Vol. 57, No. 2 8 <strong>February</strong> <strong>2008</strong>
President’s Column by Steve Goolsby (sgoolsby@goolsbybrothers.com) Budget, Budget, Budget — Are We Going to Make it? Imagine running an organization in which you start a new year with $15,000 in the bank and the last major event you sponsored lost $16,000. In other words, you start the year planning a budget while facing bankruptcy. One RMAG Board <strong>of</strong> Directors faced exactly this situation in the early 1990s. It is ironic that symposia and publications generate much <strong>of</strong> the cash flow that our organization uses to operate, but they can also lose large amounts <strong>of</strong> money if they are not carefully planned and implemented. The problem that RMAG faced was that the oil and gas industry had gone into one <strong>of</strong> its downturns. It is hard to justify the expense <strong>of</strong> attending a symposium when you are dealing with or facing a job lay<strong>of</strong>f. RMAG membership fell, and attendance at RMAG events dropped. The resulting slump in revenue almost put RMAG under. Spectacular work by volunteers serving on the Board <strong>of</strong> Directors during this time saved the society. To keep the RMAG running, Draconian measures were imposed on all financial transactions for the organization. Up to this time, each committee managed their own budget, and each committee chairman basically operated independently. I remember being the Continuing Education Committee chairman for several years during the 1980s and early 1990s, and OUTCROP we basically organized the budget for RMAG symposiums and short courses with little or no oversight from the board. The committee made its own arrangements for meeting rooms, beverages, and speaker expenses. We were not very concerned about whether or not the symposium lost money or broke even. After it became evident that RMAG was about to go bankrupt, the Board <strong>of</strong> Directors implemented new rules that now dictate that each committee must forward a budget to the Board for approval before any money can be spent on an event. Furthermore, most <strong>of</strong> the meeting arrangements are now made by the RMAG staff rather than by the committee itself. With the staff making the arrangements, RMAG can negotiate volume discounts on meeting rooms and other expenses. Additional policies were also implemented to help spread the financial risk inherent with having major educational and social events. For example, we <strong>of</strong>ten co-sponsor our major symposiums and events with other scientific societies now. Good examples <strong>of</strong> this policy are the Prospect Fair and Techn<strong>of</strong>est and the 3D Seismic Symposium. Not only does co-sponsoring these events help alleviate some <strong>of</strong> the financial risk involved, it also leads to cross-discipline integration <strong>of</strong> the subject matter presented during the events. This broadens the learning 9 opportunities within the meetings, which provides an added benefit to our members. A n other p o l i c y t h a t was implemented has proven to be a real boon to RMAG. The Board <strong>of</strong> Directors established a savings account for the organization, which we now refer to as the RMAG investment account. This account was established to help the society survive the next industry downturn. Over the years, with good management and on-going additions during the better years, the account has grown to just over $700,000. There has been some grumbling that with this much money in the bank, why should the RMAG still charge so much for their events and membership? Why not spend the money in the investment account to discount things? Just how much does it take to keep things running during a downturn? To address this question, RMAG Treasurer Mark Williams and I sat down a few months ago and reviewed the budget to try to determine how much money would be needed to see us through a twoor three-year downturn. We did our best to project what would occur, and made some major assumptions about our membership numbers and event attendance. For example, we assumed from past experience that our membership would drop by about a third, and that event attendance would drop to about 50% Continued on page 21 » www.rmag.org