Mike Meyer - Grants are clearly an option. Tw and I talked about that after your suggestion. One difficulty with grants is that they are generally time consuming to apply for and generally provide a one time lump of funds. Our current issue is ongoing operations and the need to balance cash going out with cash coming in. I usually recommend that not for profits avoid seeking grants to solve cash flow problems. It would be easy for us to get out of the model business and become a grant writing club, like many others I've worked with. Grants make much more sense for discrete projects, such as the bulletin board upgrade, or, ideally, something that could satisfy our purpose, such as a grant to facilitate setting us up in the manual printing and marketing business. Tw and I can investigate that alternative for a project such as the manuals business.
I'm not sure reducing the size of the Board is the most constructive direction. My recommendations to going concerns with paid staff are generally along the lines you pointed out. Five Board members are usually sufficient, as long as they are all active and contribute. Three is best for stressed situations requiring decisive action. Those figures work well when the Board are simply the governance function and a paid staff actually do all the leg work of making things happen. In our case, we do have a full time Club Manager (nod to Bernie) and a part time membership coordinator. They do the day to day work of answering the phones, receiving, recording and tracking membership renewals and applications, coordinating the Caterpillar relationship, and much of the legwork of event planning. Everything else is done by the nine Board members and the about dozen other volunteer members involved in management and operations.
Our problem isn't too many Board members, it is not enough participants in operations. A recurring theme in this discussion has been the perception that things are done behind closed doors by a bunch of good ole boys. If that is a concern now, it would be worse if we had five or three Board members doing everything. We don't have enough time or enough contributors of ideas as it is to help us turn things around. We need more help, not less.
tractor-doctor - Thank you for your comments, and your membership. They are good suggestions. I appreciate your recognition that we can't please everyone and that we do have many hardworking people contributing lots of time and money to making things better.
gauntjoh - I am glad that you are participating in this discussion. You bring a good background and helpful input to the overall discussion.
You commented that the Club functioned quite well without the models program. I'd encourage those of us who were around before the models program was started to think back to what the Club looked like at that time. The models program began in 2002, with the first significant sales in 2003. We had produce models before that date, but not in the manner and magnitude that we do now.
In 2002, total revenues were $168,000 with $64,000 of that from dues. We had $30,000 in shows revenue, $21,000 in model sales, $37,000 in technical services revenue (this is from assistance given to other Caterpillar licensees) and about $16,000 in sales of apparel, publications and other merchandise. We spent $57,000 of that money on models, merchandise and show production costs, and $46,000 on magazine production, printing and postage for total cost of goods sold of $103,000 and spent $38,000 on general and administrative costs for a net profit of $27,000. We also had cash reserves of $80,000, representing pretty much our only asset.
We had about 2,000 members, the magazine was a pretty thin, newsletter type publication issued four times per year. From my reading of it, editing was not a high priority. The website and bulletin board mostly worked, but had frequent, sometimes extended outage periods, lost data and discussions and was generally pretty frustrating.
The Club was profitable, but it was not creating as much value for the members as it does today. I believe that the added value because of the contributions of the models program are what cause our membership to grow by 50% between 2002 and 2013. I would contend that the Club did work without the model program, but I think, even during the period of economic correction, it works better with it than without it.
I think your point 1. is solidly worth considering, but to implement that, we've got to have a well defined plan to either reduce services and associated costs, and/or find another source of revenues to replace the models revenue before we can seriously consider that course. The relationship with Caterpillar is definitely a double edged sword, and we need to be always mindful of that.
I disagree with your point 2. If we were successful at extracting more money or resources from Caterpillar, Inc. to support the bulletin board or any other of our activities, that support would come with the expectation of additional influence and control by them. We already have too much of that involvement. The last thing I want is Caterpillar corporate trademarks and licensing people reviewing, editing and censoring everything that happens here. Some would be happy, because any off topic discussion would be promptly deleted, as I saw when I tried to include a John Deere tractor in one of our advertisements. I think no strings attached contributions and support from them is great, and I think we earn much more than we receive. Unfortunately, there are not many Caterpillar dollars that don't have those strings attached.
To point 3. we seek competitive bids for each magazine contract, which generally run for a year or eighteen months. B4D2 has been successful at receiving significant reductions in printing and production cost in each of the last three contract renewals, two of which were done prior to 2008 when costs were generally escalating pretty strongly. We also seek competitive bids for each unique printing and production project. We always have at least three qualified bidders for the significant projects. I'm pretty confident that we're getting value for the services received in the printing area, but we're always looking for help and other options in that area.
To point 4., we have, are and will be seeking any volunteers to edit the magazine. B4D2 has management responsibility for that relationship and he and his committee invest quite a bit of time editing, reviewing and generally quality checking the magazine. We have several members who have experience publishing and assembling products like our magazine, but so far, discussions with them have not led to an offer to take over our project. We would welcome anything that any member could do to help share the load and reduce operating costs.
Point 5. about considering the value of paid advertising is a good point. We raise about $600.00 per issue from advertising. All of the classified ads are free to members. We felt that the classified section is an important service to our members. We also look at the paid advertising as pretty much the same. We didn't want to charge nothing for all advertising, because the four color ads submitted incur more layout and publishing time than the simple classified ads. We didn't want to prohibit advertising other than the classifieds, because we felt that the color ads throughout the magazine are generally helpful and interesting to our members. I think if we eliminated all the paid ads, we might save somewhere between two and three pages of the magazine. That would either provide for more content, but the same cost, or let us reduce the magazine, only creating a small marginal reduction in our costs. Overall, we felt that we struck the right balance between rates, costs and benefits to the members at our current structure.