PRSA News

PRSA Financial Report: Looking at the First Nine Months of 2011

As expected, PRSA’s Q3 financial report shows that revenue and expenses for the first nine months of 2011 are tracking below budget, due to continued economic weakness and cyclical business patterns.

We continue to believe that PRSA will finish the year with a slight surplus over expenses, and thus achieve our budgetary goals for the year. While PRSA has traditionally contributed 1 percent of budgeted expenses to its net asset balance (“reserves”) at year end, we anticipate that stagnant revenue, increased costs and a reduction in corporate spending on professional development will prevent us from doing so this year.

Through September, the Society realized a net deficit of $744,000 from operations, which is $50,000 better than budget. This compares with a net deficit of $582,000 for the same nine-month period in 2010. In response, PRSA implemented a cost-reduction program that lowered expenses across all operations by $316,000, which more than offsets the $266,000 reduction in overall revenue.

PRSA also took steps to address the continued underperformance of the nation’s economy and financial markets, by updating its investment policy to safeguard its assets and responsibly grow its investment portfolio. As a result, PRSA’s portfolio decreased only 5.7 percent during the first nine months of 2011, bettering the performance of the S&P 500, which declined 8.7 percent over the same period.

Finally, we continue to follow a highly focused budgeting process. A 2012 operating plan has been developed, based on the strategic priorities outlined in the Society’s 2011-2013 Strategic Plan, and translated into a balanced financial plan for the year. Given the possibility that PRSA will implement its first Membership dues increase in 10 years in 2012, the Finance Committee has reviewed two separate draft budgets for the coming year: One that anticipates passage of the dues increase by the Leadership Assembly; and a contingency plan with multiple options for possible expense reductions, should the dues increase not pass.

Several new Member benefits may be possible with the incremental revenue the proposed dues increase would provide. For example, PRSA is making plans to offer its entire catalogue of professional development webinars to its Members — for free — starting in 2012. This represents nearly $2,000 in annual savings for Members who participate in one PRSA webinar per month. It’s also consistent with the findings of PRSA’s 2011 Membership Value Perception and Satisfaction Survey, which confirm the high value our Members place on free webinars.

To aid our local Chapters’ revenue-generation efforts, PRSA will develop webinars exclusively for Chapters to use in creating paid professional development programs. This new benefit also will aid Chapter recruiting efforts: By making the total cost of PRSA Membership competitive with the non-member cost to view a single PRSA webinar, the small price difference will encourage non-members to join PRSA.

Other possible new Member benefits include loyalty programs to reward PRSA’s most-involved Members. These cross-channel programs will facilitate the engagement, retention and growth of PRSA’s Member base and, by improving the value proposition of PRSA Membership even further, also will aid in Chapter and Section recruiting efforts.

These are just some of the potential new Member benefits we’re planning, in the event the proposed dues increase passes. The additional revenue realized through a dues increase also will be used to reinvest in the Society and explore new product and service offerings, such as new programming for senior professionals; enhanced delivery systems, such as digital publications; a mobile version of PRSA’s website; and eLearning platforms.

Of course, should the dues increase not pass, PRSA will face some difficult financial decisions. In fact, many Leadership Assembly Delegates and other Members have asked what programs may be cut if the dues increase does not pass.

In identifying what products, services and benefits to cut, we looked  first at those that would directly impact the fewest number of PRSA Members possible. Among those cuts currently being considered are the possible elimination and/or reduction of 2012 programs, such as the Leadership Rally, in-person Leadership Assembly, free webinars (as currently provided), speaker stipends to Chapters and operational support for PRSA communities.

Once a decision is made by the Leadership Assembly regarding a dues increase, the Board will review — and if appropriate, approve — the 2012 budget based upon an operating plan that reflects PRSA’s fiscal realities and strategic priorities.

There is a wealth of information available on the PRSA website for members who are interested in learning more about the dues increase.

Moving Forward

As PRSA continues to strengthen its financial position, there are a number of considerations for the future. The market for many of the benefits delivered by PRSA is becoming increasingly competitive and, as a result, PRSA must continue to seek new ways to deliver Member value.

Volunteers and staff must therefore focus their efforts in a progressive fashion to increase the value of PRSA not only to existing Members, but also to other public relations professionals, who are not Society Members. The ongoing difficulty is that revenue sources remain flat, but the cost of doing business and delivering Member value continues to increase. These are significant consideration for the remainder of 2011 and for 2012 and beyond.

Philip Tate, APR, serves as treasurer on the PRSA Board of Directors and is senior vice president at Luquire George Andrews (LGA) in Charlotte, N.C.

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