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I want to build on Betty's comment to my planning post from a couple days ago. But before I do, permit me to voice a concern. As we were gearing up to start this blog, I wondered how often I would say something that would probably damage any future prospects I have in the association profession. This is probably one of those posts.

You see, I hate the annual budget cycle, which, let's face it, is the planning cycle. It strangles innovation, it leads to bizarrely bad decisions, and it's way too arbitrary. I could go on, and I will... Let's start with the budget document itself. About three months into the fiscal year, the budget is meaningless. The numbers themselves -- and the assumptions that went into them are already at least nine months old, if not older. The world kept spinning during those nine months and there are inevitably discrepancies from where you are and where you thought you'd be.

We adjust. And we do this, usually, with the forecast. The forecast is essentially a new budget, but in terms of the planning, we don't treat it that way. We're not actively seeking new opportunities and questioning what we're doing. Flashback to the development of the annual budget. Sadly, it is a time when people gear up to defend their programs. We defend, we justify -- we desperately search for data to bolster our claim for the need of new staff or to keep doing what we're doing. And, unfortunately, we win a whole lot of the time. We made it. Our program is in the budget. We don't have to defend it like that again until next year. There are a number of problems there, the biggest being a cultural problem. But the annual cycle helps perpetuate that culture.

There's also the stupid decisions that an arbitrary end-of-year date leads to. One association I worked for put off the printing of a major book until the next fiscal year because of the way it would make the balance sheet look at the end of the current fiscal. The big problem was that by everyone's admission, the book would sell best at the annual meeting, which was in the current fiscal. There was no doubt that the total net revenue from the project would be better if the book were printed early and sold at the meeting. But because it meant the difference between black and red ink at the end of the current fiscal, they put it off. (It wasn't a cashflow issue, the organization had the cash to pay for it.)

The problem in microcosm: I myself just fell prey to this very thing over a STINKING $500. We needed a new camera to photograph something since the company digital was state-of-the-art in, oh, about 2000. I had put the money for a new camera in the next fiscal's budget. I made the boneheaded decision not to blow the line item in the current fiscal, causing us to scramble around to find a digital to use.

I know there are complications with doing away with the annual budget. How would it work -- or could it work -- with finance committees and financial audits? I think you do need to have short-term and long-term time horizons for projects, I just think it's a little insane to measure every project as if their time horizons were the same. Goodness knows I think cashflow is king and that you need some way to periodically measure the financial health of your organization. But read what Betty said about the freedom and energy it created when her organization focused on a four-month plan. I may not have a workable answer, but I have seen how annual budgets slow things down or even squash things. In fairness to Betty, this is my rant, she wasn't advocating anything about budgeting. But that's the connection I made when I read her words: "By emphasizing what this small group of volunteers had to 'do,' rather than focusing on what they 'planned' to do in the future, they were able to be re-energized and excited about taking the work on."