Message from the Treasurer

Ron Dimock

New Policy on Named, Endowed Funds

While the Society is very happy to have new awards such as the recently available Skinner Scholarship, the Executive Committee felt the need to provide guidelines for how new funds might be established. One concern, of course, is that some funds will be in competition for contributions from prospective donors. Therefore, the Executive Committee approved the following policy at its meeting in San Antonio in January. This policy is also found on the SICB web site under Resources > Policies.

Policy on Establishing Named Funds

Rules:

1. A new program must state clearly its intended purpose.

2. New programs will normally require a minimum of $25,000 to establish an endowment whose earnings will be used to support the proposed activities according to the formula specified below.

3. Normally, 4% of the trailing 5 year average of the value of the fund will be available for expenditure on an annual basis for the designated purpose of the fund. However, in no case will expenditures be allowed to invade the principle of the fund. Exceptions to these rules must be granted by the SICB Finance Committee. For funds with less than a 5 year history, the SICB Finance Committee will determine the amount available.

4. Mechanisms for the disbursement of the funds consistent with the stated purpose of the program must be clearly established. If a committee determines how funds are to be disbursed, e.g., determines award recipient(s), what is the composition of the committee, how will the committee be formed, and how often will membership on the committee be changed? An example is the DCPB Bartholomew Award in which the procedures are spelled out in the DCPB Bylaws, Article XIII, B.

5. Programs may be discontinued by the SICB Executive Committee provided proper legal issues associated with the disbursement of remaining funds are resolved.

6. The SICB Finance Committee will oversee the activities of the program to insure adherence to the stated purpose of the program and adherence to all financial procedures governing income, investment, and disbursement of the associated fund.

Procedures:

1. Proposals for new programs must be submitted to the SICB Executive Director, who will forward the proposal to the SICB Finance Committee. The Finance Committee will review the proposal and it may recommend modifications of the proposal to the individual, group of individuals, division or organization making the proposal.

2. The SICB Finance Committee will make a recommendation to the SICB Executive Committee for approval or disapproval of the proposal.

3. The SICB Executive Committee must approve the proposal.

More Budget Belt Tightening Required

The Society remains financially very solvent. However, the general operating budget continues to generate a deficit every year. For example, for fiscal year 2008 the anticipated overrun is about $51,000 while fiscal 2009 is projected to be approximately $35,000 in the red.

The overages for these 2 years are occurring even though the Society managed through Burk & Associates' negotiations, to have between $30,000 and $50,000 in audio visual expenses waived by the hotels/convention centers in San Antonio and Boston. These 'donations' at these venues were the result either of ongoing construction or promotion of a new facility, both of which worked to the Society's advantage.

It is very unlikely that Sue Burk can keep up this run of excellent negotiation for 2010 and beyond. That means that in addition to the budget overruns of recent years, SICB can anticipate an additional expense of perhaps $40-50,000 per year for A.V. at the annual meeting. Obviously the Society cannot sustain cost overruns on the order of $70-80,000 per year.

As the budget recommendation for fiscal 2010 is developed this summer and fall, the Finance Committee will be looking hard at ways to balance the general operating expenses. Increasing some fees or decreasing some subsidies and other expenses are areas that will be targeted. Of course if the Society can grow its membership, that would help offset expenses.

Development Committee Revitalized

Under the very able guidance of Tom Daniel, University of Washington, the long-dormant Development Committee will be rejuvenated in 2008 and beyond. A concerted effort to attract corporate sponsors and other donors to fund aspects of the Society's activities could greatly improve the Society's annual balance sheet. If there are members who would specifically like to assist Tom as members of the Development Committee, please contact our Secretary, Lou Burnett, who will coordinate any such interest.

Dow-Jones Nausea

The roller-coaster ride on the stock market the past few months has not been pleasant for anyone. However, SICB's financial manager very astutely held nearly 45% of the Society's investment portfolio in cash and cash equivalents beginning early last fall. The outcome is that our overall invested assets have decreased only about 3% since mid-December while the Dow, S&P and Nasdaq have alternately been in free-fall and spectacular (albeit short-lived) recovery. Our manager now is poised to capitalize on what will be some bargain mutual funds when the market finally stabilizes. If only some of us could have managed our personal 401(k) s as well...