Each year, PRSA’s financial goal is to increase our net asset balance by a minimum of one percent (1%) of annual operating expenses until we reach a 50% threshold, which is considered best industry practices. For the year ended December 31, 2013, PRSA’s net financial results yielded an $812,000 (7.0%) surplus versus a budgeted surplus of $126,000 (1.0%).
This surplus is attributable primarily to efficiencies realized through strict cost controls from management, increased use of technology, an insurance claim and favorable returns on our investment portfolio.
Even if you take a more conservative view for benchmarking performance (which I do) and don’t include the investment income or insurance payment, PRSA’s net financial results were still a surplus of $310,000, which we are using use to invest in a Learning Management System for better delivery of professional development, marketing the 50th anniversary of the APR and delivering other benefits and programs for our members.
PRSA increased its membership base to 21,651. Overall, our professional development events were popular and yielded an increase of 131% compared to the prior year’s revenue This increase, however, was offset by an 8% increase in expenses to provide member benefits and services.
As PR professionals know all too well, there are always unexpected developments. PRSA’s headquarters suffered damage as a result of a burst water pipe in July of 2013. The insurance company made a partial payment towards the renovations in 2013, which were not completed until 2014. Generally Accepted Accounting Principles require us to record the insurance claim as Miscellaneous Income in the period received yielding a 37% increase compared to 2012. The offsetting cost of renovations will be capitalized in 2014 and amortized over the remaining life of the PRSA office lease. Any additional insurance payments received in 2014 will similarly be treated as income upon receipt.
PRSA’s increased use of social media and other electronic forms of communications and strategic traditional marketing and promotions efforts resulted in significant savings in printing, postage and supplies. As technology improves and provides more cost-effective means of communication, we expect to continue to reduce costs.
PRSA’s investments performed well in 2013. The net result is that PRSA’s investment portfolio realized gains of approximately $343,000.
All in all, PRSA takes great care to maintain disciplined fiscal control and responds appropriately to economic trends and unexpected change in circumstances. We track and adjust budgeting as necessary. For fiscal 2013, PRSA exceeded its net budget goals as well as the net results for the same period in 2012; we surpassed our goal to give a minimum 1% of our annual operating expense to reserves in order to help ensure our fiscal viability for years to come. PKF O’Conner Davies, our independent auditors, reviewed our records and gave us a clean opinion.
I encourage all PRSA members to review our audited financial statements as of December 31, 2013 — which are available in the MyPRSA section of the website — and to contact me with any questions or concerns that you may have.
Mark W. McClennan, APR is a senior vice president with Schwartz MSL Boston where he heads its Consumer Technology Practice. He serves on the North American Digital Executive team for MSLGROUP. Mark is also a member of the PRSA National Board of Directors where he serves as the 2014 Treasurer.
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