Annual Report

2007 Treasurer’s Report

Statement of Financial Position

AIHA’s Financial Picture Is Looking Good

By David M. Gioiello, CIH, CSP
AIHA Treasurer

Highlights of 2007

Along with everyone else, AIHA is feeling the effects of the tightening economy. Even so, this past year AIHA continued to enjoy an outstanding financial position—thanks in no small part to the hard work and efforts of AIHA staff, members, and volunteers. We finished 2007 with a net income in excess of expenditures of about $31,000, just $14,000 shy of our budgeted $45,000. Our investments did very well, adding almost $703,000 in investment income. AIHA’s continued disciplined management has kept the overhead portion of operating costs at a low 21 percent, allowing us to focus more funding on providing expanded member benefits and creating new products and services. Lab programs and meetings and education continue to be our mainstay programs, providing more than 70 percent of our total revenue, while member fees comprise 12 percent.

AIHA’s Products and Services – Still Strong

At mid-year 2008, we are feeling the same economic impact as everyone else—basic and production costs continuing to rise (postage, paper, gas, airfare, all oil-related products)—so we are seeing a correlating increase in our operating expenses. We are working hard to ensure that we provide the same level of service without passing on these increasing costs unnecessarily. We are continuously looking for new revenue sources to support our ongoing expansion of member programs. A good example is the lab program. They are working on international accreditation that should result in our being able to expand our market and keep it as competitive as possible.

Prudent Budgeting in an Uncertain Economy

For this year’s budget, the board decided that it would be prudent for AIHA to plan for a larger net operating income than in 2007 to provide a cushion against potential economic downturn. The board reduced proposed spending by about $200,000. Every effort was made to avoid impacting committees and working groups, with the cuts coming from board and staff travel, marketing, and postponement of hiring staff. These are short-term solutions to a potentially long-term problem—rising costs that require offsetting new revenue sources, which we are continuously looking to develop.

Reserves Will Get Us Through …

One area that helps us each year is our strong reserve position. We have a board-established policy that we must maintain at least 50 percent of our operating budget in reserve to ensure our continued financial viability in the event of an emergency or significant unplanned event that would adversely affect our revenue, expenses or both (for 2008, we need to maintain $7.6 million). The board also established a policy whereby we could tap into reserves above the 50 percent level and use for projects that would result in a new product or service of value to the membership, enhance the IH profession or the association, or allow us to develop key AIHA capability or infrastructure for the future. For 2008, the board approved spending $960,000 from reserves for programs such as value of the profession study, international recognition for the lab program, strategic and business development plan for the lab program, AIHA website redesign, OEHS Central Library, futurist vision for AIHA, student and early career programs, recruiting, and Future Leaders Summit. 

Going Forward

If all goes as planned, we should end the year with a net operating income of more than $105,000. This will depend heavily on a strong conference and strong laboratory participation. We do know at this point whether laboratory renewals are slightly below what we anticipated, with mergers and reduced participation due to economic downturn. Fortunately, reduced participation also lowers lab expenses, almost completely offsetting the lost revenue. As for conference, attendance and exhibitor participation were slightly down from last year, again related to the current economy. Depending on final conference results, we may need to tighten our belts a bit through the rest of 2008. If we have a stronger conference, we’ll continue with programs as planned and possibly fund some additional projects that have surfaced during the year.

Finally, I want to thank everyone who helped me for the past two years.  It has been a wonderful experience. I leave your money in good hands. I have the utmost confidence in Alan Fleeger, your new treasurer, in the members of the Finance Committee, and in Diane Young, our director of finance.