[TheForge] Re: The ABANA Trust

Sun Oct 28 14:01:33 EST 2007

I can't disagree....the bottom line is that elected board members of 501c3
corporations have a duty that is first and foremost, fiduciary.  There is a
positive duty of each and every elected board member to practice sound
financial governance based on business principles.

Providing "world class events" in the form of conferences is a collateral
duty, provided a business case can be made for it.

The financial difficulties associated with the Seattle conference are not a
problem....they are a SYMPTOM of a problem.  In this case the real problem
was perhaps one of failure of the oversight of the ENTIRE ABANA board to
govern the conference organization process according to sound business
practice.

I have the utmost respect for anyone who is willing to be a volunteer on a
501c3 board; it is a HELL of a lot of work and very demanding when correctly
performed.  Correct performance of the duties of a board member once again
centers on due diligence regarding finances.

  Ultimately, ABANA will survive only if there are enough folks on the board
who employ sound management AND leadership principles.  Let's get back to
the basics...solid money management, transparency and accountability to the
membership.

I for one, am sticking with ABANA in the hope that wiser heads will
ultimately prevail. I'm dancing with the one I came to the ball with.

Grant

-----Original Message-----
From: theforge-bounces at mailman.qth.net
[mailto:theforge-bounces at mailman.qth.net]On Behalf Of xlch58 at swbell.net
Sent: Sunday, October 28, 2007 8:24 AM
To: Sponsored by ABANA
Subject: Re: [TheForge] Re: The ABANA Trust

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
>
>
>> ï»¿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 itâ€™s accumulated earnings, from itâ€™s conferences, dues,
sales,
>> etc. to stabilize itâ€™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
>> ABANAâ€™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 itâ€™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 ABANAâ€™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 itâ€™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
>> Boardâ€™s decision,
>> Tim Ryan and I warned ABANA of the long-term consequences of burying all
of
>> itâ€™s operating
>> funds in the backyard. Tim said, â€œYou might need those for a rainy
day!â€?
>> 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 ABANAâ€™s liquidity. While
>> providing some
>> meager scholarships for the few, it has destroyed itâ€™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
>> itâ€™s life blood!
>>
>>
>>
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