[TheForge] Re: The ABANA Trust

[williamsiron at comcast.net]

Something to keep in perspective, the writer of this message, Jerry Kagele, was the chair of the ABANA conference in Seattle that did not bring in the kind of money that most thought it should. We don't know the exact numbers because the financial report has not been posted on the ABANA web site. I'd say to keep an open mind on this writer. Oh, yes, Mr. Kagele is a lawyer.

Mark
Snow Hill, Maryland

-------------- Original message -------------- 
From: 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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