Overview
The Big Red Bands operate on an annual budget of approximately $170,000. Aside from a small, past subsidy related to the Band Center, the University does not provide any annual support to the Band. In general, all band expenses, including travel costs, music advisor compensation, instruments, and Band Center costs are supported by annual alumni giving and payout from the Band’s endowment funds. Each fiscal year the BRBAA Advisory Council establishes a budget for the Bands’ operations based on student and alumni input. This budget is presented to Band Alumni at the annual Homecoming BRBAA meeting. The following summary provides highlights of the fiscal year 2017 financial results and the fiscal year 2018 budget.
Fiscal Year 2017 Performance
Overall, the Band had FY17 income of $164,469 and expenses of $187,060. While income was 12% higher than budgeted, expenses were 35% higher than budgeted.
Fig 1: FY 2017 Income and Expense budgets vs actuals. Performance significantly off from planned budget.
The Bands’ annual expenses have continued to rise as a result of the opening of the Band Center as well as increased operational needs. While annual giving increased in 2015 with the introduction of Cornell Giving day, annual income has not kept pace with expense increases in the past several years.
Fig 2: Historical annual income and expenses. Expense increases outpace annual income trends.
Income Statement
The Band Endowment payout continues to grow, due in large part to a growing utility endowment and past share purchases, with the actual payout of $51,869 tracking 17% above budget, and 19% above FY16 payout amounts. Total gifts of $93,162 were 7% higher than budget, but actual FY17 gifts were $10,000 less than FY16. We are conducting additional analysis to better understand factors contributing to year over year gift fluctuations. Pep Band SAFC funding was $3,325 less than budgeted due to the PB missing a submission deadline. The bands benefited from a final University maintenance support subsidy of $6,000 toward utility charges. As of FY18, the Band is fully responsible for all building related charges. We anticipate the fully funded commitment to the Band Center utility endowment in FY 2020 will generate between $50,000 and $55,000 per year, covering most of the increased building utility expenses and maintenance charges.
Fig3: Band Income Sources. The Bands rely primarily on annual alumni giving for operational funding.
Expense Summary
The Bands saw increases in every expense category from budget expectations. Marching Band travel was 120% of budget, equipment expenses were 125% of budget, uniform expenses were 232% of budget. Insurance and building overhead were being incorrectly budgeted in the past. This has been corrected going forward. Equipment was over budget mostly due to planned raincoat purchases and percussion equipment expenses. Pep Band travel was 25% over budget due to an unbudgeted Yale/Brown hockey trip.
Bus expense is a specific area of concern for the band. Harvard bus costs in FY17 nearly doubled the cost from two years ago and Columbia buses increased 30%. Bus expenses increased 40% for FY18 compared to the bus costs for the same travel in FY16. The Band is working with the new Cornell Athletics travel coordinator in an attempt to address this concerning trend for future travel.
Reserve
The Band budgets a $21,000 yearly reserve expense to spread out the costs of uniforms, sousaphones and percussion purchases. Uniforms are on a 12 year purchase cycle, sousaphones 3 years and percussion 5 years. Due to the FY17 operational deficit, the Band was unable to put any new funds into the reserve. However, the BRBAA Advisory Council hopes to make this deficit up by postponing scheduled purchases in future years due to the positive state of these assets.
Net Financial Standing
The Band’s current endowment value stood at just over $1 million as of July 1, 2017. Endowment shares payout based on the University Board of Trustees payout policy which considers a rolling performance average. The FY18 payout is $2.58 per share, down from $2.75 per share in FY17. Last year we moved approximately $21,000 from reserve accounts into the endowment to take advantage of market performance. Reserve accounts earn no interest. Cash as of July 1 stood at $61,000 and an additional $72,000 in booked equipment reserve is held in the endowment, representing approximately 6.5% of the total endowment value.
The Band received an unexpected $100k endowment gift from a donor this Fall. This new endowment fund is expected to provide approximately $5,000 in annual income for the band budgets in future fiscal years.
Fig 4: Endowment Value and Total Number of Shares. Endowment Value is a function of the number of shares and share value. The Band is the beneficiary of the Fischell Endowment Fund, created to offset annual operational costs of the Band Center.
Fiscal Year 2018 Budget
After a careful review of expenses and band needs, the BRBAA Advisory Council submitted a break even budget for FY18 based on $170,000 of income and expenses. The FY18 budget includes expenditures for four security cameras in the Band Center, travel costs for three Marching Band trips and 4 Pep Band trips, $15,000 in Pep Band playoff expenses, and $29,000 of Band Center overhead charges. Annual band giving has been budgeted even with FY17 and is expected to be the most critical component leading to the success or failure of breaking even at the end of the year. Student and Alumni leaders are committed to continued diligence in carefully managing organizational expenses to avoid a repeat deficit like FY17. Alumni with financial questions are encouraged to get in touch with Adam and Nick, the BRBAA Treasurer and Resource Chair, respectively.
Let’s go Red,
BRBAA Treasurer: Adam Mangano Drenkard ’11 (adrenkard@gmail.com)
BRBAA Resource Chair: Nick Janiga ’00 (nick@janiga.net)