The Executive Committee at its July meeting approved
the preliminary budget for the current AAPG fiscal year (July 1,
2003 -- June 30, 2004). AAPG has evolved into an $11 million+ per
year business.
Our main sources of income and expense change over
time and thus careful attention to detail is required on both sides
of the budget.
The current year operating budget is approximately
$11.8 million. This budget projects AAPG being in the black by about
$50,000-$60,000. Last year’s business was in the red by a similar
amount. Five out of the last eight years have lost money.
Obviously, I would like to see this statistic reversed.
Your Executive Committee is committed to cutting expenses and/or
raising income this year to ensure positive results.
AAPG’s top six (91 percent of total) sources of income
are:
- Conferences and meetings (36 percent).
- Service fees (16.2 percent).
- Dues (15.2 percent).
- Advertising (11.4 percent).
- Sale of publications (7.7 percent).
- Interest and dividends (4.5 percent).
• Conferences and meetings are very important
to a member’s professional well being. Not only are they an education
event, they also provide a means of networking and getting reacquainted
with old friends.
This fiscal year’s major conferences are the Barcelona
International meeting (Sept. 21-24), APPEX Houston (Sept. 9-11,
2003), APPEX London (March 2-4, 2004), and the annual meeting in
Dallas (April 18-21, 2004).
A "perfect storm" for our budget occurs when we have
low attendance at our annual meetings. The convention committee
has re-organized the hosting U.S. city rotation to ensure good attendance.
The APPEX meetings are becoming the venue to show,
sell and buy prospects and properties. I will be attending all the
conferences and hope to see you there too!
• Service fees include items such as Offshore
Technology Conference income, mailing list income, services provided
to the Foundation, shipping and handling charges, income from Hedberg
conferences, short courses, petroleum schools, field seminars, training
sessions, long distance learning and distinguished lectures.
• Dues provide a small part of AAPG income.
Projected income for this year is approximately $1,800,000. Compared
to other organizations, our dues are a bargain. We may be looking
at a modest dues increase to keep pace with inflation and other
increasing expenses (e.g., mail, printing, paper, etc.).
• Advertising income waxes and wanes, depending
on the status of the economy of the oil and gas business. You may
have noticed how the numbers of pages in the EXPLORER (a number
tied directly to advertising revenue) fluctuates. The recent industry
mergers that have taken place have had an obvious negative impact
on this income item. Ninety-eight percent of the association’s advertising
income is in the EXPLORER.
• Publication sales are expected to be better
than previous years with the release of seven new publications and
two new CDs. Aggressive marketing will also greatly aid in increasing
this income category. AAPG’s geoscience director, Jack Thomas, is
always looking for new best sellers.
The expense side of the budget is just as important
as the income side. The top six expense items in order of importance
are:
- Salaries and employee benefits.
- Convention expenses.
- Professional fees.
- Postage and shipping.
- General office.
- BULLETIN expense.
Salaries and employee benefits are far and away our
largest expense item. These expenses are well worth it and we would
not be able to operate without our great team. Our executive director
has already trimmed the AAPG staff to increase efficiencies and
eliminate redundancies.
We will be reviewing the staff organization to ensure
that we are the "right size" for our products, services and member
needs. We will be implementing cost-saving measures such as eliminating
unnecessary travel, using teleconferences for meetings, etc.
Salaries and benefits also are being negatively impacted
significantly by a shortage in the pension fund (similar to other
companies). This shortage has been caused by a downturn in the stock
market over the past several years.
The budget question is among the "most frequently asked
questions" that come up within the membership. This year’s EC will
focus on developing new income producing areas along with reducing
expenses. We hope to create an improved fiscal vision for AAPG that
meets member needs. We will not be in business if we continue to
have negative income years.
AAPG members can help in balancing the budget by
strongly supporting AAPG activities. You can personally help by
attending conventions, field trips and short courses, buying publications
and advertising. Your professional society is only as strong as
your participation and support.
Part of being a professional is supporting your professional
society!