By Alan Nishi, secretary/treasurer
It has been a while since my last financial report to the membership at July’s National Convention in Washington, D.C., and I would like to follow-up with an update on our organization’s financial status.
As announced at the last National Convention, the P.C. bookkeeping function is slated to be handled by the National Headquarters staff. JACL Business Manager Matt Walters met with the P.C. staff in Los Angeles in September to access P.C.’s bookkeeping process; he is formulating a financial integration plan for implementation this year.
National JACL’s reserve fund exclusive of any excess 2017 unrestricted operating funds as of Sept. 30, 2017, stands at approximately $330,000, which equates to 16 percent of our 2017 operating budget. My goal continues to be to grow and maintain the reserve fund to at least 20 percent during my term as secretary/treasurer.
YTD — November 2017 Budget (unaudited) Highlights:
- Revenues for the first 11 months of Fiscal Year 2017 totaled $2.181 million, which was $553,000 ahead of the YTD budget.
- Public Support, which includes general donations and bequeaths, was $521,000 ahead of budget. This was due to the receipt of approximately $517,000 in unanticipated and unbudgeted bequeaths and a general donation of $100,000 in unrestricted revenue.
- Investment revenue was $211,000 ahead of budget, which is largely attributable to the markets being at or near historic highs over the past year. It should be noted that revenues include realized and unrealized capital gains, which is subject to market fluctuations.
- Fundraising revenue was behind budget by $93,000.
- P.C. revenue was $72,000 behind budget. As I discussed at the last convention, this can be attributed to the past budgets being overly optimistic with P.C. fundraising revenues.
- Membership revenue was approximately $10,000 behind the YTD November budget estimate.
- Expenses for the first eleven months of Fiscal Year 2017 totaled $1.755 million, which was under the YTD budget estimate by approximately $4,000. There were two major expense variances to budget, which offset each other.
- Personnel expense was under budget by approximately $68,000 due to staffing vacancies during 2017.
- Meeting and conferences was over budget by $47,000 due primarily to convention costs, which significantly exceeded budget.
- Other significant expense items of note — YTD travel expenses was over budget by $32,000 primarily due to the Youth Legacy Program, which was funded by a grant which offset this expense overage.
- YTD Nov. 30, 2017, net revenue over expenditures was $425,000, which was approximately $557,000 ahead of YTD-November budget estimates.
- I plan on writing a follow-up column after the year-end December budget numbers are completed following the upcoming National Board meeting in February.
Although we are well ahead of budget as of Nov. 30, 2017, there are several budgetary issues of concern as we begin the new fiscal year.
- Despite investment revenues being well ahead of budget, any significant market decline or correction could erase market gains to date, putting us behind budget.
- As I had reported during my Treasurer’s Report at the Washington, D.C., Convention, the National Convention budgets were and continues to be a concern. At this past October National Board meeting, I reported that the final financial report for this year’s National Convention reflected a net convention loss of approximately $25,000, including allocated staff costs, which will have an adverse impact on the budget as the convention was originally budgeted for a $31,000 net profit.
- Fundraising revenue continues to fall behind budget, and we will need a strong December to generate an additional $202,000 to meet our fundraising budget at year’s end.
- As I had reported in detail at convention and past National Board meetings, P.C. fundraising revenue is projected to fall well short of budget by as much as $100,000+ attributed to an overly optimistic biennial P.C. fundraising budget, which will also have an adverse budgetary impact in 2018.
- When netting out unanticipated unbudgeted revenues for public support and for unbudgeted investment earnings totaling $734,000 as of Nov. 30, 2017, these are nonrecurring and nonsustainable sources of revenues, there would have been a budget deficit of approximately $177,000 as of Nov. 30. The point of this concern is that JACL continues to be unable to meet its budget with recurring sources of revenue and if not for the generosity of individuals in our organization, JACL would still be in a deficit budget position. The bottom line is that despite JACL ending the year with a budget surplus, which was built on nonrecurring revenue, our organization continues to be in a precarious financial position, which necessitates continued tight fiscal restraint as well as the generation of recurring revenues to maintain a stable financial position in 2018.