A surplus of close to $10M over an approximate revenue of more than
$100M is not very huge. Infact, minor issues or even rumors can wipe
out the entire surplus. We also need to consider that not all
conferences and not all societies contribute to a surplus. The
accumulated surpluses over many years will be our only option left if
we don't have a surplus in any year. I am sure all of us know about
it.
While targeting a moderate surplus, our point is not to have 15-20%
increase on conference registration fees every year in order to
maintain a less than or close to 10% surplus! It seems the surplus
rate is diminishing while revenue rate is increasing. (I don't have
all the figures with me here. So, correct me if I am wrong.)
What worries me the most is where the huge spending of more than $100M
is going. I am sure we do a lot of charity spending which I believe
is not something that we need to cut. Aren't there other opportunities
to bring the spending under certain limits? I strongly believe we
should give a thought to Henning's point that second tier cities may
help us reduce the spending substantially.
The main question is where will we be in another five years if we keep
raising registration fee at the rate of 15-20% every year? One
potential end result that I can imagine is substantial decrease in
paper submissions to ICC and Globecom from a larger part of the world.
So, clearly raising conference registration fee is not a scalable
solution, rather it can only damage the revenues in the long run.
Sometimes it can happen pretty sooner than we expect.
Conclusion: We need new solutions for sustaining IEEE's surpluses
instead of the current practice of mindless increase of, an already
high, registration fees every year.
Thanks
Sincerely
bsmanoj
On Tue, Dec 8, 2009 at 6:45 PM, <habib@ccny.cuny.edu> wrote:
> As a follow up on the question of "surplus" of budgets of the IEEE operations units and bodies, please check this IEEE finance operations manual
> http://www.ieee.org/portal/cms_docs_iportals/iportals/aboutus/whatis/finopsmanual.pdf
>
> In the above manual, which is part of the IEEE bylaws and policies, it clearly stipulates the following (on page 4 of the manual):
>
> Quote:
> 6. Budget Principles
> General:
> a) The IEEE Operations budget must be balanced, meaning that the bottom line will be greater than or equal to zero with no net reduction in overall IEEE reserves.
> b) Individual organizational unit's net budgets (TAB/Societies & Councils (in aggregate), MGAB, EAB, IEEE USA, and the Standards Association) after absorbing the overhead charges must be greater than or equal to zero. Any exceptions must be approved by the IEEE Board of Directors.
> End of Quote
>
> You will see from the manual that "suplus" is used as "Reserve" and the IEEE determines minimum limits for the Reserve. However, it also allows the organizational units where the surplus is generated to expend the Reserve under certain restrictions.
>
> The question ofcourse (in case of conferences) is how much "surplus" or "reserve" is considered fiscally sound for the IEEE yet does not consider excessive burden on the budgets of the attendees who pay conference registration fees. This is the main point. It is favorable for the IEEE to have enough Reserve, but this may not be favorable for the conference attendees.
>
> This is the issue that needs to be visited at the BoG level, the Finance committee, and the IEEE President.
>
> Prof. Ibrahim Habib
>
>
> ---- Original message ----
>>Date: Tue, 8 Dec 2009 20:28:23 -0500 (EST)
>>From: <habib@ccny.cuny.edu>
>>Subject: Re: [Tccc] Questions on IEEE Cost/Benefit Analysis and Fiscal transparency
>>To: tccc@lists.cs.columbia.edu
>>
>>Thank you Ravi for the pointer..
>>
>>This is yet another solid proof of how conferences are a major source of revenues and profit (or call it surplus) to the IEEE, and the fact that the IEEE makes "surplus" or "profit".
>>
>>Regarding Periodicals such as journal publications: The interesting numbers are: revenues: US$ 121,788,700 and expenses for periodicals are US$108, 291,400 with a net "surplus" from periodicals about US$13,388,300 (13 million surplus from periodicals).
>>
>>After all expenses and revenues are calculated. The Total NET cash on Dec. 31, 2008 was US$10M while it was US$9.333 M on Dec. 1, 2007. An increase of approx. US$ 660K in net cash "surplus". This is the surplus. This is net cash after all liabilities.
>>
>>I agree with Ravi, nothing will change. It is an excellent model of operation and hence the IEEE will not change it.
>>
>>Prof. Ibrahim Habib
>>
>>
>>---- Original message ----
>>>Date: Tue, 8 Dec 2009 19:38:27 -0500
>>>From: "Sankar, Ravi" <sankar@eng.usf.edu>
>>>Subject: Re: [Tccc] Questions on IEEE Cost/Benefit Analysis and Fiscal transparency
>>>To: "tccc@lists.cs.columbia.edu" <tccc@lists.cs.columbia.edu>
>>>
>>>To those who are interested in checking the financial health of IEEE, please see
>>>http://www.ieee.org/portal/cms_docs_iportals/iportals/aboutus/annualreport/2008/ieee_annual_report_08.pdf
>>>
>>>This will open some eyes and allow you to put forth arguments with more knowledge and understanding. As you can see IEEE is in fairly great financial shape (most of the loss is due to investment loss like everyone of us) and for the past year the conf. revenues were about $130M , the expenses were about $107.5M and that is a gain of about $22.5 M.
>>>
>>>The treasurer's report points 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.
>>>
>>>So do you see any reason for IEEE management to change the model? So is this waste of time debating the cost of attendance or too many meetings or anything else since it is not going to get any better.
>>>
>>>Ravi Sankar
>>>[r.sankar@ieee.org]
>>>
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>
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--
B. S. Manoj, Ph.D
Electrical and Computer Engineering
University of California San Diego,
CA 92093-0436, USA
Ph:+1-858-822-2564 (office)
+1-858-429-8804 (mobile)
Fax:+1-858-822-4633
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