As has been noted previously, 2010 was a year in which many Americans, including the volunteers and staff of PRSA, sat down at our proverbial kitchen tables to assess the state of our household budgets, make hard decisions about what we could and could not live without and find new ways to do more with less — all in an effort to keep our finances in the black.
It’s against that backdrop that I’d like to provide you with an overview of PRSA’s 2010 financial results.
Last year, PRSA realized a modest surplus from operations of $73,000. In addition, investment returns added $197,000 to PRSA’s reserves, otherwise known as its net asset balance or “rainy day” fund. This information is supported by the unqualified opinion issued by certified public accounting firm PKF, PRSA’s independent auditor.
As a result, PRSA met its annual financial goal of returning 1 percent of budgeted expenses to the Society’s financial reserves. In keeping with association best practices, PRSA is working to grow its financial reserves to 50 percent of its annual operating expenses, up from 33 percent of annual operating expenses currently.
Last year was not without significant challenges, however. Returning even a small surplus required PRSA to continue its aggressive cost-cutting, which was accomplished by rebidding contracts, reducing staff, freezing salaries and implementing cost-efficient technologies.
In fact, over the past several years, PRSA has cut an incredible $1.5 million from its operating expenses. So much so that the question we now face is, “where do we go from here?”
With no room for further cuts and no obvious sources of new revenue, the current budget forecast anticipates that PRSA will not be able to make the minimum 1-percent contribution to its financial reserves in 2011. Like many who hold PRSA leadership positions, I cannot recall another time that the projections have fallen short in this regard.
At the same time, PRSA continues to increase the scope and number of benefits that it delivers to its members, which last year included things like a greater number of free webinars; a hardship program for out-of-work professionals; more business-service discounts; additional Jobcenter features; “Find-a-Firm” functionality on PRSA.org; a retooled industry advocacy campaign, including “The Business Case for Public RelationsTM”; improved online member discussion forums; and a completely redesigned daily edition of Issues & Trends.
In addition, PRSA has not increased the cost of member dues since 2002, despite a more than 21-percent increase in the Consumer Price Index (CPI) over the same time period.
The Business Model Task Force, engaged by the Board of Directors, is currently evaluating the Society’s 2011 financial forecast and will be making recommendations for ways to maintain the Society’s future financial health. Quite frankly, PRSA needs a better sense of where future revenue will come from, which will help to ensure its ability to invest in products, services and benefits that keep member-satisfaction metrics, like retention and “intent to recommend,” high.
It’s not an easy task, and one the volunteers and staff certainly don’t take lightly. We know many of you have felt the financial constraints of the recession just as much as PRSA has, if not more. A great deal of time has been spent thinking of ways that PRSA can offer its members more, while also securing its financial future. And we’re going to continue to come up with innovative ways that meet this goal.
Next month, we hope to be able to update you on the Task Force’s work and recommendations, and I’m confident that this is an issue we can solve together. In the meantime, if you have any feedback you’d like to offer, please feel free to add your thoughts in the comments below or email me directly at firstname.lastname@example.org. I’d be happy to hear from you.
And for anyone wanting more information on PRSA’s audited financial statements or member benefits, please visit the “MyPRSA” section of www.prsa.org.
Philip Tate, APR, serves on the PRSA Board of Directors as treasurer and is senior vice president at Luquire George Andrews (LGA) in Charlotte, N.C.
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