March 1, 2011
The recession has sent many of us to our kitchen tables to assess the state of our household budgets. In doing so, we’ve learned a lot about our values and beliefs: what we consider important in life, what we can and can’t live without and how we can do more with less.
The process of financial self-examination was similar at PRSA.
We expect that PRSA’s 2010 audited financial results, which will be announced after our March Board of Directors meeting, will show that we met or exceeded our goal of returning 1 percent of budgeted expenses to our financial reserves. You only need to contrast PRSA’s performance against nearly 50 percent of associations that withdrew money from — rather than contributed money to — their financial reserves last year to appreciate the significance of this accomplishment.
These results — achieved at a time when companies were cutting back on association memberships and professional development for their employees — couldn’t have been realized without significant sacrifice. PRSA implemented staff cuts, salary reductions and salary freezes; changed vendors and rebid existing contracts; pursued new technological efficiencies; eliminated underperforming products and services; reduced Board travel; and cut sales and marketing expenditures.
These and other cost-control measures have helped us eliminate $1.5 million in operating expenses from PRSA’s budget during the past two years.
Of course, we weren’t willing to sacrifice member value. Even as PRSA was slashing costs, we were also taking steps to increase member satisfaction. Some examples include upgrading important infrastructure, such as the PRSA and PRSSA websites; improving product and service delivery, from revamping the daily Issues & Trends e-newsletter to developing a mobile app for our International Conference; and improving PRSA’s reputation and visibility as a thought leader through a re-energized advocacy program.
We were mindful of the financial challenges that our members were facing, and also kept the cost of our annual dues at $225 — the 10th consecutive year without an increase — despite constant increases in the cost of doing business during that same time period. We also redesigned and expanded the career services available in our Jobcenter, offered free professional development and created a hardship program for members who had lost their jobs.
As a result, 80 percent of current PRSA members say that they are “likely to recommend” PRSA membership to a colleague, which tells us that we were able to cut costs without impacting the value we provide to our members.
At the crossroads
With several projects in our pipeline, such as creating a mobile version of the PRSA website — and since we’ve exhausted potential new sources of non-dues revenue — we’re reaching the point at which we may be unable to balance future budgets without sacrificing member benefits. Or, like the associations mentioned earlier, we may need to withdraw money from our reserves.
For example, we were not able to include the 1 percent contribution to financial reserves in our 2011 budget for the first time in recent memory.
For this reason, PRSA’s Board of Directors has engaged a Business Model Task Force to forecast and budget for 2011 and beyond. The Task Force also will review PRSA’s business model and recommend ways we can balance our budget in future years, while continuing to grow our financial reserves in accordance with association financial best practices.
The Task Force is expected to release its recommendations in April. At that time, we’ll talk with members about the potential impact of the Task Force’s suggestions.
Financial planning decisions can be difficult. But by keeping in mind what’s most important to our members and by continuing to look for ways to do more with less, we will ensure that PRSA has a bright and vibrant future.