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Vol.29 No.1, January 1997
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Vol.29 No.1, January 1997 |
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As a membership organization it is important that you, the members, have an understanding about the finances of ACM SIGCHI. The purpose of this article is to provide a framework for this understanding. I'll summarize SIGCHI's current financial status and guidelines, give you information about SIGCHI's budget process, and provide you a view of how SIGCHI's financial status positions the organization to take action to better serve the needs of the members in an efficient, cost-effective manner, and invite you to influence your society's budget.
Here's a brief snapshot of ACM SIGCHI's financial status. ACM SIGCHI is alive and well financially. SIGCHI officers have partnered with ACM professional staff to manage SIGCHI's financial assets. SIGCHI's 1997 budget which runs through June 30, 1997 is approximately $2.5 million dollars against expenses of the same amount. Over the last five years we have built a Reserve Fund of over $1 million. This Fund Balance acts as the organization's contingency fund in cases of unexpected negative financial events. ACM SIGCHI's current requirement for this Reserve Fund based on guidelines of the ACM auditors is approximately $630,000 dollars. The Reserve Fund is also a source of funds for programs to serve SIGCHI members. Over the past seven years, the ACM SIGCHI's annual budget has doubled as the organization has grown in size and in the breadth and scope of services provided. Throughout its existence, ACM SIGCHI has functioned through a mix of volunteer effort combined with professional assistance from ACM and other paid support staff. With downsizing in the private and public sectors in recent years, volunteers have less free time available. Also, ACM SIGCHI's service needs for members have grown in complexity. From a financial point of view, it makes good sense to have increased SIGCHI professional staff. These staff can partner with SIGCHI volunteers to help manage the conferences, arrange for special programs to meet the professional needs of the members, and handle ongoing programs. By partnering with professional services, SIGCHI's members will be more satisfied and the organization will continue to be healthy and grow. With the financial assets SIGCHI has now, the organization is well positioned to take action. SIGCHI Executive Officers are working on these plans now. Please see "The Chairs' Column" in this issue for more details.
Now, here's some background on SIGCHI's financial status and the organization's budget process.
The Association for Computing Machinery (ACM), SIGCHI's parent organization, is an Educational and Scientific Organization, classified by the United States Internal Revenue code as a 501(c)(3). This is commonly referred to as a non-profit, or a not-for-profit organization. Because of this status SIGCHI is not required to pay federal taxes on their income (like corporations often do) and, in select states, SIGCHI is exempt from paying state taxes for goods and services purchased. This status has also become recognized and understood by governments all over the world and affords SIGCHI a favorable environment in which to provide services to its members. In return for this favorable treatment the U.S. Internal Revenue Service requires compliance with a strict set of regulations as well as extensive and regular reporting. ACM consolidates all of their operations and handles these requirements on our behalf.
One of the common misperceptions about a non-profit organization is that it should not make money on any of its operations. In reality, the only real difference between a non-profit organization and a for-profit organization is what is done with the money made. In a non-profit organization this money is further invested through programs and services designed to enhance the field and profession. The Internal Revenue Service requires that "no part of (the organization's) net earnings inures to the benefit of any private shareholder or individual."
Ok, with that background on SIGCHI's non-profit status, let's take a look at the organization's budget. ACM SIGCHI, like many similar organizations, has three streams of revenue: membership, publications, and conferences. These are also the major areas of expense. There is a fine balance between these sources of revenue and the expenses in each of these areas. The guideline that your elected officers, the Executive Committee of SIGCHI, have employed for the last three years is that each area of the budget should be self-sustaining, with the revenues covering expenses. Previously, this had not been the case, and monies in one area would underwrite expenses in another. Ensuring that each area is self-sustaining helps the organization to understand the value that the members receive in each area compared to the costs to members. As the Vice-Chair for Finance for SIGCHI, I have worked to implement self-sustaining budgets for each budget area so that the cost-benefit of each service is clear to members.
In the current fiscal year 1997 budget, the proportion of the budget that these three areas comprise is as follows:
The total budget is $2,449,203 dollars.
Each Fall, the Vice-Chair for Finance works with the SIGCHI Program Director to build a base budget for the next fiscal year. This base budget includes all areas that the organization has made promises to the membership and to ACM to provide. Examples of this are membership, publications, and conferences. Then for the past three years, I have also sent out the templates for budget proposals to all the members of the Extended Executive Committee for SIGCHI. (The Extended Executive Committee is comprised of the elected SIGCHI officers plus the appointed advisory or adjunct Chairs that the ACM SIGCHI Chair defines. These people are listed inside the covers of each SIGCHI Bulletin). These budget proposals are for ongoing or new special programs for members. Any member of SIGCHI can submit a budget proposal each year by teaming up with a member of the Extended Executive Committee. If you have a proposal and don't know which EEC member it is most appropriate for, please send it to me and I will ensure that it is given to the appropriate EEC member. Examples of the special programs are the SIGCHI Development Fund, Continuing Education Group, and Membership Survey. The SIGCHI Executive Committee and Program Director meet face-to-face in December and discuss the base budget and then the budget proposals. After the base budget is updated and agreed to, the group discusses and votes on the budget proposals. The proposals are rank-ordered in case there are not sufficient funds in the budget for all approved proposals. The Executive Committee then votes to approve the budget as a whole. The budget is reviewed and approved by ACM and takes effect the following July 1st.
SIGCHI officers also review the budget in the Summer. If budgeted expenditures are lower than actual expenditures or actual revenues are higher than budgeted revenues, there is an opportunity to discuss additional budget proposals for the current year at that time.
As a note, there are other budget procedures that can be used to address immediate SIGCHI concerns. SIGCHI has the flexibility to take action following documented processes as needed.
Now, the elected officers working closely with the SIGCHI Program Director and other ACM professional staff, have improved the budgeting process so that it is much more accurate and so that shortfalls do not occur. SIGCHI has also met the guidelines from the ACM auditors that the organization build a Reserve Fund to cover unforeseen negative financial situations. This Reserve Fund is to contain sufficient monies to cover 50% of the organizational operating expenses and 20% of the conference expenses for each budget year. Thus the required amount of the Reserve Fund changes from year to year. Given that the overall budget has doubled over the last seven years, the required size of the Reserve Fund has increased as well. So, the organization has strengthened its budgeting process, built a Reserve Fund, and in the last few years, has returned a surplus from the budget to the Reserve Fund as well.
Let's take a look at SIGCHI's budget from fiscal year 1991 to the present time (Table 1). Note that the organization has only in the last few years stabilized the budget with a consistent surplus.
Table 1: SIGCHI's Budget 1991-5 (US$)
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Financial Income Expense Surplus (loss) Reserve Fund
Year
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1991 1,574,722 1,589,978 (15,256) 456,546
1992 1,425,175 1,390,736 34,439 440.985
1993 1,810,061 1,798,398 11,663 463,235
1994 1,646,936 1,525,376 121,560 584,795
1995 2,066,761 1,990,146 76,615 661,410
1996 2,128,377 2,013,987 114,390 770,800
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So, you can see the growth in the budget and the last few years of consistent surpluses. A couple of comments about the surpluses. What is the source of these surpluses? The surpluses are achieved by the conferences and by the lack of expenditure of budgeted monies in other areas of the budget. On the former, the conference surpluses are being reviewed and adjustments are being made to the budget model for the conferences in order to keep member expenditures for conferences down to the lowest amounts. On the latter, the lack of expenditure of budgeted program monies does point to a specific problem -- the decreasing amount of volunteer time to initiate and manage programs. This shortage leads the Executive Committee to seek additional professional staff for SIGCHI in order to better serve the members. To get new programs for members initiated, the organization needs to leverage the skills of professional staff to handle and take care of numerous responsibilities that the volunteers have neither the time nor background to do, and then free the volunteers to provide the unique value-add they contribute based on their skills and experience.
For example, SIGCHI will now have a full-time conference management professional in headquarters to provide consistent and timely coverage of conference needs. There will also be a part-time SIGCHI professional to manage our website and handle online resources such as the HCI bibliography. SIGCHI also needs additional staff to focus and follow through on membership development activities. And finally, to support all of these efforts and provide coherent direction, SIGCHI needs a full-time Director for the organization to oversee and manage these activities with SIGCHI, working in partnership with the elected SIGCHI officers. SIGCHI is positioned financially to take these actions in order to increase the value and visibility of SIGCHI to its members, create an environment to draw from all areas of the HCI community, to make SIGCHI the focal point for HCI in the world, and to be the heart of SIGCHI member's professional network.
It has been a pleasure and an honor to serve the ACM SIGCHI community as its Vice-Chair for Finance for the past three years. Please contact me if you have questions or comments about this article. My email address and phone number are listed on the inside cover of this SIGCHI Bulletin.
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Vol.29 No.1, January 1997 |
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