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MONEY MATTERS

The FY2000 Budget:
New Challenges, New Priorities

Jeffrey H. Altschul

At its fall meeting, the SAA Board of Directors passed a budget for fiscal year (FY) 2000. As with all budgets, this one acts as a guide for the executive director, the treasurer, and the Board to track the Society's fiscal progress. There is nothing sacrosanct about the budget; we make it using our best guesses about what the future holds for membership, the size of the Annual Meeting, and other factors affecting SAA finances. These change throughout the year and the budget provides the framework for reacting to these changes.

The FY2000 budget marks a major departure in how the Board approached the budgeting process. Our priorities switched from funding long-term reserve to increasing member services. Some existing programs have received increased funding; new initiatives are being launched. Before I discuss these changes and their impact on the FY2000 budget, a little history is in order.

At the beginning of FY1997, the Society was in a precarious financial position. Our long-term reserves had dwindled to around $80,000, or 8 percent of our operating budget. Although it may seem like a lot of money, a rule of thumb for associations is that long-term reserves should be no less than 30 percent, and ideally, an organization should have around 100 percent of its annual operating budget in reserve. In response, the board passed a policy that SAA reserves must be at or above 30 percent of our operating budget. We set in motion a 5-year plan to achieve this goal that focused first on fiscal restraint and second on initiating new revenue streams.

The plan worked much faster than we anticipated, largely due to the diligence of the executive director and the SAA staff. Financially, FY1998 and FY1999 were spectacular. Our surplus in 1998 exceeded $200,000. Although 1999 is not over, we anticipate a surplus between $100,000 and $150,000. The FY1999 budget's operating expenses were set at about $1.1 million, leaving us a target for long-term reserves of about $330,000. By April 2000, we will reach this target.

Success came at a cost. Funding for most member services remained flat. Critical programs such as publications, education, and public relations were not supported at desired levels. Staff positions were difficult to fill, and volunteers from the membership had to pick up the slack.

Reversing these trends has now become a major priority. We do so, however, cognizant of our recent financial past. Key FY2000 budget assumptions are:

Based on these assumptions, the FY2000 budget was developed. Although the document is more than 100 pages, it can be broken down into its key components as follows:

Budget Category Gain/(loss)

Governance

(60,393)

Member Program and Services

(12,138)

Public Programs and Services

(155,789)

Publications

(70,780)

Meetings

59,736

Awards

(2,429)

Membership

399,753

Organization and Administration

(131,681)

Total

26,279

Even in this summary fashion, it is clear that we are relying on membership dues and a good Annual Meeting to pay for all other services. In this respect, the FY2000 budget is no different than previous ones. Unlike previous years, however, we are not trying to create a large surplus. Although we have budgeted to meet the 2 percent Board-mandated surplus and to place this amount in long-term reserves, our focus in FY2000 is squarely on improving member services. We have worked hard and long to get to this position, and we must remain ever diligent to remain here.

Jeffrey H. Altschul, treasurer of SAA, is president of Statistical Research, Inc., in Tucson, Arizona.

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