2014 Treasurer’s Report

August 16, 2014

SAA Annual Business Meeting
2014 Treasurer’s Report
Mark J. Duffy


[Slide 1]


Good day and thank you for taking the time to come to the Business Meeting today.

It gives me great pleasure, indeed real joy, to convey good news about the Society’s finances, and to report that operationally we are doing extremely well in most all areas.  Financially, the near future looks very good for SAA, and it is helpful to be reminded that this trend has some historical strength.  In the past decade, SAA has weathered both economic downturns and business model adjustments with steady growth in numbers, expanded services, and a greater capacity to affect the wider archives and information profession.  Even in those few areas where we are experiencing some challenge, Council and staff recognize the opportunity for creative risk-taking and manageable change. 

You have received by distribution versions of SAA’s two most important financial reports: the Balance Sheet and the Income Statement.  We have abbreviated these statements quite a bit so that you can compare the actuals across a four-year period.  Typically, we are present the Audited financial statements and opinion at this meeting, however, due to staff changes our audit schedule has been pushed back a few months as our new Director of Finance, Peter Carlson, becomes fully versed in the systems and working data that the auditor’s will need to do their work. 

The financials statements play a very important part in holding ourselves accountable to our members and key external audiences.  As I described them in a recent Outlook article, the financials are maps to our business operations and they offer a mirror view of our programmatic priorities.  Lacking a fiscal GPS, these hand-crafted maps take patience to read and understand. 

[Slide 2]

Balance Sheet

The Balance Sheet.  The Balance Sheet is a snapshot of SAA’s financial position at a fixed period of time and with a comparison to previous years.  The Balance Sheet presents important information about the overall financial strength of SAA, particularly whether we have sufficient real assets to handle any unexpected changes affecting revenues.  It compares our cash and other assets against our liabilities of debts and deferred revenue (or expected dues).  As of the end of June, our Net Assets were $859,880, a reassuring sum for a 6-month cushion of support against unforeseen events.  The strength of our Balance Sheet is demonstrated by the $136,008 (or 14.06%) increase in Deferred Revenues from 2013 to 2014; this which signifies a reliable, steady retention of members.  We also show a healthy cash and investment cushion over the previous year by nearly 29% ($292,938).

[Note that the statement includes SAA’s invested funds (e.g., the Technology Fund), which are separate but pooled with the SAA Foundation funds for investment purposes.]

[Slide 3]

Income Statement

Moving to the second report…  The Income, or Profit and Loss Statement, is a performance indicator that measures the strength of our programs and operations during a specific period of time: July 1, 2013-June 30, 2014.  It also tells us where we generate revenue, and where we spend money in benefits and member services.

You can see here that the big items are the Annual Meeting and Membership on the Revenue side, and Annual Meeting and Administration on the Expense side. 

Because the Annual Meetings have been consistently well attended and executed, we derive sufficient benefit to allow us to move into a period of intentional experimentation with its overall design and logistics.  Notable in the detail is that SAA’s Sponsors and Exhibitors have been particularly important elements in this positive result (both last year and this), and we thank them for their support of SAA.

On the expense side, General and Administrative covers a broad area including salaries, health coverage, rent, consultants, technology, etc.  This is a large expense area that the staff and the Finance Committee have begun to unpack for greater transparency and to measure more precisely their contribution to total dollar effectiveness.

[Slide 4]

What are the Current Trends? (Favorable and Challenges)

We recognize that Society’s services to members and impact on the profession are captured by member participation rates, survey returns, course enrollments, conference attendance, membership renewals, and numerous other program performance assessments.   These are our measures of success.

Our financial reports supplements these measures by helping us answer the questions:  are we being good stewards with our member’s funds, are we putting our treasure to work for what we value? 

The Income Statement indicates that our investment in web-based workshops, the DAS educational program, our career services offerings, and the annual meeting networking opportunities are attracting folks to SAA and driving revenues.  Education and Career Services are notable contributors to overall performance.  We do continue to face a challenge in our Publications program where we are looking to find the sweet spot in our mix of new offerings and the transition to electronic content delivery.   We were hit with a sudden and costly decision by our e-publishing vendor not to carry the AA any longer, but we are resolving this hurdle, and in general the Publications Board is taking a pro-active and optimistic stance.  The Income Statement should also reassure members that wherever possible, expenses are being closely monitored by each one of our individual program directors.

[Slide 5]

A comparative chart shows how operational and program categories compare with each other, (across the last two years).  This chart doesn’t change much from year to year, but it shows us trends, and next year, for example, we will finally see a difference in our Advocacy investment.  Membership is growing modestly overall, but marginally better in the middle- and upper-salary levels, which may be a sign that salaries are bumping up for some sections of the profession, or perhaps some of us are embracing the truth of our compensation more fully.  These hypotheses aside, improving salary declarations at dues-paying time indicates a healthy basis for a sustainable long-range revenue stream.

[Slide 6]

Evidence that we squeeze everything we can out of the operations is best reflected in the bottom line for FY2014.   Reconciling our revenues against our business and program expenses, we realized a Net Gain for the third year in a row of no less than  $155,934, which greatly exceeds our very best expectations of even a few months ago.  And when all is said and done, we may be in slightly better shape than our preliminary, pre-audit statements would indicate.

[Slide 7]

The Finance Committee has consistently proposed, and Council has agreed, that we should set aside these annual net gains to our strategic Technology Reserve Fund.  This savings account is sort of where the rubber hits the road for so much of what we want to do to in the areas of e-publishing, telecommunication connectivity among members, media-rich online offerings, virtual communities, robust course management and reporting for our educational program, and backbone association management tools.   The obvious success of this year’s meeting suggests that the trend line is headed in a positive direction for the savings we need to grow. 

[Slide 8]

The Budget

SAA’s management has proposed an ambitious budget to Council for FY2015 that is driven by what they heard from Council.  That body had spent the better part of last year re-focusing the direction of the Society and those ideas had to be translated into costs and income.  This year’s total budget is 5% larger than last year.  We are anticipating a net gain in the coming year of just under $50,000, which is a conservative estimate by our recent trend line, but a good number to start with.  I suspect we will be adjusting it soon as a result of the impressive attendance and vendor support for this shared tri-Conference meeting in the Capital. 

This budget contains funding for continuing and new commitments, including:

Professional Advocacy

  • Increase advocacy spending by 74 percent overall
  • Free Workshops, metrics for gauging impact, an advocacy guide,
  • Hard support for two new advocacy teams: CAPP and COPA

Education and Knowledge

  • Streamline the curriculum to rationalize how we present our many diverse offerings
  • New continuing education courses and training tracks in arrangement and description
  • Further low-cost Webinar offerings as an educational alternative
  • Migrate the American Archivist to a new online journal hosting service
  • Well crafted publishing focus on the Trends Series and rebuild the Archival Fundamentals Series and the Case Studies
  • Develop options for members to opt out of the print edition of Archival Outlook

Enhanced Annual Meetings Experience

  • Access to AV services to all component groups
  • Support affordable child care for Annual Meeting attendees
  • Funding recommendations of the Annual Meeting Task Force, including enriched Web content and social media networking

I am happy to say that Council also paid close attention in this coming year’s budget to three items that are often overlooked as we look at expense line items: 

  • Maintaining all staff salaries at parity with market and providing all of our staff with good livable wages;
  • Looking closely at SAA’s memberships and partnerships in other organizations and the value of those relationships; and
  • Identifying a “Drop List” of old routines that Council and staff could leave behind in light of new priorities -- which was a particularly fun cleansing exercise.

[Slide 9]

I mention the Drop List because it coincides with a budget report that Council receives, as part of its routine assessment of our planning agenda: a “strategic budgetary impact statement.”  This report, which is available in the online Council meeting materials, is to be a guide to the ways in which hard cash resources are utilized to realize our goals through specific activities.  This targeted form of budgeting is what gives me confidence that we are more likely than not to finish the fiscal year in a measurably better place.

[Slide 10]

New Opportunities and Future Challenges

We are now entering a fiscal year marked by a problematic convergence:  first, (1) our membership is growing, but only marginally at an average annual rate of less than 1%; second; (2) the three-year, incremental dues increases ended for the Society as of June 30; and thirdly; (3) we have spread our organizational wings with ambitious experimenting in our Annual Meeting, in our Strategic Plan, and by imagining a Technological Oz, even as we stay rooted in Kansas. 

We can hope by the end of this next fiscal year to have about $300,000 saved in our Technology Fund, but that is after four years of savings.  The fund is half of what we will need to be truly current in our web and backend IT performance for an information profession.  These are capital expenses and operational needs that should be funded as part of our ongoing, operational budget planning and not dependent on an annual net gain from a successful Annual Meeting alone. 

Council has, therefore, asked the Finance Committee to look at what we will need as a next step.  Our aim should be to keep membership dues revenue from falling behind the 30-34% of standard revenue benchmark that we have finally reached for a professional association (see Center for Association Leadership).  We cannot allow ourselves to slip backward after the progress we have made to become a first-class professional society.  You will hear more about this in the coming year.

[Slide 11]

SAA Foundation

Now my favorite subject: the SAA Foundation.   The Foundation had a banner year both in terms of donations and gifts and the incredible work that has been done to pull our act together.  We have Finance and Development Committees hard at work to identify new sources of donations and inaugurate a grant program to fund deserving projects and research. 

Best of all, I am thrilled to report that the Foundation received a record $55,465 in donations from individual members in FY2014.  My guess is that that donor pool and this audience would overlap remarkably and so it gives me special pleasure to say to our donors on behalf of the Foundation:  Thank you, thank you very much.

The Foundation will initiate a Planned Giving effort this year, which is where members can designate an amount from their estate for the work of the Foundation. I mention this because it was really the planned giving gift of one of our members, Linda Henry, that practically doubled our investment pool overnight, and she did so without tying the money up in restrictions.  That pool currently sits as $919,257.  As a result, we are able to imagine launching this coming year a worthwhile grant program to supplement our scholarship and awards funds.  This is yet another new venture in growing the profession, which we look forward to reporting on next year. 

We have a zealous SAAF Development Committee in place now under the magnificent leadership of Carla Summers (Larry Hackman, Jim Fogerty, Brenda Gunn, and Nancy Beaumont), which has committed us all to doubling our Annual Appeal gift total this year.  I was not at that meeting when that decision was make, and it is just as well, because I might have been tempted to cool their heels, but okay: I’m game.  I hope you will join those of us who will be trying to squeeze up our contributions.  Consider the challenge of mentioning to one of your colleagues that you will be making a contribution to the Foundation  –  try rolling your eyes around in your head like you really are in pain – followed by:  “so do you give to the Foundation?”   $25 is a great opening move for a new donor and it would mean so much to the effort to build a solid Foundation.

[Slide 12]


Council recognizes that much of the work of the Society does not entail a lot of cash outlay, but is generated from the labor and in-kind gifts of our members. We thank you for that.  I am grateful to the Finance Committee for being a good sounding board on all these matters, and to all our staff, especially the Executive Director, for their careful work in managing the financial good fortune of SAA.  Finally, I extend a special welcome to Peter Carlson, who will, I firmly believe, build some wonderful new maps to guide us steadily forward.


Thank you.

TreasurersReport-2014.pdf1.63 MB