Welcome to the InfoNet-News For December, 2013
NOTE: Please forward this email to your newsletter editor and officers, mention it in your editorial, bring it up at meetings. Your members like to know what’s going on at National!
Message from Frank Koch, NMRA Chief Financial Officer:
NMRA ECONOMICS – PART 1 – A VERY BRIEF INTRODUCTION
This provides a very broad perspective of NMRA economics. Subsequent articles will provide more detail on individual elements and explain how we fund the various parts of our organization. We have committed to place the annual audit results and budgets on the website once it is redesigned. The IT department is busy with other higher priority work and this project is a bit down the list.
The NMRA is a not a club but is a non-profit corporation, must conduct its business in strict accord with laws and regulations, and must have an annual outside professional audit (We pass with no major issues.). Like many corporations, we have multiple “business” units (four) and each plays a role in our overall financial strategy. Each of the four units serves a specific purpose and we manage them accordingly. The four units are Operations, NMRA Magazine, Non-Dues Programs, and Howell Day Museum (HDM). The first three are interdependent while HDM is treated as an independent financial unit, but still a part of the NMRA. The overall strategy is that the first three units balance each other every year. We do plan for a small surplus in each annual budget to cover unexpected opportunities or expenses during the year.
Within each unit, there are income and expense streams that are budgeted, tracked, and monitored. The challenge is to balance the first three against today’s mix of member services, while finding ways to increase net revenue so that improvements and/or new services and benefits can be provided. We can also choose to redistribute our resources to change the mix of member benefits. As an example, in 2013 the BOD chose to increase the budgets for IT and Marketing so that we could increase our reach and communication to members and non-members over the next few years. The website is being redesigned and responsibility for some content is moving to the Department Heads. The increased Marketing effort includes membership applications in all mail orders from several major suppliers, distribution of materials at railroad museums, and a trial of the Build A Memory initiative.
The total annual NMRA budget varies, but about $2.3 million in 2013. This may seem like a lot but remember that it includes the annual convention, the National Train Show, and a major fund raising effort by HDM in 2013. Each area has its own budget which is reviewed by a Department Manager, the Finance Committee, and then approved by the Board of Directors on an annual basis. Each fiscal year starts with a zero budget and we build it based on the funds needed to deliver the agreed and planned programs. The chart below shows how the 2013 budget was distributed between the four units.
NMRA 2013 BUDGET ($ Thousands)
Operations 668 720
Magazine 352 441
Non-Dues Activities 871 673
Howell Day Museum 458 456
Total 2,349 2,290
This has been a very brief introduction. Over the next year, I’ll expand on each of the four areas and provide an introduction to the various types of assets and liabilities that make up the NMRA. If you have any questions or thoughts, my contact information is in the Magazine and on the website.
Frank J. Koch, NMRA CFO
If you have any questions or comments about any of the above, please send them directly to a Director or Officer. You’ll find those addresses at www.nmra.org on in the NMRA Magazine.
If the person holding a region or division office changes, or their email address changes, please contact me at email@example.com with the corrected information
Tom Draper – HLM, DSA, FA
Director – Support Services