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Volume 55, Number 3 Summer 2022
Edited by Dominique Thomas, Morehouse College
Written by Christopher D. Nettles, SCRA Treasurer
I was elected to the Treasurer position in 2021 and started in Mid-August of the same year. Since then, it has been an opportunity for me to learn about this role and gain a deeper understanding of the Society for Community Research and Action’s (SCRA) finances. This column represents my commitment to financial transparency at SCRA. Please feel free to email firstname.lastname@example.org if you have any questions at all.
The American Psychological Association (APA) provides accounting services (and legal counsel) to us at no charge. This report was created with financial details we have been provided by APA in April 2022, after the books officially closed. I provided a provisional report during the 2022 Mid-Winter Meeting in February. This Treasurer column may be considered the final word on fiscal year 2021. All dollar figures stated are rounded to the nearest one thousand dollars.
Overall, in fiscal year (FY) 21 we took in $392K in total revenue and we incurred $315k in expenses, giving us a surplus of $77k, which we will apply to the FY22 budget.
In summary, our membership numbers and the associated revenue are stable and were a bit higher this past year, consistent with a Biennial year (which 2021 was). Our ‘21 Biennial revenue was about one-third of previous years and our expenses for the ‘21 Biennial exceeded revenue by about $9k. We continue to have good financial stability resulting from the American Journal of Community Psychology, our major revenue source, which included significant bonuses in 2020 and 2021 ($135k & $90k, respectively). Also, the assets in our long-term investment accounts ($2.23M) grew moderately in 2021. The details follow.
We took in $50K from membership dues in 2021, up $8k from 2020, and this was similar to other Biennial years. Our membership numbers seem relatively stable.
The 2021 Biennial sustained a minor loss. The loss was primarily driven by the revenue side of the equation. The 2021 Biennial brought in approximately $49k, which is about one third of our historical average revenue. Due to the fact that the 2021 Biennial was virtual, expenses were substantially less than previous Biennials ($58K in 2021). However, revenues were not enough to cover expenses. We lost about $9k on the Biennial in 2021.
That American Journal of Community Psychology, published through Wiley, continues to be a bright spot in our ongoing finances. In addition to our annual base royalties ($100K), in FY2021 we received a $90k revenue sharing bonus.
In FY2020, the $135K AJCP bonus was placed into a protected 3-year budget to fund activities associated with the Call to Action on Anti-Blackness. While there was $78K budgeted in FY2021 for these activities, we only spent half the budgeted amount (~$38K spent). We have approximately $98k left to spend in FY2022 and FY2023 combined.
Our investment accounts are doing well. As of end of FY2021, year-to-date return was 7.4%. Our SCRA Risk-to-Return Analysis year-to-date was within the range of a moderate return with moderate-risk investment strategy, as required by our investment criteria. Historically, our investment goal has been 5% growth per year as guided by the EC. Our investment firm ensures that SCRA is investing in socially responsible industries. As of Q4 2021, we had about $2.23M in unrestricted assets contained in our investment accounts. More details are provided about our investment accounts in the Historical Information section.
Our membership dues normally account for between 12% and 25% of unrestricted income. Over the last decade, annual totals have ranged from $56k (2017) down to $37K (2015). Our revenue from membership dues in 2021 was consistent with previous Biennial years.
American Journal of Community Psychology
Historically, AJCP royalties have been the largest source of our income over the past decade, providing between $100K and $368k annually. These royalties account for about 65% of our annual unrestricted revenues, on average. As you can see from the chart below, while we had good years in 2020 & 2021, the overall trend for annual royalty dollars is downward.
We expect to obtain $100,000 as our base rate of royalties from AJCP for the next few years. That appears stable. We have had 2 years in which we received bonus revenue sharing ($135k in 2020 and $90k in 2021) from AJCP which has allowed SCRA to take on major initiatives like the Call to Action on Anti-Blackness. We have protected the 2020 AJCP bonus ($135k) as money intended for the Call to Action. The $90k FY2021 AJCP bonus allowed SCRA to completely absorb the 2021 Biennial loss. Trends in the academic publishing industry, such as open access and institutional journal cancellations indicate that we should be cautious about this source of revenue over the longer term.
During Biennial years, we have typically taken in between $150k and $190k in Biennial revenues. This year our virtual Biennial conference only brought in about $48k. After expenses, we often make a little money on the Biennial. In FY2021, after expenses, we lost almost $9K on the Biennial conference. This was primarily due to dramatically lower Biennial conference registrations in 2021.
Our Long-Term Investments
As of the end of Q4 2021, we had $2.23 million in unrestricted investments, with approximately $102k in restricted award accounts (Sarason, etc.). We continue to employ a moderate risk/moderate return strategy with a mix of about 63% stocks and 30% bonds/fixed investments/cash and 7% in gold.
We have averaged a 7.4% return in the prior 9 years. But as you can see, the variability is significant. Fortunately, we have good advisors and an investment committee that oversees those investments. We invest rather conservatively, trying to reduce risk of principal loss. Our investment manager has been instructed to invest our assets in a socially responsible way. They employ an Environmental, Social, and Corporate Governance (ESG) strategy to determine appropriate companies for our portfolio
Historical trends suggest that we will continue to prosper, even with occasional minor financial difficulties. The American Journal of American Psychology contract with Wiley expires in 2025. Negotiating a similar long-term contract would keep us in good financial health through the end of the decade. Our long-term investments give us added stability in case of unforeseen events and are consistent with other APA divisions, holding approximately six times the annual expense budget in a quasi-endowment.