23:14.1 JJ: Wow. That’s great. [chuckle]

0:23:16.4 AF: Yes. So it really is the process of going through, and as I’m writing the presentation, as I’m writing the PowerPoint, I’m still throwing things out. So it goes right until that moment that I start with a big, big batch. And then I say, what do I really need to get this done?

0:23:35.4 JJ: Exactly. And I know you had shared, and maybe Matthew, you can respond to this, but I thought it was great at one point you had shared that you gave Alicia some tips and tricks about what to do during this presentation. And that was something I’d love you to give us a little bit of advice about. I could have used that. I know when I was in that position and going up in front of, generally it was our foundation board and our board of trustees for our budgeting process in some instances. So what tips and tricks did you share with Alicia when she was new and coming into this process to better get her requests across? From a budgeting standpoint?

0:24:09.2 MK: For sure. And I would say probably more on presentation maybe preparation more so than presenting, ’cause I am far a mobile presenter. But really I think it’s, when thinking about presenting priorities for funding really being, I think being open, well, first of all, having data really to support really what you’re asking. So that’s really critical. So for example, Alicia had a request, to actually add some staffing. And there was some really strong data, that she had gathered, I think quite a bit of it actually came for EAB to really sub for her position. And really what the outcomes could be. And I think that… And really to be prepared to have transparent conversations about like a range of outcomes. And not just the planned outcome or the best case scenario. But again a range of outcomes so that folks in the river are a little bit more comfortable, again with that request. And again, what the potential results are gonna be.

0:25:33.9 JJ: Exactly, what we’re thinking about too with limited budgets that we are all seeing. Matthew, I’d love your feedback. And then Alicia, I’ll hear from you too. But you are receiving requests and seeing these presentations from across the campus. How are you all thinking about with the budget constraints in place? Are you looking at your strategic plan for the best use of funds? Or what does that look like? So we kind of have an insight of how you are thinking about where the dollars go.

0:26:06.3 AF: You want me to go first? [chuckle]

0:26:07.5 JJ: Either one. Either can. Yeah.

0:26:10.2 AF: I’ll go first and let Matthew tell me I’m wrong. How I do it is absolutely the five-year plan for institutional advancement, which does fall into the strategic plan and what we’re trying to accomplish there. So we’ve matched up our five-year plan with the strategic plan. And the other part of that is, are there ways that we can help other departments in our work that would also benefit the university? So as we talk about recruitment, one of the reason… The positions that I asked for is actually a alumni volunteer position. And we would like our alumni to help with recruitment. So I can help another department in what they need by, and also help myself. So when I look at our budget, that’s some of the things that… That’s one of the things that I was looking at is how can I help other areas that I know could use our help and would benefit the university. I’m looking at the whole university when I’m making my decisions and trying to see what will benefit the university, not just my department.

0:27:15.2 JJ: I love that. And Matthew, from your perspective, how are you looking at that?

0:27:21.1 MK: Yeah. For sure. I think that, it is a little bit of a tricky one here because they, every institution is in a little bit of a different position. Maybe from a budgetary perspective, kind of what their constraints may be, at the moment or they structural, or they kind of passing. I think we’re fortunate at UNE obviously our financial strength is certainly a benefit to us. But that being said, one of the reasons that we have that is because we do put a strong emphasis on, for example, efficiency. So one of the things that we really like to see from our division heads, whether that’s the dean or vice president of advancement, is to first look at gonna their current budget.

0:28:13.7 MK: So their current use of resources and say what’s working, what’s not and look at the areas that are inefficient and say, you know what, we may be… Like as Alicia said, we might have 15 to 20 priorities, but it’s not that… It’s not that maybe 10 through 20 I’m going to take off the table and say, you know what? We’re gonna look at our current level of resources or funding and reallocate those to some of these new higher priorities. Because some of these older priorities or initiatives products or services, whatever they may be are no longer an efficient use of dollars. And so we’re gonna go ahead and reallocate. That’s something we’d really like to see because it really shows that they’ve taken a comprehensive look at their own organization first.

0:29:01.3 MK: And then in terms of future priorities, again, it really depends in terms of the funding constraints, that’s where it’s really important that there’s just good communication between the divisions and central finance functions. In terms of, so if you don’t know where your university stands, reach out and ask the question, say, is there anything I should know about institutional level finances at ABC university or college. But hopefully that information is getting pushed out to you in advance.

0:29:36.2 JJ: Yeah. Well, I can see why you two work so well together. It is apparent from this conversation, and this has been wonderful, we’re gonna wrap it up. But before we do, I wanna ask, is there advice you would share with other university leaders, whether they’re seeking funding for a special initiative, or they just wanna get through another budget cycle without tearing their hair out? [chuckle] Are there any things you would share as we kind of end this conversation? And Matthew, we’ll start with you.

0:30:05.3 MK: Yeah. For sure. I would say whether it’s preparing for an annual budget development process or planning for an upcoming major initiative, that could be again, so it could be a campaign if you’re in Alicia’s world, if it’s a dean, it could be a new program, a new academic program. If you’re in athletics, it could be a sport. Is really to, I would say, to reach out as early as possible and connect and partner with your folks in central finance. I think there’s, kind of going back to the beginning of our conversation, there’s this feeling that there’s an expectation that everything needs to be just right. And that there needs to be… The finances need to be in order and every dollar amount has to be accounted for.

0:31:00.7 MK: And that’s just not true. So if we have a fully buttoned up plan presented to us that’s just looking for a standing of approval, we’re probably gonna be a little bit more skeptical than if we’re having a higher level conversation early on in the process and we can really work together to, over time flesh out some of the details. So I would say, again, reach out early and all the…

0:31:29.6 JJ: That’s great. And Alicia, from your standpoint, for those advancement leaders out there listening, what are your advice or top tricks that you would share or tips?

0:31:40.2 AF: I think my number one piece of advice is we are as fundraising professionals, I was always told, know your numbers and that was a fundraising number, our projections, our retention numbers. But you should also know your expense numbers, [chuckle] and you don’t have to know ’em off the top of your head, but you should know what you’re spending versus the revenue that you are generating. And constantly evaluate your budget, constantly evaluate what you’re doing. This is summertime, is a great time to sit down and look at what you did last year and what you’re going to do in the next year. And does it make sense to continue to do some of the things that you’re doing and reallocate those dollars before the budget season even starts, you could do that. And then having that five-year plan and having not only the five-year projections, but how are you gonna get there?

0:32:29.7 AF: And something that we do often with both our campaign and in our shop is we have roadmaps, we call them, and we plan out everything we’re gonna do in that campaign for the next five years or in our regular work in the next five years. And we know how much those things are gonna cost. So we can look at our budget for the next five years. We can look at our revenue and make a direct correlation. And I think that’s really important. So that would be my… Those are my two tips. Know your expenses as well as your revenue.

0:33:02.0 JJ: That’s right. Well, you all heard it here, and Alicia is very much right that it is summer, but we all need to be planning. We’re all in planning mode. Enjoy your vacations, but come back and look at your budgets. [chuckle] If you haven’t already, or if you aren’t thinking about what you’ve spent, what you’re spending, what you’ve been allocated, what you’re still requesting at some state institutions. You may not know your budget yet. I was in that boat for several years. But also think about meeting and making, building a relationship with the finance office and with the individuals in that office. So take them out for coffee, go out to lunch together. Like Matthew said, it’s not all about just discussing finance or advancement and fundraising. Get to know people on your campus, if you haven’t done that already, I think that came through loud and clear. Well, with that, Alicia, Matthew, thanks so much for your time today. I really appreciate it. It was a wonderful conversation. And we at EAB always appreciate the time you give, especially at this time of year. So thank you.

0:34:04.8 AF: Yeah. Thank you.

0:34:05.0 MK: Thanks, Jenny.

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