NABJ seeking path out of financial woes

Jul 29, 2010

By WESLEY LOWERY AND DEXTER MULLINS
nabjconvention.org

This week’s convention is make or break for the National Association of Black Journalists’ future, officials say.

NABJ  has met its registration and hotel room targets this summer, said Drew  Berry, interim executive director, showing signs that the organization  may have found a path out of the worst of a financial storm that some  officials say started nearly a decade ago.

After closing 2009 with a deficit of $338,901, NABJ officials are doing a lot  of belt-tightening as the organization moves forward. NABJ is operating  with a $1.04 million budget in 2010.

“We  need to be lean and mean in San Diego; have a good convention, but come  out strong for Philadelphia next year,” said NABJ treasurer Greg Lee.  “We’re doing well but we still have a long way to go.”

Board  members, along with whoever is tapped to take the reins as the next  executive director, have the arduous task of figuring out how to get the  organization back into the black. The executive director is responsible  for making day-to-day financial decisions. The board is responsible for  signing off on the budget and hiring and firing the executive director.

Officials  have discussed raising membership fees and beefing up the board with   business-savvy individuals who are well-connected and can bring in  bigger donations. They say NABJ must continue finding other streams of  revenue so the organization is not so dependent on annual conventions –  NABJ’s bread and butter.

According to a review of documents obtained by The Monitor, the  organization’s finances have been particularly bad since the 2005  convention in Atlanta, which left the organization $255,797 in the red. Things got even worse the following year when NABJ reported a $631,095 deficit, according to tax documents.

Some  of NABJ’s past presidents attribute money problems to a myriad of  issues – from overspending and unanticipated expenses to poor planning  and disconnect among board members and the executive director. The  ailing economy has siphoned away hundreds of members and that, too, has  affected the organization.

Lee, who was critical of spending during the 2006 convention in Indianapolis, has said there’s been a lack of oversight.

“Once  their term is up, board members see (financial issues) as ‘the next  boards’ problem,” Lee said. “In order for NABJ to thrive once again, no  matter what leadership team is in office we have to build on the  previous board’s work if they do good work.”

Since 2005, NABJ’s membership has dropped almost 27 percent.

President Kathy Times sent an e-mail in October 2009, saying the organization had  lost 887 members since 2008 — a $78,525 drop in day-to-day operating  dollars.

With  about 2,820 members according to most recent figures, NABJ is the  largest of the journalist-of-color associations. But NABJ has struggled  to get members to attend. About 2,500 people attended the NABJ  convention in 2006. The number of attendees dropped the following year  to 1,700. NABJ officials expect about 1,600 attendees at this week’s  convention – 323 fewer people than last year’s convention.

That  slide in numbers has had an adverse affect on the organization. For  example, NABJ was hammered with $150,000 in fees in Tampa last year  because it failed to meet hotel reservation requirements that had been  negotiated years in advance.

Hoping  to avoid a similar fate this year, NABJ renegotiated its hotel  agreement, slicing the number of rooms from 6,800 to 2,850.

Here  was the problem: NABJ’s bylaws require the organization to book its  convention sites five years in advance, not allowing the organization to  factor in dips in the economy.

During  an executive board meeting earlier this week, the board voted  unanimously to postpone its selection of a host city for the 2016  convention until it had a clearer picture of its financial situation and  it evaluated its process for planning conventions.

Lee  said if NABJ can avoid fees from this week’s convention and keep  overall costs down, the organization should be in good shape entering  2011.

“I’m very cautiously optimistic that we will leave San Diego without any bills,” Lee said.

Following  the 2000 convention in Phoenix, NABJ faced a deficit after poor  turnout. Wayne Dawkins, NABJ historian and a former board member, said  that hosting a convention in the West hurt NABJ because most of its  members are in the East Coast.

“Between  participating in the UNITY conference on the West Coast in 1999 and  coming back and having (the NABJ) convention in Phoenix in 2000, it  really put a hurt on the finances,” Dawkins said. “The year 2000 is when  NABJ went through a tailspin.”

Shortly  after that convention, then-executive director Toni Samuel abruptly  announced she was leaving the organization to accept a new job.

Later that year, Tangie Newborn was brought in to steer the ship.

“I  inherited an organization with a $340,000 deficit,” Newborn said.  “NABJ’s revenue base heavily depended on the annual convention for 65 to  70 percent of its operating budget.  My goals were to reduce that  dependency margin and begin to create new revenue streams by increasing  membership recruitment and retention, creating new products and  services, and developing new educational programs.

In  the five years Newborn served as executive director, NABJ grew from  about 2,000 to more than 4,000 members. Fundraising goals were set at  more than $1 million annually.

“We  instituted a plan to build a better budget by employing the ‘under  promise, over deliver’ philosophy. It worked,” Newborn said.

At the 2005 board meeting, Newborn reported a $45,000 budget  surplus. Months later, after factoring in costs associated with the  Awards Gala and the 30th anniversary program, NABJ reported a deficit of  255,797.

At  the time, Newborn was receiving $125,252 in salary and $7,262 in  benefits. On March 6, 2006, Newborn resigned as executive director.

“We  made a switch when it became clear a new direction was needed,” said  Bryan Monroe, who was NABJ president from 2005-07. “It was a performance  issue. We ended up doing what was the right thing to do for the  organization at the time.”

Newborn said she did not leave on bad terms; it was time to move on to the next job.

Things would get worse after expenses created at the Indianapolis convention when NABJ’s deficit ballooned to $631,095.

Monroe attributed much of the financial hardship under his tenure to overly  optimistic revenue projections and unanticipated convention costs,  including fees for not filling the hotel block.

“The  issue that often happened was that revenue projections were not met,”  Monroe said, adding that NABJ was hit with fines as high as $100,000 for  not filling the predetermined number of hotel rooms during his time as  president. Monroe said he could not remember which years during his  presidency NABJ was charged for failing to fill its hotel block.

Lee, currently in his second term on the board, said blame for budget problems in 2006 is about leadership; not hotel rooms.

“The  2006 deficit was a result of just overspending,” Lee said.  “Indianapolis is a great city and a great town, but expenses shouldn’t  have been as high.”

Karen Wynn-Freeman was tapped to replace Newborn. Wynn-Freeman earned $93,242  plus $10,119 in benefits for her first nine months as executive  director, according to documents obtained by The Monitor.

In 2008, Wynn-Freeman’s salary had jumped almost $50,000, including $35,000 more in benefits than her predecessor.

Barbara Ciara, then the Vice President for Broadcast, was elected in 2007 to  succeed Monroe as the organization’s president at the Las Vegas  convention. Ciara restructured Wynn-Freeman’s contract and began looking  for ways to bring in money to shore up the deficit. The Monitor asked for a copy of Wynn-Freeman’s contract, but requests were denied, citing personnel reasons.

“The industry had been projecting in an erratic manner,” Ciara said.  “It’s been difficult for us financially for at least the last seven  years.”

Ciara attributed much of NABJ’s financial hardship to inefficient, unprepared leadership.

“There was a lack of accountability, and just no accounting of certain things (in the budget).” Ciara said.

In  2007, NABJ began to bounce back, boasting increases in revenue from  convention registration, membership dues and programming fees. By the  end of 2008, NABJ had $69,776 in the bank, according to tax documents.

Ciara said she added new streams of revenue so NABJ would not have to rely on the annual convention.

In 2008, NABJ got a major boost from the UNITY: Journalists of Color convention in Chicago.

UNITY, a gathering of members in NABJ, the National Association of Hispanic  Journalists, the Asian American Journalists Association and the Native  American Journalists Association. The convention is held every four  years and participating organizations split revenue from the convention.

“Most of the time, UNITY is a successful financial year,” Ciara said. “Everyone makes money during UNITY years.”

Despite making money at UNITY ’08, leaders knew there was a bleak financial outlook for the 2009 convention in Tampa.

“In 2008, we made money but we negotiated an unattainable room block for Tampa,” Ciara said.

The contract signed in 2004 with the Tampa Marriott Waterside Hotel and Marina in Tampa required NABJ to fill 5,669 rooms. The organization came up short by 2,341 rooms.

“Nobody  knew when the contract was signed in 2005 that we would be facing the  greatest economic challenge since the Great Depression,” Times said in a  message to members in October 2009. “We are not surprised that we did  not meet our contracted room block at the convention.”

Lee  said NABJ also incurred increased cost at the Tampa convention after  failing to make budget cuts in a timely manner. He said a lack of  communication among board members allowed the window to close when it  was time to trim.

“We  knew at the convention that we had problems,” Lee said. “We were doing  well sponsorship wise, but we didn’t know other things.”

A decline in membership didn’t help NABJ’s 2009 financial situation.

“We’ve  lost over $97,000 in membership dues over the last three years,” Lee  said. “We had a high of 4,100 (members) in 2005. We’re sitting at just  about 3,000 members now. People are losing their jobs and can no longer  afford to attend the conventions, the individuals can’t afford to come,  they can no longer afford their membership, and as a result we lose  members.”

Convention  costs and fines crippled NABJ’s balance sheets, and Lee reported to the  board on Tuesday that the organization closed 2009 with a $338,901  deficit.

Wynn-Freeman resigned in December 2009. She could not be reached for comment.

On the onset of her presidency, Times said Thursday it was devastating to learn that NABJ was in “dire straits.”

“We started our administration off with bills that needed to be paid,” she said. “It was a tough time for us.”

It’s not clear why Wynn-Freeman resigned. Times declined to discuss Wynn-Freeman’s resignation.

Former finance committee chairman Berry has functioned as the interim executive director.

Once things wrap up in San Diego, NABJ will need to complete its search for the next executive director.

As  of last week, the search – led by Linnie Carter & Associates – had  cost NABJ $10,865.88, Linnie Carter said in an interview.

Lee says the organization budgeted just over $12,000 for the search. A  contract has been extended to a job candidate, but officials would not  release any details. A new director could be named Aug. 13.

Much like the outcome of the San Diego convention, the next executive  director will play a large role in determining NABJ’s future.

Monroe  said the role of the board should be to set a broad vision and goals  while the executive director is there to manage day-to-day tasks. The  executive director and the president will have to lay out a vision for  success.

“Where is NABJ right now? We’re certainly at a crossroads,”  Monroe said. “We have a rich legacy, strong history and some amazing  members but we’re in an industry that is changing drastically. The  relationship between the president and the executive director is  critical.”

NABJ  officials say there’s no doubt that the executive director’s job comes  with a lot of pressure. It’s blanketed with lofty demands in a highly  intense environment, Lee said. NABJ politics also makes retention of the  executive director difficult, he said.

“Part of the problem is dealing with the politics,” Lee  said. “A former president said, ‘we eat our executive directors like our  young.’”

Times said the ability of the board to work with the new executive director is extremely important to NABJ’s future stability.

“I look forward to growing with the next executive director,” Times  said. “I’m really determined to ensure the next administration doesn’t  inherit a debt, and we’re getting there.”

To date, last year’s deficit has been paid down from more than $300,000 to around $158,320.

During an executive board meeting Tuesday, Berry highlighted  some of NABJ’s cost-cutting measures. Eliminating expensive contracts  and finding cheaper replacements was among the topics discussed. For  example, Berry said, a contract for printing business cards was $3,000  for 600 cards. An alternative vendor produced the same amount for $376.  Berry also suggested that an additional $50 be added to the regular  membership fees to help generate revenue for the organization.

There also was talk of adding to the NABJ executive board  four business executives who could bring in bigger donations. Ideally,  these board members would be non-journalists in vice-president or CEO  positions within their companies, and would potentially have full voting  rights on the board.

“These people are used to bringing in large donations in  amounts that, let’s face it, you and I can’t bring in,” NABJ secretary  Roland Martin said during the board meeting.

NABJ members hope to see the organization turn things around.

Kalisha  Whitman, who has been an NABJ member since 2005, said she knew that  NABJ had a deficit after last year, but didn’t realize how much it was.  She wants leadership to step up and “be better stewards of the members’  money.” It’s about accountability on multiple levels, she said.

“I’ve  heard of members that have gone to the career fair that are not  registered, and I’ve heard of professional members registering as  student members instead of professional,” she said. “We need people that  are going to enforce those policies. I know that won’t take care of  everything, but it can help show a little more financial  responsibility.”

Lee expressed optimism about the future. In the past four  years, NABJ has spent nearly $2 million to host conventions. In order to  have a successful conference, Lee said, they would have to spend around  $700,000 but they won’t know final figures until the end of the month.  Lee said he would be happy if NABJ makes a small gain, but will likely  “only make one hundred or two hundred thousand dollars.”

If  NABJ doesn’t do well in San Diego, Lee said the organization would not  collapse. But they want to be in a good position for next year’s  convention in Philadelphia.

Regardless, the mindset will likely change.

“We have to live within our means,” Lee said. “Just because we’re the  biggest association doesn’t mean we have to put on the biggest show.”

Editor’s note: The Monitor reviewed tax documents from the last five years for this story. Download a copy here.