February 2008 - Rocky Mountain Association of Geologists

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 of Directors faced exactly this
situation in the early 1990s. It is
ironic that symposia and publications
generate much of the cash flow that
our organization uses to operate,
but they can also lose large amounts
of 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 of its downturns.
It is hard to justify the expense of
attending a symposium when you
are dealing with or facing a job layoff.
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 of 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
of 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 of 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 often co-sponsor
our major symposiums and events
with other scientific societies now.
Good examples of this policy are
the Prospect Fair and Technofest
and the 3D Seismic Symposium.
Not only does co-sponsoring these
events help alleviate some of the
financial risk involved, it also leads
to cross-discipline integration of the
subject matter presented during the
events. This broadens the learning
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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 of 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 »
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