Dear Colleagues and friends,
In the spirit of transparency and “it takes a village”, I will use this President’s column to discuss SMDM’s financial situation.
A special thank you to Dr. Jeremy Goldhaber-Fiebert (Secretary-Treasurer), Dr. Scott LaJoie (Secretary-Treasurer Elect), and Diane Nickolson (Executive Director) for their diligence and commitment to SMDM’s financial health! The Executive Committee has discussed SMDM’s financial situation on January 19, 2023, followed by an SMDM Board executive session on January 25, 2023.
In brief, our financial situation is concerning. Despite the contingencies put in place by past Boards, our Society’s financial health is dependent upon our best collective effort to increase revenue and decrease spending over the next few years. Our overall goals include reducing our projected net deficit in 2023, to break even in 2024 and generate a (small) net income in 2025. This will not be easy.
Our annual losses have increased over time:
· 2019 – net income USD 60,500
· 2020 – net deficit USD 67,200
· 2021 – net deficit USD 6,500
· 2022 – final reports pending, anticipated net deficit ~ USD 100,000
· 2023 – preliminary budget projects a net deficit
> USD 200,000 [Note: this budget is currently being reviewed and revised to significantly reduce the projected deficit as outlined below.]
Most societies have a financial reserve in place to help during deficit years, and we are fortunate to have a healthy financial reserve, with a Board Mandate to maintain a minimum of USD 450,000 in financial reserves. As of February 1, 2023, we have a balance of USD 617,000 in the long-term investment account (SMDM’s reserve). Because the 2022 final reports are still pending, we are projecting USD 17,000 to accommodate any additional deficits in 2022. After this, there would be USD 600,000 in the account - only USD 150,000 above the mandated minimum. Any investment losses that may occur in 2023 will reduce this amount.
Our net deficits are due to several factors and vary by year, but include three major categories: investment losses, lower revenue from membership dues (especially in 2020), and losses from our annual meetings. We had higher than anticipated meeting costs due to producing the hybrid elements (2022 North American Meeting), did not have AHRQ funding to help support the 2022 and 2023 North American meetings, and had to write off past meeting planning expenses for the 2020 Berlin meeting as we had to postpone the meeting several times due to COVID-19.
We are cautious with respect to the global economic outlook and are anticipating investment losses in 2023. However, there are several activities taking place to improve our financial situation. We have already started to reconsider our meeting structure as part of our 2022-2024 Strategic Plan Activities.
Some changes proposed by the Meeting Structure Task Force (co-chaired by Dr. Olga Kostopoulou and Dr. Beate Sander), such as switching from expensive hotels to other venues (e.g., Universities), could be in place as early as 2024. Venues outside of hotels may also offer less costly hybrid meeting options and prices may come down over time. Dr. Scott LaJoie and Dr. Holly Witteman kindly agreed to co-lead the Moore Foundation Grant Application in collaboration with the Fellows.
The Moore Foundation Grant has allowed us to run an exceptionally successful Fellowship program. We are in the process of identifying a writing team for the AHRQ grant application, which, if successful, will provide support for our meetings in 2024-2026. The Education Committee (chaired by Dr. Petros Pechlivanoglou) has been producing additional fee-based and member-benefit webinars and is expanding our core course program. The Membership Committee (chaired by Dr. Negin Hajizadeh) is developing strategies to increase international and clinical memberships, and collaborate with other societies. Finally, we recently initiated discussions to reinvigorate our Fundraising Committee.
If you are interested in supporting any of these initiatives, please email Diane Nickolson at [email protected] to let us know!
Most of these strategies, while critical in the long term, will not make a difference for the 2023 budget. The Executive Committee has therefore charged the Finance Committee, led by Dr. Ava John-Baptiste, to present two 2023 budgets to the Board for approval. One with a USD 50,000 deficit and the second with a USD 75,000 deficit. This will allow us to accommodate a potential loss of investment income in 2023 and a potential (small) deficit in 2024 while maintaining the Board-mandated minimum of USD 450,000 in financial reserves.
To achieve a 2023 budget with a net loss of $75,000 or less, the Executive Committee has asked the Finance Committee to:
· Budget to break even for the Berlin and Philadelphia meetings. This means we will not be able to plan for hybrid elements to either meeting in 2023. Note that the Seattle meeting in-person attendance was 83%.
· Consider opportunities to increase projected revenue due to potential fundraising activities, including grants (e.g., Moore Foundation, AHRQ).
· Consider increasing projected revenue with meeting and membership fee increases. The SMDM membership dues have not increased during the pandemic. In the past, SMDM membership dues increased by 5% each year.
· Consider other cuts and increases.
These options will impact all of us in the short term; some will be particularly difficult. I also know that many of you will want to help. So, what can you do? Be a member in good standing (i.e., renew your membership as soon as it comes up for renewal), attend the meetings and virtual events – it’s fun and supports SMDM, serve on a committee or task force, participate in fundraising, and donate if you are able – your donations help to support trainees, awards and many other SMDM activities.
While our current financial situation is serious, I am confident we will find solutions to ensure SMDM’s long-term financial health. To bring everyone together and have an opportunity to share information and receive feedback directly, we are planning a virtual membership-wide “Town Hall” meeting to take place in the next few weeks. So, keep an eye on your inbox for the invite!
I love to hear your ideas and thoughts and am always happy to chat! Please reach out to [email protected]
All my best,
Beate
