NEW YORK (March 1, 2011) —
The Public Relations Society of America
(PRSA) Board of Directors
has engaged a Business Model Task Force to evaluate the Society’s 2011 financial forecast and budget and make recommendations for ways to maintain the Society’s financial health in future years.
PRSA expects its 2010 audited financial results, which will be announced in April following the board of directors approval, will show that the Society met or exceeded its annual financial goal of returning 1 percent of budgeted expenses to its financial reserves.
PRSA’s 2011 budget, however, anticipates that the Society will be unable to afford the 1-percent contribution to financial reserves.
The American Society of Association Executives
' (ASAE) financial best practices suggest, among other things, that nonprofit organizations, such as PRSA, maintain 50 percent of their annual expenditures in a reserve fund.
“The process of engaging a Business Model Task Force is much like the process many Americans have gone through as the recession has impacted their income and spending,” said Rosanna Fiske, APR, PRSA’s 2011 chair and CEO. “We’re going to sit down at the proverbial kitchen table, assess our financial condition and determine how to move forward in the most prudent and financially responsible way.”
PRSA has not increased the cost of its membership dues in 10 years, even as business costs have risen, member benefits have increased by more than one-third and companies of all kinds have cut back on association memberships and professional development for their employees as ways of coping with the recession.
Despite these financial pressures, the Society consistently has been able to meet its financial goals by aggressively controlling its costs. In just the past two years, for example, PRSA has eliminated $1.5 million in operating expenses by implementing staff cuts, salary reductions and salary freezes; changing vendors and rebidding existing contracts; pursuing new technological efficiencies; eliminating underperforming products and services; reducing board travel; and slashing sales and marketing expenditures.
PRSA also has tried aggressively over the past decade to diversify its nonmember revenue sources. This effort has included the appointment of a Non-Dues Revenue Task Force to identify alternate means of generating income. That task force concluded in 2009 that PRSA was not missing any practical opportunities to generate nonmember revenue.
Fiske says that future expense reductions will be difficult without cutting member benefits or tapping PRSA’s reserve funds.
“We have a number of exciting projects in the pipeline, from creating a mobile version of the PRSA website to developing more programming focused on senior professionals,” she said. “Having thoroughly exhausted opportunities to cut costs and generate new sources of revenue, we need to identify new ways to balance future budgets without impacting member value.”
PRSA’s Business Model Task Force will be led by board Treasurer Philip Tate, APR, and staff CFO Phil Bonaventura. The other members of the task force are Mary Barber, APR, Fellow PRSA, chair-elect of PRSA’s College of Fellows and former PRSA board secretary; Felicia Blow, APR, former chair of the Universal Accreditation Board and current member of PRSA’s Audit Committee; Anthony D’Angelo, APR, Fellow PRSA, secretary-treasurer of PRSA’s College of Fellows and former board Treasurer; J.R. Hipple, chair of the Counselors Academy; Dave Imre, APR, former PRSA board member and chair of PRSA’s Non-Dues Revenue Task Force; and Paula Pedene, APR, co-chair of PRSA’s Section Council.
About the Public Relations Society of America (PRSA)
With more than 31,000 members, PRSA
is the largest organization of public relations professionals and students. PRSA is comprised of 112 local Chapters
organized into 10 geographic Districts
; 12 Professional Interest Sections
that focus on issues, trends and research relevant to specialized practice areas, such as technology, health care, financial communications, entertainment and sports, and travel tourism; and the Public Relations Student Society of America
(PRSSA), which has 317 Chapters
at colleges and universities in the United States and abroad. PRSA is headquartered in New York.