Preston and other interested parties:
Again, I will try to address those things that fall within my bailiwick, and
chime in where I have some knowledge or opinion.
Sounds like we lost money for every new member who joined.
Looks like we were losing money on every back issue sold. If mailing
costs and storage costs were included we would be losing even more.
Financially we would have been better off without extra copies.
You are MOSTLY correct! Not every new member that joined chose to purchase
past issues of the Journal, therefore, only to the extent their membership
year's Journal cost more than their membership did the club "lose" money.
Granted this still resulted in costs greater than new members paid. I put
the term "lose" in quotes as it is partially a misnomer. Since the club had
paid for the printing the club did not lose money in the sense they had to
borrow to cover the costs, but rather that the additional costs were covered
by other revenues so designated by the Board.
Various PRIOR Board of Directors chose to publish additional copies of the
Journal to hold them, in reserve, for future members, and future local
societies that wished to establish a club library.
It is not unusual for hobby organizations to publish more for members than
the membership fee alone allows. Preston, I believe that you are still a
member of the Potomac Hosta Club. PHC publishes $10 worth of material per
member and charges a membership fee well below that amount. The additional
revenues come from club auctions and sales.
When Alex first formed the American Hosta Society he once told me he had to
come up with an idea to cover some of the costs of the first edition of The
Bulletin as membership dues were not going to cover all the costs and they
developed a seed sale to help generate more revenue. So I hope you see that
educational/hobby organizations often perform a balancing act in order to
provide what the membership appears to want.
There is nothing wrong with being a conservative budgeter. BUT I thought
a budget would try to more closely quesstimate what the actual revenues and
expenses will be (especially when half the year had passed and alot of the
numbers were known). I glad that, (as stated in the summary of the BOD
meeting),"In the future, the budget for the upcoming year will be addressed
at Fall meeting to eliminate the need to operate for 6 months without a
As of the June Board meeting Jim had only obtained approximately $2700 in ad
revenue, so at that time the $5000 didn't look that much too low. Further,
in my training before law school (not that it matters that much but, I have
a graduate degree in Public Administration from Syracuse's Maxwell School,
as well as a Law degree. Further, like Mr. Hawes, held job classification
category 301, budget analyst, policy analyst and program analyst positions
at the Department of Energy and for Congress, all before I became a managing
attorney.) I learned and had the opportunity to apply all the catch word
budget methods ("MBO" = Management by Objectives, "ZBB" = zero-based
budgeting, "CEA" = Cost-Effectiveness Analysis, and other hybrids of these).
In all of this training we were constantly warned that estimating beyond the
baseline plus inflation was sure to get us in trouble when estimating
revenues. The rule of thumb, and one put into practice by a budget analyst
from whom I learned (and I am sure that Mr. Hawes knows from his days in
government, Bernard Jump, Director of the Department of Agriculture's budget
for over 30 years) is that you should under-estimate revenues and
over-estimate costs, and then if you present a balanced budget, the
taxpayer, or the "share-holder" should never complain. While at Maxwell I
also took classes at the Business School and Benjamin Wasserman also
proclaimed this "old-saw" of budgeting as a guiding light for business and
Of the present membership of 3800 (your figure) I count 382 Life members
who would not chip in this extra $6. $6 X 382 members = $2292 less. I also
believe that we would lose members (I would guess at least 10%) if the fee
I'm not against raising the dues--let's use that $20,000 or so increase
along with the $24,500 budgeted for the Yearbook and Directory and publish a
The last time the dues were raised, in 1992-3, from $15 to $19, (and life
memberships were raised from $150 to $300) membership did not retract, and
in fact continued to go up at the same rate.
Further, I am glad you raised this point for another reason. You are
correct, to a degree. I think your point is that the members who hold life
memberships do not kick in an additional $6 per year thus they are getting a
free ride -- or are they? The Board, I believe it was under Bob Olson, at
the suggestion of Glen Draper, had the foresight to set aside enough money in
reserves to cover the total value of a life member's payment (this is listed
in the budget on the liability side, as it should be). Some of these
memberships go back to
the $150 days and many more at the $300 amount. The revenues, (read that
interest), earned on these reserves go to cover the annual costs of these
memberships and have generally tracked those costs closely. I have asked
accountants who work for and with, me what they think of this and they think
that it is prudent and more organizations should follow such practices.
You seem to be making a connection between the cost of the Journal and
membership fees. Don't forget about a fast and growing expense for the
Yearbook and Directory that needs to be paid for. Where is this money
supposed to come from? Does this mean the cost of the Yearbook and
Directory are now being covered by the auction income?
I agree that, that money must come from somewhere, and important revenues do
come from the auction. The points I am trying to cover are that 1) Most
members feel the Journal is the number one reason they join the society,
and, we have, only recently, disengaged the Journal/Membership linkage that
drove AHS decisionmaking for many of its 30 years of existence, particularly
the last 20 years; and, 2) We are a membership service organization and we
are now looking at ways to provide more to the membership from those
revenues we do have -- trying to weigh many considerations. And, yes, PAST
Boards initiated theYearbook and Directory, which many love and many hate,
and then there are general operating expenses.
Are you saying we did not need to use savings to bail us out until this
Is the $20,000 from savings to pay bills in general or the amount needed
to pay the "catch up" costs?
Where are these "catch up" costs included in the 1999 Budget Expense
It is my understanding that these additional "savings" were placed in a CD
and not until it was necessary was that money transferred from savings to
revenue as noted in the documents you referenced. The general fund is
"fungible". This is a common flexibility that allows organizations of this
type to operate without having to have full-time money managers running the
1. Please explain the 1999 Budget Expense items of $700 for President, $75
Vice-President, $10,000 Membership Secretary Support, and $2500 Contingency.
I am only capable of responding to one of these items as I seconded and
supported Robin Duback's motion in 1997 at the Indianapolis Convention.
When the size of the membership reached approximately 2000, the data entry
time alone for processing memberships translated into 350 hours. The other
duties, opening mail, doing mailings, preparing lists, etc., took another
200 hours. The membership was (and has) doubling, even when taking into
account economies of scale, the numbers were approaching 1000 person hours,
or 1/2 work year (For accounting purposes a work-year is considered by most
businesses to be 2000 work hours -- 52 weeks X 40 hours = 2080 - leave
time). Thus, the membership secretary position requires 20 hours per week.
Granted it comes in "spurts" and thus, at certain times is substantially
The $10,000 for Membership Secretary Support is budgeted to provide for
someone to assist the Membership Secretary with data entry. (The original
motion was for UP TO $1.50 per member for data entry) The remainder is for
other office expenses of the membership secretary, and envelopes, letters,
and postage.) This does not go to Cindy Nance, but rather to a non-AHS
member whom she is authorized to employ.
It should be noted that no member of the American Hosta Society is paid for
any services they render to the society under the positions they hold.
2. Misc. Publications has almost doubled from $5318 in 1998 to $10,000 in
1999 budget. Is this due to the Silverbook addendum and "Let's Grow Hostas"?
Kevin's response: The answer to this is yes! However, future years budgets
would show an offsetting revenue as these items were sold. Remember we have
to pay the printer before we can earn the income.
3. Dept. Office Expenses have risen from $4195 (1996) to $8543 (1997) to
$12,959 (1998). What expenses does this item comprise? There is no entry for
this item in the 1999 Budget.
I will leave this question to those who have the books.
4. The budget just seems too vague. Is there some way that someone who wants
to know more can find out easily?
I believe that Don Hawke is working on a "plain-English" version. You may
wish to talk to Jim and Don about this.
1. Publish a third Journal. A third journal will give us a greater presence
in the bookstores and also give the membership 50% more of what they joined
the AHS for in the first place---that being info about hostas.
2. Change The Directory and Yearbook to "sold" publications like the present
Silverbook. This would make them self-supporting along with keeping the info
available to those that want it.
3. A proposal concerning the Silverbook will follow in another post.
Thank you for your input on these proposals!
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