FINANCIAL RESULTS OF MILITARY
As MOAA’s new
CFO, I am pleased to report that 2009 was a very good year for the association. Col. Glenn Zauber, USAF-Ret., MOAA’s CFO for the past 15 years, retired in February 2010. He left our association in ex- cellent financial shape, with more than five years of cash reserves
and a strong focus on governance and transpar- ency. He was an outstanding financial manager and will be missed. In 2009, many associations were reeling from the 2008 market collapse and shifted their portfo- lios from equities and alternative investments to cash and fixed-income positions. MOAA, on the other hand, utilized a disciplined, rather than re- active, approach to ensure our portfolio balanced our tolerance for risk and our investment goals. As a result, MOAA’s focus on asset allocation earned an impressive 25-percent return for 2009, recov- ering a large portion of our 2008 losses. MOAA has four primary revenue sources:
dues, investment income, advertising income, and royalties from sponsored products and ser- vices. In this prolonged recession, there are pres- sures on all revenue sources, and as we learned in 2008 and 2009, investment income can be quite volatile. Fortunately, our strategic-planning process has kept us focused on opportunities to expand non-dues revenue sources. In total, rev- enue for 2009 was $38.1 million. On the expense side of the ledger, MOAA spent
$21 million on behalf of its members. Expenses fall into four major areas: legislative affairs (MOAA’s original purpose and still its primary mission) is 11 percent of the expense budget; informing mem- bers through Military Officer and MOAA’s Web
Base,
www.moaa.org, accounts for 35 percent; supporting our councils and chapters is another 10 percent; and the balance helps our members by providing essential benefits and information, as well as MOAA-sponsored products and services. In 2009, MOAA provided $8.9 million in the form of interest-free loans and grants to 1,646 children of military families for undergraduate education. The Scholarship Fund board of direc- tors has approved awarding $9.1 million to more than 1,650 students from military families in 2010. MOAA’s Statement of Financial Position re- flects that our assets primarily are investments and interest-free loans that have been provided to students from military families. Cash and invest- ments account for $130 million. The association had $36.1 million in outstanding loans to 3,973 students, as of Dec. 31, 2009. MOAA’s liabilities primarily are owed to MOAA members. MOAA has collected $52 million in both annual and life membership dues that will be used as earned over the next 60 years. The Widow’s Trust is a $5.5 million obligation to ensure beneficiaries of an expired MEDIPLUS® plan will receive the health care insurance they were promised. With net assets of $114.2 million as of Dec. 31,
2009, MOAA is financially sound to continue serv- ing America’s commissioned officers and their families. I am committed to ensuring your asso- ciation maintains strong accounting practices and internal controls, accurate financial reporting, and a disciplined approach to investing. Contact MOAA’s Member Service Center at (800) 234-6622 or e-mail
msc@moaa.org to have a copy of MOAA’s audited financial statements for 2009 mailed to you.
— Col. James W. O’Brien, USAF-Ret.
Chief Financial Officer
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