AAPG Budgets and Forecasts – Projections are based on continued current trends of revenue and expense. New sources of revenue while managing expenses will be required to turn these deficits into break-even results.
Budget matters (noun). We sometimes marvel at the size of the AAPG and all of its moving parts, some of which are going in quite different directions. We have three governing bodies: Executive Committee, Advisory Council, and House of Delegates; three divisions (Division of Environmental Geology, Division of Professional Affairs, and Energy and Minerals Division); 12 Sections and Regions; more than 30 standing committees (with several subcommittees), and several ad hoc committees; and a myriad of services and products that are available to members, ranging from the BULLETIN to Career Services. Remember that the lion’s share of the work is provided by volunteers, who serve for any number of different reasons; their dedication really is most impressive.
In short, AAPG (we) is all things to all people (us).
AAPG has five primary sources of income: members’ dues (only 14 percent of the revenue budget), advertising in the EXPLORER and online, conferences and conventions (~55 percent of the revenue), education, and publications. The annual budget has grown from $11 million to nearly $18 million during the past seven years.
Running an operation this large and complex means that we must keep a watchful eye on the budget, and the AAPG staff does a superior job of this. Historically, our annual surplus/deficit fluctuates with good and bad years (see graph), and our goal is to maintain a rolling balance. Fluctuations in the budget are usually correlated with three factors: the income generated from the annual and international conventions, Special Publications, and the performance of our operating fund investments in the financial market. Unfortunately, this year and possibly next year are not strong years for the budget (see graph).
Budget matters (verb). We have lofty goals for increasing our services, such as more education; for international expansion, such as a local office serving each Region; for regional Distinguished Lecturer tours; and for holding Regional meetings similar to the current Section meetings. We know that these plans will be met, but we must temper the pace of attaining our goals with the reality of the budget. Getting costs under control and generating appropriate revenue are imperative in the coming years.
Given this scenario, what methods are the Executive Committee considering for addressing these budgetary matters?
- A slight increase in dues will be proposed. There has not been an increase in dues for three years, and they have been raised only four times during the past 15 years, for an average increase of less than 3 percent/year. Given the rate of inflation, the effort to increase our international presence, and the doubling in the services offered to members during the past 12 years, we think the relatively low dues are remarkable. We also think that our dues structure is quite competitive with our equivalent societies that are roughly our size in total members. An increase in dues of $10 US will address about $250,000 US, or about 15 percent of the operations budget shortfall.
- A slight increase in registration fees for upcoming annual and international conventions (ACE, ICE respectively) will also help close the budget gap while still keeping these conferences competitively priced.
- An increase in the shipping charges of the hard copy of the BULLETIN to those subscribers. One of the requirements of AAPG membership is that each member will receive a copy of the BULLETIN and EXPLORER as part of his/her dues. In April 2004, the Executive Committee voted to make the digital BULLETIN the primary method of delivery for all members.
- The intent was for those members who continue to receive the printed BULLETIN to pay for some of the shipping costs. A substantial amount of the shipping costs (80 percent) is still being absorbed by the Association, and these costs will be switched to those who choose to receive a hard copy of the BULLETIN. Increasing the shipping costs for those members who receive the hard copy BULLETIN will raise about $40,000 for the budget.
A decrease in the amount of members’ travel costs that have been defrayed by the Association. During the past four years, the total member travel costs paid by the Association have doubled (more than $1.46 million US). A travel policy is being developed that will fairly address what kind of travel costs will be reimbursed by the AAPG; these changes will also make a significant impact on the budget.
- All AAPG programs are currently being reviewed to find minor cost savings in the short term. Small savings in multiple programs will have an important cumulative effect on the budget.
In summary, although minor increases in these fees along with careful stewardship of our expenses will go a long way toward redressing the near-term budget deficits, for the AAPG to continue to grow and serve all of its members’ demands, we need to develop new, additional sources of income to achieve our goals … and that will be the subject of a future column.