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Also shown in Figure 1 (red curve) is a rolling average of the reserves of the previous three years. Because the reserves grew at a CAGR of 6.6%, it is quite reasonable each year to add to our operating budget a 4% transfer reserve subsidy (as ap- proved by the Executive Council) in the budgeting process of the ASA. By doing this, the ASA is better able to keep mem- bership dues and meeting registration fees under control.
Figure 2. Revenue versus expense of the ASA.
Figure 2 shows the total revenue (operating revenue plus a 4% reserve subsidy) versus expense for the years 2007 to 2016. Aside from the years 2008 and 2013 to 2016, the ASA has achieved a reasonable surplus regarding total rev- enue versus expense. But going forward, it is apparent that without increasing revenues and by continuing to subsidize programs, using the reserves of the ASA to offset meetings, standards, and outreach expenses will ultimately lead to a deterioration of the financial position of the ASA.
The ASA derives its operating revenues from (1) member- ship dues, (2) JASA publication (including journal subscrip- tions and publication charges from authors and members), (3) meeting registration fees, (4) standards (including sales of standards and organizational member dues), (5) sales of books and publication royalties, and (6) assets released from restrictions. (Note that none of the contributions to the Acoustical Society Foundation Fund go to operating revenues.) A 10-year history of operating revenues is shown in Figure 3. The major revenue source of the ASA is JASA publication (about $2.5 million per year, most of which is derived from library subscriptions) that has been relatively flat over the 10-year period. The nonmember subscription
2 See the Sound Perspectives article in this issue by Carl Rosenberg regarding the Foundation Fund.
Figure 3. Revenue sources.
numbers have been decreasing 3-5% per year, but we typi- cally increase subscription rates by about 5% per year, an obviously untenable solution.
Figure 4 shows total expenses for the same 10-year his- tory. These include (1) JASA publication charges, (2) stan- dards development and publication, (3) meeting organizing charges, (4) finance and administrative costs associated with ASA operations, (5) “other” that includes outreach and spe- cial project programs, Acoustics Today, and books. Note that the meeting's revenue and expenses dramatically changed in 2008, 2012, and 2013. In 2008 and 2012, the meetings were held in Paris and Hong Kong, respectively, and for both these meetings, the finances were not handled by the ASA. In 2013, the spring meeting was held in Montreal and there was a very large attendance (over 2,000 attendees), resulting in unusually large revenues and expenses.
Using 2015 as an example (the last available audited results), the ASA total operating revenue was $4,324,764 and net ex- penses were $4,945,356, resulting in an operating deficit of $620,592. As mentioned earlier, the unrestricted reserves as of December 2015 were about $13.5 million, and a 4% draw on the unrestricted reserves is reasonable without adversely affecting the principal. In this case, the draw amounted to $540,000, which was close to covering the 2015 operating deficit.
Looking at Figures 3 and 4, we see that for 2015, JASA pub- lication was the principal source of revenue, $2,465,311 or about 57% of operating revenue, and the largest expense was $1,240,173 or about 25% of operating expenses, resulting in a surplus of $1,225,138. This JASA surplus helped subsidize the net losses in the other cost centers. Such surpluses have existed for many years, but as we look to the future, there is concern that this may not continue in the years to come as publication models change.
A review of program revenues over the last decade shows that income has been relatively flat (Figure 3). Therefore,
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