JACL Dips Into Financial Worry

February 19, 2016 • Homepage Feature, JACL, Politics

The organization meets to shore up financial plans to eliminate its current deficit and plan a healthier outlook for the next biennium.

By P.C. Staff

JACL National Board Members and staff along with local chapter leaders met Feb. 6 at the Hilton Los Angeles Airport Hotel to discuss the organization’s current financial situation and budgetary plans for the next biennium. Talks focused on how best to recover before the annual convention in July, when a new National Board will be elected to serve for a two-year term.

National President David Lin, who is nearing the end of his second term in office, told those in attendance that “our financial situation has changed not in a positive way, if I can say that. We have a lot more work to do than what we thought six months ago, and it’s really across the board.” Lin went on to explain that the organization’s lack of return on investments is due to the market’s financial volatility and its downward trend in recent months.

“We need to figure out what needs to be done sooner rather than later,” he said. “We have to turn this ship around real quick. We have to set the right tone and motto for the next National Board. That is our responsibility, and that is our obligation. We have a lot of work to do.”

Budget reductions were made across many programs. Motions were approved cutting Project Community from the Education Budget by $3,000, $3,500 away from the D.C. Leadership Conference, and eliminating $9,000 from Bridging Communities and cutting the NYSC Budget for 2016 by $10,000.

These reductions come after reduced travel costs, closing the JACL Seattle office, eliminating the October National Board meeting and keeping the fund development position vacant.

Much of the debate also focused on staff parking at JACL’s San Francisco headquarters. A motion was made to eliminate the $12,000 annual cost to keep the staff parking spaces; it was not approved by a vote of 7-6.

“The San Francisco office is our asset in perpetuity. We’re not at liberty to sell it,” said NCWNP Governor David Unruhe. “Having a building in San Francisco without parking to me does not make any sense.”

Safety has been an issue in San Francisco’s Japantown, where JACL headquarters is located. A homeless man assaulted a tenant right outside the building and later a staff member’s car was broken into. Additionally, a new gate was installed recently at the JACL building’s front entrance after squatters were occupying the doorway.

No law states that parking must be provided for employees.

“Employees say they were verbally told” that parking was provided upon employment, said Executive Director Priscilla Ouchida, “but nothing in writing.”

Staff members present were not asked about the parking during the board meeting.

Discussion regarding the organization’s overall financial outlook remained in jeopardy as National Secretary/Treasurer Matthew Farrells summarized JACL’s current state.

“Reserves have been greatly depleted in 2015,” he said. “We cannot have another year like this.”

With only $275,000 left in the reserve fund, the JACL’s “position is severe,” Farrells said. “It’s alarming.”

More than $500,000 was withdrawn to cover the deficit in 2015. Expenses performed better than revenue relative to the budget, as expenses were only over 10 percent, with revenue being under 17 percent.

Pacific Citizen was down $78,000. A reported $25,000 shortfall from the Masaoka vacancy was also taken into account. Public support fell due to a lack of unsolicited donations. Fees and registrations were also down as the National Convention brought in $38,000 last year relative to the $56,000 budgeted. It was noted that convention is part of public support.

Additionally, investments missed the budget due to “the volatile market in 2015,” Farrells reported. “That’s really been a headwind for us from a revenue perspective.”

However, concerns were raised over High Mark Capital Management Inc.’s underperformance with the organization’s investments.

Some questioned if High Mark Capital Management, a subsidiary of Union Bank, had a plan to make gains in the coming year and whether it was asking JACL to wait until the market rebounds.

“They have investment professionals,” assured Farrells, “to help determine whether they want to be overweight or underweight. There’s a lot that goes into helping to increase revenue and total return. Our endowment does have market risk. We are at the mercy of the market a lot of the time, but based on our investment policy, we have a relatively more conservative stance. They understand our organization . . . they understand we are drawing on that, and they are trying to position us accordingly.”

Added Lin: “No matter what work the investment manager is doing, we are going to see volatility. We have a long investing horizon. We’re looking to keep this organization an ongoing concern for the next 100 or 200 years. We cannot be discouraged.”

The Finance Committee is expected to meet again in April.

Discussion over the finances continued into the Pacific Citizen report, focusing on the future outlook of the paper as well as reflecting on 2015’s performance.

The 2015 Holiday Issue, despite a production delay brought on by the print/digital debate, reported an estimated $62,000 gross, an increase of nearly $5,000 over the previous year.

The P.C. is also kick-starting its 2016 Spring Campaign; this year, the paper is hoping to meet its target of $75,000, all of which is used to sustain P.C.’s daily operations.

Business Manager Susan Yokoyama raised several concerns regarding the 2016-17 budgeted numbers for the paper. P.C. entered 2016 with a $78,000 budget shortfall. In 2015, revenue expectations were at an all-time high of $300,000; the amount budgeted for 2016 is $313,000, with expected membership dues allocated to the P.C. by National amounting to an estimated $73,500.

“We have cut our expenses across the board,” Yokoyama explained. “From 2010 to 2015, expenses went down by 52%.” In 2010, expenses were at an all-time high of $517,000; as of September 2015, expenses were $250,000.

Some have argued that the cuts made were expected since the P.C. had more income in 2010. However, the 52 percent drop from moving offices, eliminating leases, cutting page numbers per issue and dropping a reporter over the years were large portions of the P.C.’s operations.

Yokoyama also presented the responses given to the P.C. from JACL members regarding the move to an all-digital P.C. following the October 2015 Digital Plan voted on by the National Board.

Many shared that they had been longtime JACL members, active during the redress movement or were incarcerated during World War II and were saddened to hear that the printed edition would end. Many indicated that they would not renew their JACL membership should the paper cease to print hard copies.

“These are our readers and JACL members — they are the market,” Yokoyama clarified. “The P.C. lives within an interesting market where the printed paper is a product for the JACL membership market.”

JACL members and P.C. nonmember subscribers will soon receive a postcard asking them to indicate their preferred method of receiving the P.C, either via mailed hard copy or PDF digital format. Savings to print and mailing costs are expected to help reduce the increasing deficit.

The P.C. is faced with a daunting financial future of how to shore up the rising deficit. Efforts are being made to increase advertising revenue and gain new advertising partnerships, raise continued support for its Spring Campaign, work with JACL membership to increase numbers and generate year-round business with JACL chapters to place ads that will guarantee chapter commissions.

“We’re doing everything we can to create a path for revenue,” said Yokoyama. “Moving forward, the P.C. wants to be a player in driving membership numbers up, which means we’ll have more readers. As a program of JACL, it’s in our best interest to be there for the members as they have always been here for us.”

Newly appointed Youth Chair Kenji Kuramitsu rose concerns over the reduced funds to the NYSC program as it “would make a big impact and would severely inhibit activities.”

Many board members present were introduced to JACL through the youth program as PSW Governor Michelle Yamashiro noted.

“Understanding all the cuts that need be made is necessary, of course,” Yamashiro noted. Now in her first quarter as governor, the past Youth Chair urged the board “to focus on creating revenue. The NYSC is working and doing good work, generating leaders.”

This comes as JACL struggles to increase membership as the numbers continue to dip lower.

VP of Membership Toshi Abe reported 8,318 memberships, a 5 percent drop over the year.

“Although, it’s disappointing to see our number dropping each year,” wrote Abe in the report, “we hope to be able to halt our sliding numbers in 2016. I call on our governors to work with their chapters this coming month to encourage their chapter membership chairs to try to make a personal contact with their lapsed member.”

Abe also made a suggestion to have a workshop at the upcoming National Convention that would be dedicated to recruiting membership. Past conventions have hosted workshops on how to best recruit and retain memberships.

Over the past several months JACL has made strides in efforts overseas, receiving a commendation award from the Ministry of Foreign Affairs of Japan by Ambassador Kenichiro Sasae.

The Kakehashi Project also sent more than 200 youths to Japan this year — three groups in December and two groups in January. Program objectives aim to understand international U.S.-Japan relations, facilitating cross-cultural dialogues.

Said Kakehashi Project Co-Chair Larry Oda in a statement, “The foreign ministry, by allowing us to sponsor this program, has really given the JACL an opportunity to have a program that college students from al over the country can benefit from.”

Looking ahead to 2016, Ouchida confirmed several corporate donations, including funds from AARP, the Coulter Foundation, AT&T and Comcast. Historically, CBS, Ford, Japanese American Health, ABC, Southwest, Verizon and UPS have also pledged support to the organization.

VP of Operations Miko Sawamura announced that the 2017 Convention dates in Washington, D.C., would be July 5-8 and would be held at the Omni Shoreham Hotel.

Sawamura went on to share that this year’s registration fees will be $250, up $100 from the previous amount of $150 in 2015. The change comes after members shared that more food was desired at last year’s convention. Adding $100 to the registration fees will now include a dinner and two meals, bringing back the Youth Luncheon and a banquet similar to the 2014 San Jose Convention programming.

In regards to youth, board members discussed if $25 would be given to the National Youth Student Council from each registration fee. However, there is discussion if perhaps a discounted student registration fee will be available. Options over how pricing levels and registration fee allocations will work this year are still underway.

Governors and chapter presidents are encouraged to receive feedback from the membership over registration fee prices.

Convention this year hopes to include more panel discussions, including one involving the Pacific Citizen.

In closing, Lin was hopeful. “I think we accomplished something, but we still have a lot more work to do,” he said. “Let’s keep working at it, and I think we made a good start. It takes time, energy and creative thinking. We will get there.”

The National Board is set to meet again April 2 at its San Francisco Headquarters. It will be the final board meeting before the National Convention in Las Vegas, set for July 10-14.

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