Thank you for your comments. First, let me point out that there is a
question mark at the end of the subject line of this email, and the word
"could" is intended to mean "is it possible that?".
If the banking crisis has taught anything is that accounting reports are
very tricky, and that accountants can present very different pictures
of a given situation using the same basic numbers, but calling things by
different names. As I said before, the opinion of someone with
accounting background may clarify certain things here. I did not bring
up the issue of the IEEE finances into this discussion, but agree with
the original poster that it provides relevant information to this
discussion.
Here is direct quote from the IEEE report:
============================
In 2008, IEEE had revenues of US$342.4 million, an increase of US$2.8
million from 2007 as shown by the Statement of Activities.
The increase in revenue was primarily due to the following:
1. Intellectual property revenue increased US$12.6 million primarily due
to the sale of IEEE's Electronic Library (IEL), which represented
US$10.8 million of the increase.
2. Conference revenue increased US$4.0 million exclusive of intellectual
property revenue from conference proceedings included above.
3. Other revenue increased US$2.6 million.
4. Net investment revenue decreased US$(16.4) million; total net
investment revenue was US$0.0 in 2008 versus US$16.4 million in 2007.
Please note that in 2008 the investment loss of US$70.9 million is shown
as an expense rather than a decrease in revenue.
The operational surplus in 2008 was US$12.5 million.
This was offset by net investment losses and other losses of US$(101.1)
million.
===============================
So, they have revenue increases in the millions, leading to an
"operational surplus" of US$12.5 million. As far as I know, the
operational surplus is what microeconomics books (and regular people)
call profit (total revenue minus total costs). So it is not 10 millions
but 12 and a half millions. Not bad at all.
Now they also report big "investment losses". I think this is the tricky
part. If you own 1000 shares of a company each value at US$200 that
represents US$200,000 in assets. If tomorrow the shares lose US$30 each
in value, that represents a decrease in value of $30,000. Technically
you can call it a $30,000 "loss", and maybe it is. However, that does
not mean that your expenses were higher than revenues by $30,000. It
simply means that due to market fluctuations, the value of your shares
decreased. (Most universities had monstrous "losses" by this criteria
due to reduction in the values of their endowments). However, due to
market fluctuation in the opposite direction, a while later the shares
may recover the initial value and go on to exceed it by USD20 each. All
of the sudden you are $20,000 "richer" than initially. But in fact, you
have had the same shares in the same company all along. So, to a degree,
these fluctuations don't really affect "true" wealth.
At the end of the day, the IEEE still has "net assets" (reserves) of
US$158 millions, which seems atypical for a professional society.
Now, I don't know as much about the NSF as others in this list. However,
it is my impression that the NSF mission does not include providing
"buffer" funds for private corporations (even if they are "non profit"),
so that they are immunised against future uncertainties or market
fluctuations. I suspect they could not grant funds in that category even
if a formal proposal was submitted by such corporation. The same can
probably be said about other funding agencies (NSF or equivalent), in
particular those outside the US. Thus, the direct or indirect use of
funds originating from such agencies for such purpose would seem in
principle questionable.
Virgilio
Joe Touch wrote:
> Hi, Virgilio, et al.,
>
> Some points to keep in mind:
>
> The NSF is only one organization that supports attendees to IEEE
> meetings. Others include other US gov't funding (DOE, NIST, DARPA,
> etc.), non-US gov't, as well as industrial support - either of faculty,
> or of their own researchers directly. It is not accurate to claim that
> "much" of IEEE resources are from any single source such as the NSF.
>
> The IEEE operates as a US non-profit. As such, surpluses in a given year
> are eventually used in other ways. In addition, they are already closely
> monitored by the IRS (US govt tax organization).
>
> Claiming that any IEEE is "more expensive than it should be" is a claim
> that has not yet been validated. I will be sending another post on this
> topic shortly.
>
> As noted, the surplus reported is quite small for a given year (10% of
> revenue), and there are years that run deficits. This is the result of
> unpredictable attendance and variations in costs.
>
> Finally, the surplus reported is for the IEEE - not the Comsoc. So
> evaluating Comsoc fees and drawing a conclusion about the IEEE as a
> whole doesn't follow. The IEEE runs many types of conferences - some
> primarily for research, others for industry. The IEEE also runs a fairly
> large and complex standards organization. Some of the "conference"
> revenues seen at the IEEE level could be the result of standards-focused
> conferences used to support standards activities.
>
> Overall, let's please try not to jump to conclusions. I have been
> working with the Comsoc to determine where costs are and how to reduce
> them. This may result in reduced conference services, however - we can't
> complain about the cost and enjoy a fully-staffed registration desk with
> multiple queues, receptions with buffet lines that rival banquets,
> plated banquets for 2-day, 80-person meetings, or loss-based student
> registration rates.
>
> Please try to keep this all in mind as we proceed.
>
> Joe
>
>
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