[TheForge] Re: The ABANA Trust

[Kagele at aol.com]

ABANA conferences have always depended upon conference revenues for a  
portion of the
operating budget as well as seed money for new  conferences.  It has been a 
given that inland
conferences generate more  money, because of ABANA membership concentrations, 
than West
Coast  conferences.  It is also a pattern that off-conference years generate 
less  revenue.  The
reason that ABANA did not proceed with a conference in  2008 is due to a 
number of factors in
addition to economics i.e. lack of a  time-dedicated conference chair, high 
site costs, etc. 
However, the specific  financial problem that ABANA has was present before 
the  Seattle
Conference.  A conference is a high-risk venture  financially.  Bad weather, 
gas prices, terrorist
attack, you name it,  could cause a cancellation.  The primary goal 
financially is to balance  the
conference budget.  The second goal is to provide a conference fee  that is 
within the financial
means of most members.  If the conference  can do that and still generate a 
profit for ABANA, so
much the better.   However, no conference has ever been intended to provide 
the primary  and
exclusive funding for ABANA in off-conference years.  Like any  business, 
ABANA has always
relied on it’s accumulated earnings, from it’s  conferences, dues, sales, 
etc. to stabilize it’s
finances from one year to  the next.  In non-conference years membership dues 
income dips.   In
conference years dues income and conference revenues have always added to  
ABANA’s
accumulated earnings.   Without the cushion of accumulated  earnings, ABANA, 
like any
business, will have a cash-flow crunch in the lean  years.  That is precisely 
where ABANA
finances are today.  The  reason?  Several years ago ABANA had more than 
$150,000 in
accumulated  earnings.  All of this money was locked up in the ABANA Trust.  
It  remains there
today.  It is essentially dead money.  Other than  providing a few thousand 
dollars in scholarships,
it has no further utility  to ABANA.  Given it’s paltry rate of return, 
inflationary  decrease,
administration fees, and decline in dollar value, it is actually  losing 
significant principal each
year.  Most importantly, it totally  eliminated ABANA’s effective cash 
reserves which had always
been available in  non-conference years and which traditionally provided a 
cushion for  operations
and conference planning.  Without access to it’s accumulated  earnings, 
ABANA, like any
business, has to start from scratch to rebuild  operating capital.    Having 
done estate planning for
some 35  years, I am not unfamilar with trust economics. At the time of the 
Board’s  decision,
Tim Ryan and I warned ABANA of the long-term consequences of  burying all of 
it’s operating
funds in the backyard.  Tim said, “You  might need those for a rainy day!”  
It was inevitable,
given the past  pattern of ABANA finances, that the decision would eventually 
catch up to  the
organization.  The ABANA Trust has destroyed ABANA’s  liquidity.  While 
providing some
meager scholarships for the few, it has  destroyed it’s ability to 
effectively carry out its
educational mission for  the many. The problem is not that ABANA has not been 
financially
successful.  The problem is that it decided to permanently deprive itself of 
it’s life blood! 



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