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Hi, Virgilio,
Some thoughts on the surplus issue...
Virgilio Rodriguez wrote:
> Dear Dr. Manoj:
> I appreciate your thoughtful message, and agree with much of it.
> However, I am also having difficulties with some of its content.
>
> It appears to imply that surpluses should continue to be generated at a
> significant rate (10% of revenues or more) at perpetuity, because
> "The accumulated surpluses over many years will be our only option left
> if we don't have a surplus in any year".
>
> Please, correct me if I am wrong, but --- considering that IEEE purports
> to be a not-for-profit institution --- isn't the main (or ONLY) purpose
> of the "accumulated surpluses" precisely to serve as "rainy day" funds
> in those years in which unanticipated events create some special hardship?
Surpluses are used in a variety of ways in a non-profit such as the IEEE:
- support a required buffer against unexpected conference losses
some organizations require a buffer of 50% of
conference costs
- support meetings that operate at a loss
a small surplus in any single year
isn't necessarily that significant
- self-sponsor
student grants, resource-limited grants,
grants for meetings on particular topics of
strategic importance, etc.
> If I am correct, then, the policy should be to generate surplus UP TO
> the point in which savings reach certain level deemed prudent (and
> adjusted by inflation, of course). As soon as that level is reached,
> then budgeting/pricing policy should aim to generate close to zero
> surplus.
That is the general plan, FWIW.
> On a related note, some comments (not necessarily yours) seem to say or
> imply that IEEE should aim to perpetuate itself. While such aim sounds
> in principle reasonable, it is by no means uncontroversial. The IEEE is
> supposed to be a professional association integrated by individuals who
> willingly decide to join it. In the hypothetical case that the IEEE
> disappears because not enough individuals continue to believe that it
> offers to them more value than it costs, it is difficult to see why that
> would be a bad thing. Isn't that normal for a "free" society?
Yes, but it's not unreasonable for even a useful organization to spend
some modest resources on self-promotion, to get the word out about what
it is and why it's worthwhile. Ultimately, if that cost exceeds the
benefit, the org will disappear, as you note.
Joe
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