Where Are We Today? NABJ Finance

Committee Report October 2015

Where are we today? o  The finance committee has examined

the financial state of the organization. In short, it is not a pretty picture for NABJ. With the association heading into a projected second consecutive year in the red, the organization MUST tighten up its expenses but more importantly raise revenue.

Financial Outlook o  In 2014, NABJ finished in the red by

$227,000. NABJ had a drop in revenue year in 2014 by nearly $500,000 compared to 2013. In 2015, the revenue drop from 2014 is projected to be another $200,000.

o  If NABJ does not increase revenues in 2016, the organization’s financially viability will threaten the organization’s ability to operate and keep its doors open.

Financial Outlook o NABJ will go from $2,813,000 in 2013

to a projected $2,081,614 in 2015. That is a drop in revenue of $731,386 in two years.

o Meanwhile expenses have stayed flat over the same period. In 2013, NABJ finished with $2,584, 217 in expenses. In 2014 NABJ finished at 2,572,608 and 2015 is projected to finish at $2,459,921.

Cash Flow o With no HOF and lower revenues from

lack of M.I./Regions, NABJ is facing a cash deficit heading into 2016 with a negative balance of nearly $60,000, this even after drawing down from our investment account.

A Closer Look at 2015 Budget Actual

o Revenue $3,421,561 $2,081,614 o  Expenses $3,189,537

$2,459,921 $-378,307

Difference Revenue: -$1,339,947 Expenses:-729,616

Budget overall o NABJ must reduce its reliance on the

convention for revenues. In successful years, NABJ has had less reliance.

Convention Dependence o 2015: 58% of overall revenues from

convention o 2014: 64%; 2013: 53%; 2012:

59%; 2011: 60%; 2010: 51%; 2009: 74%

NABJ Finances o  2015: -$ 378,307 58% o  2014: -$227,182 64% o  2013: $228,831 53% o  2012: -$59,633.06 59% o  2011: $3,363 60% o  2010: $437,727 51% o  2009: $-612,779 74%

A Closer Look at 2015 Revenue Budget Actual Diff. Membership $218,000 $210,125 $-7,875 Convention $1,370,000 $915,602 $-454,398 Hall of Fame $210,500 $0 $-210,500 Media Inst. $235,100 $57,075 $-178,025 Regionals $99,063 $11,050 $-88,103

A Closer Look at 2015 Problem areas Expenses Budget Actual Diff. Con.Audio Visual $210,500 $213,142 $2,642 Conv.Travel $25,500 $71,875 $-46375 Conv Center $14,000 $123,128$-109,128

Expenses

AV Equipment/serv   164,391.17   161,262   217,728   213,142  

Professional Fee   245,264.06   79,654.76   140,651   34,994  

Consultants   237,884.04   97,682   55,175   52,130  

Facility Rental   24,962   9,634   29,040   123,128  

Travel   86,297.55   78,388.73   61,979   74,466  

Convention Travel   39,481.82   30,962.52   18,839   67,437  

2012 2013 2014 2015

A Closer Look 2015

What does it mean Media Institute/Regionals: 2011: $73,380 net for NABJ in black by

$3,363 2012: $83,662 in red by $59,633 2013: $109,201 in black by $228,831 2014: $66,272 in red by $227,182 2015: $44,524 in red by $378,307

What does it mean? Hall of Fame (net income) 2011: $51,670 NABJ in black 2012: $8,363 in red by $59,633 2013: $29,601 in black by $228,831 2014: $11,664 in red by $227,182 2015: $0 in red by $378,307

Looking ahead o  NABJ in 2016 will have a reductions in

expenses with the joint convention. o  No convention center helps as well. Student

programming which is expensive, will be in half.

o  Lower food minimums. o  Added a convention management company to

budget. It will cost $75,000. NABJ eliminated this in 2011. NABJ internally has managed it. Also hotel vendor gets hotel commission. Membership does not like this practice.

Recommendations o An aggressive 30-60-90 day revenue

generating plan. o  Examine possibilities of a

management company to take over the day-to-day operations of the national office.

Recommendations o Retain the services of an aggressive

fundraiser with vast experience in building relationships and ensure effective deliverables to partners. Funders are currently working on budgets and we must act swiftly.

o Begin to negotiate with vendors in accounts payable, slow pay liabilities to buy time and manage cash flow.

Recommendations o  Examine lease with University of

Maryland. Consider eliminating a physical office or seek space for much lower costs

o Recommend ceasing to outsource items in which the national office can handle such as booking travel, exhibit booth sales and convention registration.

Recommendations o Recommend a January board meeting

remotely; find a sponsor or have board members cover own cost for board meeting.

o  Recommend in the spirit of the industry trend, propose to move printed products to digital. These publications include the Journal, Convention Program Book and other related printed items. These items must have a developed business plan and a funded budget for production.

Recommendations o Recommend all contracts be reviewed

by the Finance Committee before it is signed.

o Bi-weekly development meetings should be held with management with detailed development reports being provided to management and the Board of Directors.

Recommendations o Bi-weekly finance meeting that

includes the President, treasurer, executive director, finance manager and finance chair.

o  The Finance Manager has a series of recommendations that should be looked at closely. Previous warnings were no heeded.

Recommendations o  Implement a monthly payment plan for

Convention Registration. The overall cost of this option would be slightly more but would attract and get more commitment from attendees n  This will give a better indication of actual

number of attendees and revenue forecast projections

Recommendations

o Launch a monthly subscription program for NABJ Members that would give access to monthly career/skillbuilding webinars and a forum or chat board to engage with members

Recommendations o  Offer sponsors the opportunity to be subject

matter experts to present on topics to NABJ membership and job opportunities etc. n  Create opportunities for ongoing

sponsorship revenue n  Highlight members: career accomplishments

o  Launch 40th Anniversary/membership fundraiser in December to bring in cash.

How can we fix this? o We must have a commitment to

governance, consistency and accountability on all levels

o We must have a commitment to communicating with the board on financial matters.

o  The board must manage up. This means always ask the President, treasurer and executive director about the budget.