This update is presented by both Acting CEO, Denise Parker and BOD Chair, Bill Corbin
We have been able to analyze the fiscal issues facing the organization and, in keeping with our commitment to transparency, wanted to share them with you. We received final word on USOC funding for 2009; we finally know where we stand with the NAA Foundation with regard to liabilities and contributions; and we proactively reduced our revenue expectations to reflect the current economic climate.
We are using 2009 as a rebuilding year and intend to make the difficult financial decisions necessary to get USA Archery back on its feet. We are aggressively attacking our budget shortfalls and clearing up debt. However, these difficult decisions come at a price and we want to share the changes we see coming for 2009.
First, let us outline the major financial issues we face:
Key financial issues facing the organization for 2009
- $106,000 less USOC funding than in 2008
In 2008 the USOC provided $525K of base funding which broken out amounted to $492K in cash and $32K in airline value in kind (VIK). For 2009, the USOC has cut our funding to a total of $419K with a break out of $393K in cash and $26K in VIK. These cuts were an outcome from our poor performance in the past two Olympics combined with a 10% program support cut across the board for all sports because of the economic climate relative to sponsor support.
- $61,000 estimated decrease in membership dues, tournament income and general donations and program support scheduled for 2009
In a recent conference call Jim Scherr, USOC CEO, expressed concerns that not enough NGBs were accounting for a substantial drop in revenue next year due to the tight economic outlook. His recommendation was for NGBs to anticipate a 10-15 percent decline in their revenue generating programs to ensure that they don't get caught overspending. We have adjusted our budget accordingly which has reduced our 2009 budget by $61K.
- $76,500 loan from the NAA Foundation
In 2006, USA Archery took out a loan from the NAA Foundation in the amount of $88,000. During the 2007 year, USAA Archery repaid $51,500 of the outstanding debt. In October of 2008, the former administration, without board approval, requested and was granted an additional $40,000 loan from the Foundation to cover the cash shortfalls facing the organization. The balance on this loan is now $76,500. Our normal 2009 contribution from the Foundation would have been $113,837, but the Board may elect to deduct the entire debt from this payment in order to move forward debt free in 2009. Therefore, if the full debt amount is applied, USAA's grant amount will be $37,337. We are also projecting a much reduced grant in the future as the amount is based on a percentage of the asset value and/or earning on the investments which has taken a severe hit in the past year. As an example, the NAA Foundation account balance as of June 2008 was $1.538M and in October of 2008 it had fallen to $1.090M.
So where do we stand going into 2009?
One of the most important things to understand is that we are debt-free going into 2009. It is important to make responsible choices for the 2009 budget by recovering the revenue shortfalls and budgeting some reserves to help minimize future cash flow issues. However, it will hurt a bit in 2009. But in the long-run the organization will be much better off to take the hit now and get back on its feet. We are also aggressively seeking new commitments from key partners and sharing this transparency with them.
What changes can you expect based on these budget cuts?
- Elimination of the Coach Development Manager position
With the most recent budget information back from USOC, it does not appear that we will have the funds to hire the Coach Development Manager in 2009 as previously thought. The cuts from the USOC were much higher than we initially anticipated. For now, the new High Performance Manager would continue to manage both coach and athlete development.
- Elimination of the USA Archery magazine for 2009 ($50,000 savings)
We will be posting online only (not printing and mailing) the 2008 winter edition of USA Archery magazine within the next couple of weeks. We will be eliminating the print magazine for 2009 and will review our overall membership communication strategy in the upcoming months to determine what method we will use to communicate effectively to our membership going forward.
- International Travel
There will be no money from our budget allocated to athlete travel in 2009. However, we have funding requests pending with the Easton Foundation which may provide travel support to some athletes. We should know the outcome of these requests by March.
- Jr. Dream Team Program and Resident Athlete Travel
The upcoming Jr. Dream team camp in February will be funded as in the past. However, additional support for future Jr. Dream team camps and R.A. travel is currently being reviewed by the Board. A final decision regarding the level of support will not be known until we have confirmed the financial support we will be receiving from our partners.
The next Board meeting will be February 27-28th. During this meeting the Board will discuss these issues in detail and officially approve a budget. In early March, we will share with you the decisions reached by the Board.
The Board is committed to actively seeking new funds from our partners and equitably distributing current funds to support all facets of our sport. We hope you understand that we are approaching 2009 very cautiously and are doing everything possible to get the organization financially healthy again.
Bill and Denise