The purpose of this report is to inform APSA's membership about the association's financial health. This report provides an overview of APSA's assets and current financial operations.
The association's financial condition has remained stable in the face of a slow-growing domestic economy and volatile economic conditions elsewhere. Since APSA's last annual report, and as seen in table 1, we have seen our assets decrease in value from $25.9 million on September 30, 2010 to $24.7 million on September 30, 2011. During the same period, liabilities decreased from $5.1 million to $4.8 million.
Table 1 Balance Sheet: September 30, 2011 (With Comparable Totals for 2006–2010)
** In FY 2008–2009, APSA changed year end from June 30 to September 30, therefore budget is for 15 months.
For the recently ended fiscal year (2010–2011), operating revenue was $5.67 million (not including funds budgeted to be drawn from APSA's endowments), with operating expenditures held below budget at $6.2 million. Two of the association's primary revenue sources (memberships and the Annual Meeting) showed slight decreases—with the aforementioned economic challenges and the fact that both meeting venues were smaller and more western cities than the previous year contributing to the decline. At the same time revenues from APSA journals and publications have been stable.
The association has continued to implement the improved financial practices that we developed in previous years. As described in detail in last year's report, and under the direction of Regina Chavis, APSA's financial officer, the association has brought the association's accounting in line with best practices and has diversified its investment strategies with an eye toward reducing risks associated with portfolio concentration.
In sum, APSA continues to operate in a desirable environment, with stable membership, substantial income and growth-producing programs, minimal long-term liabilities, professional accounting practices, and a diversified investment portfolio. All of these factors combine to produce an operating budget which hews closely to anticipated income and expenses, year after year.
In the remainder of this report, we will discuss each of these topics in greater detail.
APSA INVESTMENTS AND NET ASSETS FOR FISCAL YEAR 2010–2011
The association's overall financial position is stable, with assets of over $24.6 million, a headquarters building and adjacent property, and a carefully monitored operating budget (see table 1 for the APSA Balance Sheet). Overall, APSA ended fiscal year 2011 with a balance sheet that reflected assets of $24.7 million and liabilities of $4.8 million, resulting in a net worth of $19.9 million. Of this net worth, $5 million is permanently restricted, just under $7 million is temporarily restricted as to its use, and more than $6.8 million is either unrestricted or board-designated.
APSA's financial statements, which also include figures for operations, investments, endowed programs, and grant-funded activities, show a decrease in total net assets at September 30, 2011 of $950 thousand for the fiscal year. The change in net assets for 2010–11 was chiefly due to an investment climate marked by the slowly recovering economy and downward pricing pressure on a wide variety of assets caused by debt-related problems in the United States and Europe. This performance compares to an increase of $1.515 million in fiscal year 2010, a decrease of $4.824 million in fiscal year 2009, and a decrease of $4.261 million in fiscal year 2008.
Our investments, as seen in table 2, were valued at $21.6 million on September 30, 2011. These assets can be defined by the purposes to which they are devoted. In round terms, there was $9.9 million in the Congressional Fellowship Program endowment; $3.8 million in the Trust fund; $2.3 million in the Second Century and related funds; $2.1 million in general operating funds, and $2.8 million in endowed award funds (all at market value as of September 30, 2011).
Table 2 Investment Portfolio Summary for Trust Pool and Endowed Funds Fiscal Year Ended September 30, 2011
APSA's portfolios have historically outperformed the S&P 500. Although portfolio diversification that includes high-quality investments in foreign markets can increase long-run risk-adjusted returns, this strategy does not imply that APSA will beat the S&P every year. This year they lagged this index slightly with the difference being largely explained by our international exposure.
THE OPERATING BUDGET FOR 2010–2011
The budget for the most recent fiscal year appears in table 6–Operating Budget. Our largest anticipated income sources for the year were membership dues and fees ($1.95 million), conferences and meetings revenue ($1.38 million) and journals and publications ($1.08 million). Our largest anticipated expenditure areas were the Congressional Fellowship Program ($1.03 million), journals ($887 thousand), and the annual meeting ($821 thousand). Once again, fiscal year 2011 ended within the operating budget.
Table 3 Operating Budget 1992–2011: A Multi-Year Perspective
* In FY 1992–93, APSA moved to a new budgeting system, making the figures in that year not comparable with those of prior years
** In FY 2008–2009, APSA changed year end from June 30th to September 30th, therefore budget is for 15 months.
Table 4 Operating Revenue Trends 2004–2011
** In FY 2008–2009, APSA changed year end from June 30 to September 30, therefore budget is for 15 months.
1 Includes (2) Annual Meetings 2008 & 2009
Table 5 Operating Expenditure Trends, 2004–2011
** In FY 2008–2009, APSA changed year end from June 30 to September 30, therefore budget is for 15 months.
1 Includes (2) Annual Meetings 2008 & 2009
2 Includes Congressional Fellowship Program and other Grants
Operating Budget: Actual Revenue for Fiscal Year 2009–10 and Projected Revenue for Fiscal Year 2010–11
Actual Expense for Fiscal Year 2009–10 and Projected Expense for Fiscal Year 2010–11
The budget anticipated that roughly 29% of total revenue would be derived from individual memberships; 20% from the Annual Meeting; and 16% from journals, sales, and advertising revenue streams. On the expense side of the ledger, Annual Meeting costs accounted for 13% of all operating expenses in 2010–11, Congressional Fellowship Program and other grant expenses were expected to account for 16%, while our three journals were expected to account for 14% of all operating expenses, followed by building and equipment (including depreciation costs) and governance and external relations at 8%. Business office stood at 7%, general administration was 6%, while publications and committee programs accounted for 5%. At 4% or less were costs related to member services, organized sections, the Teaching and Learning Conference, departmental programs and conferences, education and professional development, employment services, the Centennial Center, and endowed awards.
Compared to the prior year, total revenue realized from individual membership dues during 2010–11 remained steady, with rates increased by 3% over the prior year. The cost to deliver services in major program areas—journals, committees, departments, external relations, Annual Meeting, Teaching and Learning Conference, Centennial Center, publications, organized sections, education and professional development, employment, and awards—increased from 2009–10. Supporting these major program areas, the costs for core operations (membership services, general administration, building and equipment, business office, and depreciation) increased as well from 2009–10. (See tables 3, 4 and 5 for multi-year comparisons.)
OPERATIONS IN REVIEW: FISCAL YEAR 2010–2011
The recently concluded fiscal year was an active one. Initiatives included sustained efforts in the areas of public presence, expanded department and international membership, changes in our meeting siting and engagement policies, the Teaching and Learning Conference, continued annual workshops in Africa, mentoring, and graduate education.
The association has 27 employees at its headquarters in Washington, DC, who support the association to serve the membership's programming goals and to respond flexibly to new responsibilities and council-directed projects.
The 2011 Annual Meeting in Seattle marked the conference's return to the West Coast. It was well attended with more than 6,200 participants. APSA also held its eighth Teaching and Learning Conference in Albuquerque, New Mexico and provided valuable insight to some of our discipline's brightest teachers. For 2012, the Annual Meeting will be held in New Orleans, and the Teaching and Learning Conference will be held in Washington, DC.
The APSA website continued as a valuable resource for external audiences and as a collaborative workspace for committees and members. APSA's online resources—annual meeting programming, myAPSA, conference papers on SSRN, and departmental services—afforded APSA members expansive opportunities to enjoy direct access to and control of association services and membership renewal.
In terms of earned operating revenue and program expenses, the outcome for the year was within budget expectations. APSA earned approximately $5.67 million in operating revenues and incurred operating expenses of $6.22 million, excluding budgeted draws/fund transfers.
In 2010–11, APSA completed its tenth year of a publishing agreement with Cambridge University Press, and the ninth publication year of Perspectives on Politics. The Cambridge agreement has continued to benefit APSA by increasing revenues and by partnering on publishing operations. Cambridge has direct responsibility for collection of institutional (library) dues, the sale of journal advertisements, and the management of royalties and permissions. APSA receives a royalty, or share of the revenue that Cambridge brings in, from each of these areas. In addition, Cambridge provides funding for all three of the editorial offices (APSR, PS, and Perspectives on Politics). On the expense side, Cambridge is responsible for marketing, production, printing, and distributing all three journals. The current contract expires December 31, 2011. APSA is in the process of renewing our publishing contract with Cambridge University Press, based on a competitive bidding process involving four other publishers.
We speak for the entire APSA staff to say we welcome your inquiries and suggestions, and look forward to your continued support, as APSA embraces a new year of initiatives, improvements, and growth.
Please note that further information is available in the audit report, available from the APSA office at [email protected] or call 202-483-2512.
