[TheForge] Re: The ABANA Trust

[xlch58 at swbell.net]

This is from a note posted by the president of ABANA after the conference:

"For many years ABANA has supplemented its budget by living off the profit from previous Conferences. We can no longer do that.
The Seattle Conference was not the financial success of previous Conferences. It probably lost money. We still do not know the final tally,
because there is an outstanding invoice from the University of Washington. When we do know the accounting figures, they will be posted on the ABANA website."

As far as I know, ABANA has yet to post the actual results.   It seems clear to many of us that have been involved with ABANA for some time that the conferences have provided supplemental income that was an important component of ABANA's budget.  No one has claimed that the conferences have provided "exclusive funding for ABANA in off-conference years"  This is a silly argument, since ABANA has always collected dues, and charged for plans and whatnot- I doubt anyone really believed ABANA was exclusively funded by conferences in on or off years.  This bit of sophistry is misleading.  Yes, the goal is to not lose money.  That is also the goal of every working smith, but they don't do it by heading out to the shop every day intent on not losing money, , they know they can accomplish that by making money.   The consensus is that Seattle did not provide the ROI of past conferences.  High risk or otherwise, it did not face any untoward challenge not faced by every other conference i.e. no weather or terrorist attacks. In fact, if any conference wants to claim harm in that respect, it would be Richmond.  The only issue that I have heard it faced was bad decisions.  I say that without acrimony, just the facts at a macro level.  In the absence of any outside influence having a detrimental effect on the conference, it leaves the planning and execution as the issue.  Decisions were made that did not result in the expectations of the general ABANA membership being met.   The results may or may not have met the expectations of the planning group, or the ABANA board, but they did not meet the expectations of the general population, as we all expected the same sort of profit as previous years and we expected another conference in 2008.   Without the official numbers being published it is hard say what the facts are, but saying it met expectations is silly, unless you specify whose expectations.   As far as the lawyer thing, who cares.   It is silly and stupid to bash someone for being a lawyer.  If you want to bash them for being a bully and an asshole, have at. 

Charles


williamsiron at comcast.net wrote:
> 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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