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Notes from the SCAR President, number 42 (7 October 2011)
URGENT - Proposed Increase in SCAR Membership Fees
Colleagues,
We will once again face a decision in 2012 regarding an increase in SCAR membership fees. SCAR addresses the gradual decline in "buying power" (due to inflation and agreed salary cost-of-living and merit increases) by consideration of occasional escalations in membership fees. To maintain a viable Secretariat and ensure stable funding for essential core activities, these increases occur about every six years and the last increase was in 2006. In 2008 a fee increase was agreed but not implemented due to a favorable change in currency exchange rates (membership fees are collected in US dollars and Secretariat costs are paid in British Pounds). In 2010, it was agreed that an increase in membership fees was needed. It was also agreed that a business case ("The Case") would be provided to assist Delegates in negotiations with their funding agencies. "The Case" was previously provided and has been updated through 2010 (view the updated Business Case). "The Case" addresses fiscal issues and other documents, such as the SCAR Strategic Plan, address "value for investment" issues.
"The Case" is self-explanatory and I will not repeat the details in this Note but refer you to the document. However, I do want to draw your attention to important details. The proposed increase in fees is nominally 20% (the actual increase is 18.7% as the maximum increase is capped at $4000/year and Level E membership fees are unchanged) and would take effect in 2013. If agreed, it will have been seven years since the last fee increase was enacted. In terms of US dollars per year, the increase by membership level is (n = the number of countries per level):
- - $4000 (n=2),
- - $3200 (n=10),
- - $2600 (n = 6),
- - $1900 (n = 13), and
- - $0 (n =5).
For two-thirds of SCAR's members, the increased annual cost is $2600 or less. Collectively this will increase SCAR base revenues by $80,300 (current annual fee based revenue is $450,500). For comparison, full funding of all three SSGs is est. $63,000 and full funding for three Scientific Research Programs is est. $75,000 demonstrating the impact of, and the potential scientific return on, the proposed increase in revenue.
Revenue is only part of the equation of an organization's finances. "The Case" outlines cost savings and reductions in budgets that have been adopted to ensure balanced budgets each year and efficient use of resources. Significant cost savings have been realized in operations of the Secretariat through a retirement and two recent hires. From my own informal review of the level of staffing and salaries for Secretariats in similar organizations (particularly IASC), the SCAR Secretariat works with a minimum staff (1 full-time Executive Director, 1 full-time Executive Officer, and 1 half-time Administrative Assistant) paid at economical compensation levels. Over the last five years, administrative costs of the SCAR Secretariat have been below 50% and salaries below 34% of base revenues. A downside to this frugality is that the Secretariat staff remains perpetually overcommitted and yet, to their credit, still meets most, if not all, demands. In addition, the SCAR President and Executive Committee provide extensive time at no cost to SCAR and often self-fund travel expenses. Changes in administrative procedures have been implemented to provide more effective management of funds. On-line automation of key Secretariat functions (reimbursement and abstract submissions) is expected to improve efficiency as well. I hope that you agree that SCAR is fortunate to have such a cost-effective and dedicated Secretariat and that they have done their part in ensuring optimum value for SCAR members' investment.
An equally important consideration is - what is the impact if membership fees are not increased? If there is no increase in revenues, allocations to core activities must be reduced to cover recurring and increasing operating costs. SSG and SRP funding has never reached levels originally envisioned in the re-structuring. Budgets have been reduced below requests for core activities since 2008 (see Figure 2). Budget projections for the next several years, based on current revenue levels, are provided and the following impacts are projected. Secretariat costs are mostly set by salaries and will remain essentially unchanged though discretionary administrative spending will be reduced. Projected cuts in core SCAR activity allocations are: Science reduced by 22%; Advice reduced by 17%; Capacity Building, Education & Training reduced by 35%; Meetings reduced by 18%; and other administrative costs (non-salary) reduced by 18%. Even with the proposed fee increase, not all of these reductions will be reversed. No increase in SCAR membership fees may result in some aspects of SCAR's mission being suspended for the foreseeable future (e.g., the Fellowship Program). As I mentioned in my last Note, in 2012 we will also consider approval of the next generation of SCAR Scientific Research Programs (SRPs). How many SRPs can be approved and at what funding levels will be dependent on available funds.
In the last decade, SCAR has made great strides in re-inventing itself and, in my opinion, has never been more relevant and/or valuable to the community that it serves and beyond. Reflective of this reinvigoration, the demands on SCAR's limited resources have also never been greater. I fully realize that many of you are facing similar financial pressures within your own countries. I hope that the information provided convinces you that SCAR is a great value for the modest monies invested. If recent momentum is to be maintained, the organization must be provided with adequate financial resources.
One last item:
A Straw Poll:
Please indicate (confidentially) your current national position on the recommendation that SCAR Membership Fees be increased by 20% in 2013 – If a vote were held today, how would you vote? Yes, No or Abstain (if undecided, please indicate the current status of discussions).
A clear indication of support or non-support for the fee increase will allow us to plan the best way forward.-
Chuck Kennicutt
President of SCAR
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