NABJ’s finances are stable for the third consecutive year and the organization’s leaders are optimistic that this year’s host city will bring in a huge profit.
NABJ President Greg Lee said the board expects to bring in a profit between $900,000 and $1 million at the close of this year’s convention in New Orleans.
“We will profit. There is no doubt that this will be a success,” Lee said.
Some of the association’s worst financial troubles date back to 2005 during the Atlanta convention, which left the organization in the red. NABJ officials also reported a deficit in 2006. Organization leaders said financial issues stemmed from a drop in membership and overspending.
NABJ, the largest minority journalist group, began to turn itself around in 2010, reporting a surplus of $419,972.
NABJ treasurer Keith Reed presented the board with a report that showed the group ended the first quarter of 2012 more profitable than in the first quarter of 2011. Reed’s report said NABJ’s assets were nearly $1.6 million as of March 31, a 31.8 percent increase over last year’s fiscal quarter.
Reed said the June date for this year’s convention contributed to a financial boost for the organization, as sponsorship dollars tied to the convention came in earlier than they might have with a July or August meeting date.
Reed’s report said the financial gain was “both a good thing and a challenge for NABJ.” He said the organization would have to keep a closer watch on spending.
“We have 14 months until our next convention, which means we must raise significant revenues outside of our convention in the second half of this year, as well as control spending, in order to remain solvent into early 2013,” Reed said.
Other highlights in the report included an outstanding loan and a need to develop financial policies to govern operations and reduce expenses.
Reed said in an email that NABJ took out a $250,000 loan from the organization’s investment account; $206,000 is owed on that loan.
Lee credited a change in strategy for fostering the group’s financial success.
“Nip and tuck. It’s a simple philosophy: Don’t spend money we don’t have,” he said. “If an event is not sponsored then we can’t have it.”
With 65 percent of the organization’s revenue coming from yearly conventions, group officials said they have started hosting inexpensive fundraising programs to offset the budget between the 2012 and 2013 conventions. Reed’s report showed that a health program in the first half of the year raised more than $70,000.
Re-establishing credit has also been extremely important for the organization, Reed said.
“Every business has credit established to float your cost,” he said. “If your company is on ‘cash and carry,’ that means whatever I pay for I have to pay you. We were in that situation for a few years.”
Earlier this year, the association was approved for a $155,000 line of credit with Bank of America. The president, treasurer and executive director each have credit cards with a $10,000 line of credit to pay for organizational expenses.
The organization had lost its credit due to overspending on credit cards and not having the funds to pay it back. In 2007, the organization had an outstanding credit card debt of $90,000.
In an effort to sustain the group’s financial stability, Lee plans to create a board of trustees to keep an eye on its finances. The board would consist of six members, including two lifetime members, who would serve staggered terms.
“The Board of Trustees will act as the business side of NABJ, and help NABJ maximize its financial success.” Lee said.
NABJ has projected a $2.9 million in revenue and $2.2 million in expenses for 2012, Reed said.
Moving forward, planning will be a key component in preserving its finances, Reed said. The NABJ board still faces a major decision: finding a city for its 2014 convention. New Orleans was originally scheduled to host the 2014 convention, but got bumped up after NABJ decided to leave UNITY, which has its convention in August in Las Vegas.
NABJ has contracts with Orlando for 2013 and Minneapolis for 2015.
Lee said the board has been negotiating with officials in Houston, Washington, D.C., Atlanta and Boston. The organization’s main concern is making sure the 2014 convention is in a prime location and affordable for members. Lee said a decision could come in the next seven to 10 days.
NABJ officials are hoping to continue the organization’s success after making a profit from conventions in San Diego, Philadelphia and, more than likely, New Orleans.
“I expect NABJ to have continued growth, however, we must acknowledge the challenges that a five-day event has on our membership,” Lee said. “We must develop a model that balances the current economic realities. I am sure that NABJ will meet that challenge,” Lee said.