This past month the AAPG made some difficult decisions. We separated more than 20 percent of our workforce. This impacted some long-term, respected employees and the decision was not made lightly. We thank them for their dedication and service. The reasons for the change were not performance related but made to confront the realities of the AAPG’s current finances, membership trajectory, and our future strategic needs.
Historical Financials
In short, AAPG’s financial situation requires improvement, and as executive director, my role is to identify opportunities for increased efficiency and overall organizational strengthening. In eight out of the past 12 years, the AAPG has operated with negative net income (figure 1). The goal of a non-profit is to balance revenues and expenses, while maximizing member benefit. Investment income from the AAPG’s emergency cash reserves have helped backstop the finances of the Association during these years of underperformance. This level of support is difficult to sustain over the long term, and our cash reserves alone cannot address the structural financial challenges we face. As a member myself, I believe we all share the expectation of stronger fiscal stewardship moving forward.
Historical net income for the AAPG
Furthermore, these cash reserves have enhanced our longevity but not given us immunity from the marketplace. Recent market conditions have helped us maintain our cash reserves over time, and our investments have been well managed by the investment committee. This lifeline, however, carries market risk and the AAPG needs to find an alternative operating formula that allows it to control costs, generate revenues, and amplify our value proposition. Additionally, had past interest proceeds not been redirected to fund fiscal shortcomings, they could have been used to deliver either enhanced member benefits or to further fortify the finances of the Association for future challenges.
Historically, the Executive Committee has been responsible for the finances and staffing of the Association. The executive director’s job was to execute and operationalize the financial plan of the Committee. About the time of my hiring, bylaw structural changes were made, and the executive director now carries the financial performance and staffing responsibilities of the AAPG. Therefore, as executive director, I am responsible for addressing these challenges directly and acting when needed to protect the organization’s current and long-term health.
Imbalance
To understand the financial decisions facing AAPG, it’s important to be clear about how the Association actually generates and spends its money. Contrary to what many assume, membership dues revenue does not even cover the cost of producing our publications. The primary drivers of the AAPG’s finances are events. Events are prone to market sensitivities and represent north of 70 percent of our revenues and just under 60 percent of our expenses. Overhead expenses that include accounting, information technology, customer service, and support of our oversight or governance committees (Executive Committee, House of Delegates, and Advisory Council) represent approximately 25 percent of our expenses. Our expenses for programs, regions, sections, and divisions represent only about 6 percent of our expenses. While publications represent the remaining 9-10 percent of our expenses.
Spending 25 percent of our budget on back-office expenses inhibits our ability to maximize the membership value proposition. If these back-office expenses can be judiciously redirected, in part, to expenditures on programs, divisions, sections and regions, we can improve our member benefits, educational offerings, and help our members experience the AAPG at a more local level. Furthermore, we could also act as a more meaningful resource to our regions, sections, and affiliated societies. We are not talking about opening regional offices; instead, we need to deliver local-focused content and activities that enable our members to network and easily learn within their own time zone.
Our current areas of expenditure have been categorized and are highlighted in figure 2. This graph shows the clear imbalance of our expenditures on things that do not enhance the member experience.
Most of the expenditure in the back office are related to salaries and benefits or, said differently, represent employees (figure 3).
Difficult Strategic Choice
To address our imbalance of back- office expenditure, several options were evaluated but it became clear that the only available choice was to reduce headcount and to bring on external partners for our accounting, IT and portions of our marketing functions. I wish this was not the case and our valued employees didn’t have to be impacted, but with finite financial resources, it is the most direct path to pivot our existing cost structure to focus on delivering more member benefit.
A summary of the 2025-26 planned budget expenditures and revenue by category. The Experiences category is scaled differently than the other categories, as events represent about 75 percent of our revenues and 60 percent of our expenditure.
Detail of budgeted overhead expenses. Professional fees are largely related to consulting services.
Our recently published three-year strategy, approved by our leadership functions, calls for a focus on four strategic pillars. These pillars include :
- delivering a compelling value proposition,
- diversifying and growing revenue streams,
- building a resilient future (organization), and 4) delivering the current president’s focus. President Brian Horn has elected to focus on student and early- career professionals. The steps taken to reduce back-office expenses repositions the organization to meet these strategic objectives. Figure 4 illustrates how we are actioning this strategic plan.
This redirection to a more member benefit centric organization is going to take time. We will initiate new processes, foster relationships, and locate the right talent resources to execute our three-year plan. We hope members will grant us some time to make this transition.
New Partners
Over the past several months, we have taken a thoughtful, data-driven look at what AAPG needs to operate responsibly as a global organization in 2026 and beyond. That review focused on inherent risks, core capabilities, and the infrastructure required to support security, compliance, and reliable service to members. Like many member-value-driven organizations, AAPG cannot cost-effectively build or maintain all specialized infrastructure internally. In these cases, leveraging trusted partners allows us to move faster, reduce risk, and control costs, while ensuring we have the expertise and systems needed to operate at the level our members expect.
llustration of how we are implementing our three-year strategic plan. This figure was previously shared with the House of Delegates on Dec. 5.
Previous annual expenditures on impacted employees and projected future costs.
Clearly, an organization like ours needs accounting and IT functions that are proactive, responsive and performance-driven. To accomplish this in our next chapter, we have selected CliftonLarsonAllen (CLA) to serve as our accounting firm. They are a sizeable firm with specialized skills and deep industry knowledge in nonprofits, bringing additional automation to many of our processes and enhanced reporting capabilities. They currently perform services for approximately 3,600 professional associations like ours and 12,000 non-profits in total. Our Association will be assigned a team of CLA staff.
Centre Technologies will serve as our IT provider and deliver managed IT services. With operations in both Texas and Oklahoma, Centre Technologies brings deep experience supporting organizations across multiple industries, particularly oil and gas. As a trusted partner for leading energy companies, Centre understands the unique challenges of this sector and will help us strengthen digital security and transition
to cloud-based data management with software solutions that improve efficiency and scalability.
Resulting Savings
The anticipated annual savings associated with our new operating model are illustrated in figure 5. We expect annual savings to exceed $300,000, driven largely by salary and benefit efficiencies.
These savings are expected to offset transition costs within one calendar year. Employees affected by the separations were provided severance packages consistent with past reductions in force.
Conclusion
President Theodore Roosevelt once said, “In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” These decisions were not easy, but they were thoughtful and made with the long-term health of the Association in mind. They were discussed thoroughly and collaboratively with the Executive Committee, balancing analysis with the human impact involved. I hope you will join us as we look forward, while also recognizing and thanking those who have served AAPG with dedication over the years.