Leaders say a dues increase is necessary after seven years without one
Posted Dec. 1, 2009
The AVMA House of Delegates is set to consider a resolution to increase member dues in 2011 so that the Association can continue to provide services, address professional issues, and remain financially sound.
The Executive Board and House Advisory Committee are co-sponsoring the resolution that would increase annual dues by $50 for regular members to $300 beginning in 2011. Associate and affiliate members would pay the same as regular members. Retirees, educational members, and recent graduates would pay half as much. The House of Delegates will vote on the resolution Jan. 9, 2010, at its regular winter session.
The AVMA last increased dues effective in 2002 and 2004, by $25 each time for regular members. Dues would have equaled $307.50 in 2011 if the Association had instituted a 3 percent annual cost-of-living adjustment over the seven years from 2004-2011.
As of Oct. 31, the Association was projecting a deficit of $1.8 million for 2009, following a $7 million deficit in 2008—largely due to the effects of the economic downturn on investment earnings and journal advertising. The AVMA has drawn down its reserves to make up the difference between income and expenses. The board, treasurer, and staff found ways to cut costs substantially to balance the $28.6 million budget for 2010.
Dr. John R. Scamahorn, Executive Board chair, said the Association must increase dues at some point. "We've got to continue to move forward with the services to the members. We need to address the strategic goals in animal welfare, workforce development, economic viability, advocacy, and veterinary education."
Why is the AVMA increasing dues in such a tough economy?
The board had postponed proposing a dues increase to avoid imposing another strain on members who have struggled during the economic downturn, Dr. Scamahorn said.
"This dues request would not be until a year from now, for the 2011 budget, so the expectation is that we will see improvement in the economy, and therefore it will not be the burden that it might have been if we were asking for it now," said Dr. Bret D. Marsh, AVMA treasurer.
Dr. Barbara A. Schmidt, chair of the House Advisory Committee, said the Association needs to increase member dues after seven years, just as veterinarians must increase fees over time.
The tough economy has forced the Association to be even more efficient and effective with existing resources, said Dr. W. Ron DeHaven, AVMA chief executive officer. Nevertheless, he said, the AVMA is reaching the point where it can't do more with less.
How does the AVMA spend member dollars?
The Association spends income from member dues and other revenue sources on its core-competency programs and efforts to achieve the AVMA's strategic goals.
Among the AVMA's core-competency programs are the scientific journals and annual convention, which generate substantial nondues income to offset expenses. Member dollars help pay for most Association programs. Dues income helps pay for programs that advocate for the interests of veterinarians to the public and government, for example, and programs that support veterinary students and accredit veterinary colleges.
Dues income also allows the Association to pursue its strategic goals to address issues relevant to the profession's workforce and economic viability and to advance AVMA leadership nationally and internationally in advocacy for the profession, animal welfare, and veterinary education.
Dr. Schmidt said, "The dues increase that we're talking about is a very good deal for the value—the quality and quantity of services that the AVMA offers."
Why not increase member dues by less than $50?
A $50 dues increase in 2011 would realign the AVMA budget with the costs of doing business, according to the statement accompanying the resolution to increase dues. The Associations projects that the dues increase would generate $3.5 million in additional income for 2011.
"We can't maintain the budget we have right now because our costs do go up—just like everybody else's costs," Dr. Scamahorn said.
The AVMA's income increased enough from 2004-2007 to outpace increases in expenses. Investment earnings decreased sharply in 2008, however. The Association also is projecting advertising revenues for 2009 to be half the original estimate.
Dr. Marsh said income from investments and advertising might not recover for some time. A $50 dues increase would help stabilize the AVMA's income, he said.
Why doesn't the AVMA just cut the budget further?
The board continues to seek ways to improve the return on member dollars, Dr. Marsh said, but does not want to compromise member services.
The AVMA projects that cost-cutting measures will result in expenses being less for 2009 and 2010 than for 2008—$28.4 million for 2009 and $28.6 million for 2010 in comparison with $29 million for 2008.
The Association reduced spending across many areas to balance the 2010 budget, with some cuts taking effect in mid-2009. The board approved printing the AVMA journals on lighter stock, for example, to save money on paper and postage. The board also reduced travel for leaders and staff, dictating that the Association hold more electronic meetings.
"I feel strongly that, without this dues increase, more significant cuts will need to be made that could affect the quality of the programs that we offer to our membership," Dr. Schmidt said.
Why doesn't the AVMA just draw down the reserves further?
Dr. Marsh said the Association would have been in a tight spot during the current economic downturn without the reserves. The AVMA is turning to members for more dues income partly so the Association can stop depleting the reserves and start preparing for the next rainy day, he said.
The AVMA reserves, as of Oct. 31, were at 67 percent of the Association's operating budget. The AVMA policy is to maintain reserves of 50 percent to 150 percent of the operating budget.
The reserves allow the AVMA not only to weather tough economic times but also to complete major projects, such as recent renovations of the headquarters building.
"For the major initiatives that we undertake under our strategic goals, the funding comes from reserves," Dr. DeHaven added. "And the impact of the economic downturn has been on our reserves."
Why doesn't the AVMA find revenue sources other than dues?
The AVMA is always looking for revenue streams to supplement member dues, but income sources such as investments and advertising are not consistently reliable.
"Over 40 percent of our revenue comes from sources other than dues, and that's been part of our challenge," Dr. Marsh said. "With that much coming from other sources, when the economy overall is down, it makes things extremely difficult."
Dr. DeHaven noted that the Association's membership numbers and therefore its dues income remain strong. In fact, membership and dues income have been growing slightly even during the economic downturn.
To increase nondues income, the AVMA recently created the position of director of corporate relations to seek more sponsorships and develop other revenue streams. Recent improvements to the AVMA's online continuing education program also might result in more nondues income for the Association.
Why has the AVMA hired so many staff members recently?
In terms of overall staffing, the AVMA has been hiring mostly to fill mission-critical positions when someone retires or relocates.
"With all of the new faces that we have highlighted in JAVMA over recent months, I can certainly understand why it would give the impression that we are hiring large numbers of people," Dr. DeHaven said. "Only two of them are in new positions—our director of corporate relations and our in-house general counsel."
Dr. DeHaven believes both new positions will pay for themselves. Staff salaries and benefits are the AVMA's largest expense, as for many organizations.
Can members comment on the proposal to increase dues?
The House of Delegates will consider the proposal to increase dues along with another four resolutions and three bylaws amendments. See page 1381
for information about the other proposals and whom to contact with comments about the resolutions and bylaws amendments.
- January-February 2009: AVMA treasurer and staff develop a draft budget for 2010, cutting costs to balance the budget without a dues increase.
- March 2009: AVMA Budget and Financial Review Committee reviews the 2010 budget.
- April 2009: AVMA Executive Board approves the 2010 budget.
- July 2009: AVMA House of Delegates receives the 2010 budget.
- Oct. 2, 2009: Executive Board recommends proposing a resolution to the House of Delegates to increase dues in 2011.
- Oct. 18, 2009: House Advisory Committee supports the recommendation.
- Nov. 3, 2009: Executive Board proposes a resolution to increase dues.
- Nov. 6, 2009: House Advisory Committee co-sponsors the resolution.
- Jan. 9, 2010: House of Delegates will vote on the resolution.
- January 2011: Dues increase would go into effect.