The Current State of Affairs

The STC Head Office has provided information about how this financial crisis came about, how they have already cut costs, and what they would like to do to remedy this situation. In addition, they have provided answers to frequently asked questions. You can read the articles about each of these items at http://www.stc.org/LCR/state-of-the-society.asp (you must be able to log into the STC site to read these).

However, if you want to read a summary before deciding if you want more detail, here are the highlights:

• The shortfall for 2009 is $1.2 million USD, but Head Office plans to cover that shortfall with $400 000 from their reserves and $250 000 through a line of credit. This means that they have to obtain about $500 000 from other sources.
  
  
• The shortfall is due to a drop in reserves that were held in investments, a decrease in the number of members, and a decrease in attendance at the annual conference. These are the three main areas that the STC usually depends on to sustain itself. However, although members are a source of income, the cost of serving a member actually exceeds the cost of a membership. To keep the cost of membership down, Head Office has been making up the difference through the revenue generated from their conference and their investments. Unfortunately, this year there is not enough revenue.


• Head Office has implemented cost-cutting measures such as moving the office to cheaper quarters and not replacing two staff members.


• They would like to make up the $500 000 shortfall by raising dues, increasing educational offerings (for example, more Web seminars), asking for individual and corporate donations, and asking chapters for any surpluses they have in their bank accounts. Our chapter has a substantial surplus from previous years when our Education Days were very successful.


• To encourage all chapters to provide programs, and to spread the wealth around to needier chapters, Head Office is changing its accounting method to zero-based budgeting. This means that chapters must submit a budget to Head Office each fiscal year (something that we already do), but now Head Office must approve it prior to us implementing it. Then, instead of regularly receiving funds based on the number of members of the chapter, chapters will receive funds only if they cannot cover all the budgeted expenses themselves. Any excess reserves or profit that a chapter accummulates must be given to Head Office.
  

Lots of other money-generating and cost-cutting measures have been suggested and debated. If you want to follow these discussions or add some of your own, check out the STC Ideas group on the Ning network (http://twitzap.com/u/MDk?xgi=6X1VNGI).

As you can imagine, this chapter is reluctant to surrender the reserves in our bank account with little direct benefit to our members. Also, the legal relationship between our chapter in Canada and Head Office in the USA is not clear. Both sides are working to understand what this means. As we understand more and choose a definitive path, I'll share this information with you through this blog.

In the meantime, the administrative council of this chapter is trying its best to ensure that you get as many (if not more) services and programs as we have offered in the past. We hope to minimize the effects of the turmoil surrounding Head Office. Let us know if you have specific concerns, questions or suggestions.