IAC ponders dues increase to meet deficit

Group’s goal is to maintain services and minimize predicted funding decline

The Industry Advisory Council’s Executive Committee has begun assessing a proposal to raise membership dues to offset projected budget shortfalls in the next few years. IAC’s leaders said the group must find new ways to fund its programs and services and cover fiscal deficits that it expects to reach nearly $350,000 by 2011 if nothing is done to meet rising costs.

“We are carefully examining all aspects of our operations to determine how to provide for these increased costs while minimizing the need for dues increases,” said Bill Piatt, IAC’s chairman.

Members will discuss IAC’s proposed 2007 budget and the committee’s proposal to increase dues with the board of directors of IAC’s founding organization, the American Council for Technology, said Paul Cohen, IAC’s vice president for finance and administration.

The Business Model and Membership Committee (BMMC), which represents IAC member companies of all sizes, conducted a strategic review of IAC’s business model, Cohen said. In September, the committee reported to ACT that the organization needs to raise about $200,000 more a year beginning in 2007.

According to the committee’s findings, a budget surplus of about $40,000 in 2006 will turn into a shortfall of about $75,000 in 2007, with deficits increasing annually to about $350,000 in 2011.

The membership committee said opportunities for new revenue sources were limited. It recommended that the members consider making IAC programs pay for themselves, creating a fee-based job bank on the ACT/IAC Web site and raising membership dues.

IAC’s revenue picture for 2006
Click here to enlarge chart (.pdf).

chart

Piatt said the Executive Committee’s approach would allow IAC to operate in 2007 without raising dues, despite a dramatic increase in the services that IAC provides its members and stakeholders.

The level of service could be attained, he added, by trimming expenses and more carefully allocating funds to programs and activities.

Piatt said IAC seeks ways to fully recover the cost of events that benefit only a limited number of members, such as breakfasts or dinners and the Partners and Voyagers professional development programs. IAC partially subsidizes those activities now.

But Piatt said cost savings alone will not be enough to ensure the continued financial health of the organization.

Cohen said IAC members must formally approve any dues increase. The members’ comments received so far have all been supportive of the BMMC’s unanimous recommendation, he added. “We will most likely propose a modest increase in dues, phased in over time, as needed,” Piatt said.

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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