Last year, PRSA realized a modest surplus from operations of $73,000. In addition, investment returns added $197,000 to PRSA’s reserves, otherwise known as its net asset balance or “rainy day” fund. This information is supported by the unqualified opinion issued by certified public accounting firm PKF, PRSA’s independent auditor.
As a result, PRSA met its annual financial goal of returning 1 percent of budgeted expenses to the Society’s financial reserves. In keeping with association best practices, PRSA is working to grow its financial reserves to 50 percent of its annual operating expenses, up from 33 percent of annual operating expenses currently.
“The recently concluded audit of PRSA’s 2010 financial statements shows a small financial gain for the Society,” says PRSA Chair Rosanna Fiske. “When you benchmark PRSA’s 2010 financial performance against that of other, similarly sized organizations, you can appreciate the significance of returning even a small surplus from operations.”
Last year, Fiske says, most associations withdrew from, rather than contributed to, their financial reserves. When viewed from that perspective, she says, “PRSA clearly did better than most.”
The year was not without its challenges, however. Returning even a small surplus required PRSA to continue aggressively cutting costs, which it did by rebidding contracts, reducing staff, freezing salaries and implementing more cost-efficient technologies.
Over the past several years, PRSA has cut $1.5 million from its operating expenses.
Preparing for the Future
While PRSA currently is forecasting that it will meet its net financial goals for 2011, these goals do not include making the minimum 1-percent contribution to its financial reserves. This is the first time in recent memory that the Society’s financial forecast anticipates being unable to make the 1-percent contribution.
As a result, PRSA’s Board of Directors has engaged a Business Model Task Force
to evaluate the Society’s 2011 financial forecast and to recommend changes that will best maintain the Society’s future financial health.
“PRSA already has made significant cuts in expenses and exhausted potential new sources of revenue, so volunteers and staff need to have a better sense of where future revenue will come from,” says Fiske. “This will help to ensure PRSA’s ability to invest in products, services and benefits that keep member-satisfaction high.”
In addition, PRSA has not increased the cost of member dues since 2002, despite a more than 21 percent rise in the Consumer Price Index
(CPI) over the same time period.
The Business Model Task Force’s recommendations are due to be submitted in April.
About the Public Relations Society of America (PRSA)
With more than 31,000 members, PRSA is the largest organization of public relations professionals and students. PRSA is comprised of 112 local Chapters organized into 10 geographic Districts; 14 Professional Interest Sections that focus on issues, trends and research relevant to specialized practice areas, such as technology, health care, financial communications, entertainment and sports, and travel tourism; and the Public Relations Student Society of America (PRSSA), which has more than 300 Chapters at colleges and universities in the United States and abroad. PRSA is headquartered in New York.