A strategic approach to annual budgeting

Budgeting is not a sexy topic. It is fraught with politics, and annual PR budgeting strategy is rarely discussed publicly. However, communicators can take a street-smart approach PR budgeting.

In an ideal world, public relations budgets would be developed on the basis of principle, by deciding which communication programs and activities best support the organization’s mission and goals. Therefore your planning strategy would be undertaken on a long-term basis. In this ideal world, both the organizational and departmental strategic planning would look at the longer term, but in real life there are many variables in one year alone, much less any longer timeline, so it is difficult to plan very far ahead except in general terms. The horizons of your organization can be dominated by short term agenda. Indeed, as business cycles seem to be affected by more and more short-term, unforeseen events, it is not prudent to plan in detail too far ahead because events tend to overtake the best laid plans.

The vision and mission statements show the direction of the organization, but the pace of progress towards achieving the vision and mission depends largely on the available revenue stream. Major new projects and other initiatives can’t be implemented unless they can be financed, usually through the annual budgeting process, which is part of the annual strategic planning process.

Organizational budget dictates the shape and size of PR budget

The available funding in the organizational budget largely dictates the shape and size of the PR budget and hence the PR strategy. Since all organizational budgets tend to be prepared on an annual basis, the planning (including PR planning) in all organizations is conducted on an annual basis. So in reality, the budgets control much of the strategic planning process.

Management may try to plan ahead for the likely operational activities and funding needed 3-5 years ahead, but anything further than the next year has no certainty.

In the context of the annual budgeting process it is important to remember that PR activities are both a mix of continuing activities such as stakeholder relations activities, which are long-term in nature, as well as cyclical activities such as the production of annual reports, which fit by definition into a budget year.

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