Balancing the budget requires trade-offs
By Lilianne R. Mujica-Parodi (OHBM Treasurer 2019-20)
At OHBM 2019, Council decided that it would be beneficial to the membership to provide a window into the decision-making process regarding finances. If you’ve ever wondered why our support for Special Interest Groups (the SIGs) changes from year to year, or how we decide on the location, venue, and registration costs for a meeting—we hope to demystify some of the many thought processes that go into how Council makes its financial decisions and prioritizes requests for funding.
Responsible financial stewardship of OHBM has always been a priority of the Society. This includes the maintenance of adequate financial reserves that are needed for a society to function. For OHBM, this requires that our financial reserves are equal to at least 50% of the average annual costs, averaged over the previous three years. This is consistent with professional investment advice, and how many societies run their finances.
Each year, Council makes budget projections, taking into account future meetings and their likely attendance and venue, to be able to fund the OHBM meeting and activities while maintaining the financial reserves. At the moment, our primary sources of revenue for the Society are membership dues and meeting registrations. Expenditures include the cost of the conference and its activities, as well as the year-round support of other OHBM-related efforts.
Summary of income and expenditures
Every year we do a projected budget based on a number of assumptions, such as the expected number of attendees for the yearly meeting, as well as expected costs based on historical data. Last year we had projected a $61,293.34 surplus by this time next year. In fact, the record turnout at Rome’s meeting helped to offset the shortfall from previous years, and thus the surplus turned out to be $166,963.59. So, with our conservative financial planning we came out ahead. That said, this doesn’t mean that we have an extra $166,063.59 for the next meeting, but rather that this can be applied towards building back up partially depleted reserves (see below).
Current assets? Presently we have $828,507.86 in assets. After all anticipated funds come in from activities related to the 2019 meeting, we expect to have $995,471.45. We have an investment account for part of this money, allowing us to earn interest, so that we can continue to grow our reserve.
Current financial reserves? Council’s policy is that OHBM should always have at least 50% of average (of 3 years) yearly expenditures in reserves. Over the past 3 years, our yearly expenditures have been $1,963,020.00 in 2017 (Vancouver), $2,117,551.72 in 2018 (Singapore), and $2,492,525.00 in 2019 (Rome); this comes to a yearly average of $2,191,032.24. Thus, for us to maintain at least 50% in reserves, we’d need at least $1,095,516.12. Therefore, to meet that goal, we currently are $100,044.67 short.
Why are our reserves down? The purpose of reserves is to protect OHBM from unexpected fluctuations in either meeting attendance or expenditures. In fact, over the past couple of years, OHBM has weathered a couple of such ‘storms’, each of which required a change of the annual meeting venue at short notice. Those last-minute changes meant that deposits that were made for conference facility rental were not refunded for the cancellation of the meeting (a standard part of the rental agreement) and new costs were incurred to rent the new venue. In spite of these increased expenses, we were able to continue our mission both years—because of our healthy reserves, which did exactly what they were meant to do. However, because the reserves are now slightly depleted, for the next year or two we need to focus on building them back up.
There are three general ways to address this deficit: increase revenue, decrease expenses, or change reserve requirements.
For OHBM, there are really only two practical ways to increase revenue: 1) increase registration and/or membership fees; or 2) fundraise via industry sponsorships. Registration has different tiers, each of which can be tweaked independently. We are sensitive to the fact that our membership is heavily dominated by students and post-doctoral fellows and have prioritized keeping registration costs low for trainees. With respect to fundraising, we are grateful for the continued sponsorship of manufacturers of neuroimaging related equipment and tools.
In terms of decreasing expenses, review of our budget identifies five options that would have the strongest effect: 1) select cheaper locales and entertainment (disregarding the desires of many attendees for going to cities that are also tourist destinations, which can be a difference of up to $300K/year in expenses, 2) cut back on complementary registrations to OHBM Council members, invited speakers, or individuals running educational programs and/or symposia, which currently comprise lost revenues of $191K/year, 3) explore ways to reduce credit card charges or possibly add a service charge to cover these costs, 4) cut back on support to SIGs and other OHBM initiatives, including community outreach programs (currently about $60K/year).
Options like cutting credit card fees (at least partially by providing alternative payment mechanisms for some members) are relatively non-controversial. However, other choices are less clear cut, and thus Council has tried to exercise responsible judgement in making decisions that respect and honor the guiding principles on which OHBM is based. So, what are our priorities? We champion the education and training of the neuroimaging scientists of the future. Therefore, we aim continue to support our SIGs as much as possible, but we also now require them to cover their OHBM administrative costs via a fee and will assess support each year based upon degree of involvement. We have discussed and modified the policy with respect to complementary registrations for the meeting. We have discussed increasing membership fees—structuring cost-adjustments so that trainees are impacted the least. We are actively discussing alternating between popular (but also expensive) locales with less popular, but also operationally cheaper locales for future meetings. With respect to corporate sponsorship, manufacturers of neuroimaging-related equipment already provide support for the meeting, for which we are very grateful. However, given the current controversies in our field relating to for profit scientific publishers, we have hesitated to pursue sponsorship from this corporate area, as we feel that this might be a divisive issue within our community.
As mentioned above, current reserve requirements are based upon a moving average over the previous three years. However, Rome was not only exceptionally popular (a record-breaking 91% of members attended this meeting), but also exceptionally expensive, and thus might be considered an anomaly. If so, it may be a viable option to violate our 50% reserve maintenance policy, if we include a more ‘representative’ three-year moving average, as well as ensure that our meetings for the next few years are lower in costs.
There are also other ethical considerations that Council has discussed. We already have worked hard to ensure that OHBM investments are socially responsible and avoid conflicts of interest. But what about green conference facilities that do not use large amounts of plastic? What about the carbon footprint of the meeting? This affects the choice of venue, and potentially there may need to be a balance between face-to-face activities versus online activities going forward. What about maintaining diversity and accessibility to the meeting? This interacts directly with venue choice, as there may be scientists in middle-to-low income countries who cannot realistically come to OHBM meetings if they only alternate across Europe and North America.
The members of OHBM elect Council to run the society and make such decisions by balancing the requirements and needs of our members and attendees, and we on Council, in turn, try our best to meet these expectations. Ultimately, all of us want the same thing: for OHBM to offer the most benefits to the global neuroimaging community—whether offering cutting-edge talks, offering childcare at meetings, or starting a new open-access open science-journal whose scope includes scientific papers, teaching material, and the highlighting of best practices for different areas of neuroimaging—while ensuring that our organization remains financially sustainable.
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