Membership dues are one of PRSA’s most important income generators, so a drop of any kind is not good, but we were prepared for worse. The key to addressing recessionary challenges is to cut expenses quickly and appropriately, without degrading quality. It’s a balancing act that PRSA performed well. There were plans going into the year for 4 percent or 10 percent reductions depending on trends, and we decided relatively early that it made the most sense to implement the more aggressive cost reductions. Expenses were cut by more than $1.1 million and involved some reorganization that improved efficiency and reduced the national office staff. At the same time, we focused on increasing the value of PRSA membership, delivering some important new programs, including a redesigned Web site and “The Business Case for Public Relations,” an industry advocacy campaign.
We are seeing some more positive indicators now, and we’re forecasting that the year will end with a slight income surplus over expenses. As a result PRSA will slightly grow its reserve. Although we do not anticipate meeting several of the revenue goals set during the budgeting process in late summer of 2008, PRSA is in a good position to deal effectively with continued uncertainty.
After nine months of operations, the Society reflected a net deficit of $708,000, which is $265,000 lower than budgeted last summer. Compared to the same nine-month period in 2008, 2009 net results are $1,388,000 less favorable, but there is a significant timing difference contributing to this number. In 2008, PRSA had recognized nearly $1,100,000 in revenue from the International Conference. Since the 2009 International Conference is taking place in November, revenue this year is deferred until that time.
Dues from all sources are trailing $508,000 (11.7 percent) from budget and $399,000 (9.4 percent) from 2008 for the same period. General membership is the largest contributor to the slower than anticipated results, followed by Professional Interest Section membership.
As you’ve probably noted with your 401K programs, the market has improved over the year. PRSA’s portfolio increased 18.5 percent over the first nine months of 2009, surpassing the 17 percent performance of the S&P 500.
These tough times have provided an opportunity not only to cut spending but to think creatively about how to offer greater value. This has resulted in some new member benefits, including many to help those hit particularly hard by the recession. Initiatives included a “Hardship Program” to help unemployed and disabled members with dues, Jobcenter innovations to improve the job search process, an insurance program, free PD webinars, lower pricing for the international conference, support for Chapter benchmarking research, and other innovations.
Finally, the Board is currently reviewing strategic priorities for 2010, taking a very conservative approach to budgeting as we watch economic trends closely. It is too soon to say “normal” has returned, and we are proceeding accordingly.
Like many of you, PRSA leadership and staff fought through many tough challenges this year, and they have every reason to be proud of their performance against incredible obstacles.
Thomas E. Eppes, APR, Fellow PRSA, is Treasurer of PRSA.