PRESIDENT’S INVITED COLUMN
In January, I shared information about three initiatives undertaken this year to address issues raised in the ASA strategic plan and
promised to provide updates to members as work progressed. In this month’s column, Keith Ord, ASA treasurer and leader of the
financial status initiative, summarizes his work group’s deliberations and provisional recommendations. The ASA’s spending policy and
reserves are essential to the financial health of the association and, thus, its ability to carry out its mission. I thank Ord and the members
of his work group for their time and attention to these important issues that will affect the association for many years to come.
~ sally C. Morton, AsA President
Saving for a Rainy Day
Keith Ord, AsA Treasurer
R
ecent economic events have left us only too We began our deliberations by elucidating a set
well aware of the need for careful financial of operating principles for spending policy. Most of
planning. Further, we recognize our fund of these statements will have a familiar ring to them.
good ideas usually outstrips the dollars to pay for If implemented in both letter and spirit, we believe
them. As ASA President Sally Morton put it in her they will provide useful guidelines for the ASA in
charge to our working group, “After personnel, the the years ahead. Each activity or project undertaken
most important decisions made by an organization by the association (e.g., JASA) was first classified as
are its fiscal decisions. Decisions on how to spend income-producing, self-supporting, or needing sup-
reflect an organization’s values and should reflect port. Projects were then grouped into one of nine
its goals. Further, the amount of funds maintained broad categories, or “buckets” (e.g., publications),
as reserves determines the flexibility an organization so the overall health of major activities of the ASA
will have to weather economic ups and downs could be monitored in a flexible, broad framework.
and to make investments in future programs.” Spending policy is then defined at the level of indi-
Accordingly, we were asked to develop (a) a spend- vidual projects, whereas reserve policy is specified at
ing policy and (b) a long-term fiscal policy for the the bucket level.
size of ASA reserves.
We began by examining recent ASA Board deci-
Spending Policy
sions so we could understand the criteria currently
The general principles for spending policy are
applied to the assessment of new projects. We also
the following:
benchmarked the reserve policies of professional
organizations in related fields. The outcome of this
— There should be an overall rolling budget plan
second exercise suggests our sister organizations are
looking ahead for, say, five years that would include
struggling with similar issues and do not have com-
net income (or net cost) projections for each project.
plete solutions either. As the financial health of the
ASA is a matter of concern to us all, the purpose of
— Proposals for new projects should provide both
this interim report is to share the progress made to
an assessment of the project’s importance to the
date by the group and to invite suggestions or com-
ASA and a detailed business plan. This plan should
ments. These can be sent to
ordk@georgetown.edu.
include a market analysis, possibly based on a mem-
In recent years, the ASA has experienced a
bership survey, or at least responses from interested
decline in both library and personal subscriptions
sections and chapters. These new projects should be
to the journals, a small but steady decline in full
evaluated in the context of their cost and revenue
membership, and, more recently, a decline in adver-
implications, including possible cost-sharing and
tising revenues (as a result of the economic down-
profit-sharing with sections or chapters.
turn). Historically, the ASA has not used invest-
— New projects should normally be approved for a
ment income to pay operating expenses. Such a step
trial period of, say, three to five years. Toward the
should be avoided, save in extreme circumstances.
end of the trial period, the board would be pro-
Our brief was not to consider new revenue streams,
vided with a report on the progress of the program
but we recognize action is also needed on that side
and would then determine whether to support its
of the balance sheet.
continued operation.
JUNE 2009 AmstAt News 3
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