ANTHROPOSOPHICAL
SOCIETY IN
TREASURER’S REPORT
ACTUAL RESULTS FOR YEAR ENDED JUNE 30, 2005 and
BUDGET FOR YEAR ENDED June 30, 2006
To the members:
Here is a summary of our audited financial statement for 2005 and our budget for 2006. Throughout this memo, the tables show exact amounts, while the discussion rounds to the nearest thousand dollars.
Page 1 is the Statement of Financial Position showing what we own, what we owe, and the difference between the two, or “net assets”. The following table summarizes Page 1, including comparative columns for the last two years:
Statement of Financial
Position
|
|
Year ended June 30, 2005 |
Year ended June 30, 2004 |
Year ended June 30, 2003 |
|
|
|
|
|
|
Total
Assets |
1,513,125 |
1,397,593 |
1,395,477 |
|
Total
Liabilities |
(79,417) |
(83,851) |
(99,227) |
|
Net
Assets |
1,433,708 |
1,313,742 |
1,296,250 |
Total assets at June 30, 2005 included $1.1 million of cash and investments. Of this, $855,000 was available for discretionary use without any restriction by donors. Of this $855,000, $185,000 has been earmarked by the council for several funds including the Centering Fund and the New Initiatives Fund. After subtraction of these earmarked funds, $670,000 of discretionary cash remains. Liabilities are low, at only $79,000. With high discretionary cash balances and low liabilities; we have a strong, liquid financial position.
Page 2 is the Statement of Activities showing how we did during the year. It is summarized as follows, again with columns for the two previous years:
Statement of Activities
|
|
Year ended June 30, 2005 |
Year ended June 30, 2004 |
Year ended June 30, 2003 |
|
|
|
|
|
|
Core
Income |
530,904 |
529,688 |
558,320 |
|
Core
Expense |
(579,544) |
(535,863) |
(515,681) |
|
Net
Core Income |
(48,640) |
(6,175) |
42,639 |
|
|
|
|
|
|
Bequests |
183,527 |
0 |
0 |
|
Investment |
16,857 |
26,833 |
(26,800) |
|
Activities |
(32,821) |
(12,446) |
(4,604) |
|
Other |
1,043 |
(6,089) |
2,147 |
|
|
|
|
|
|
Change
in net assets |
119,966 |
2,123 |
13,382 |
Core activities are those that are essential to perform the basic functions of the Society. Income is mostly in the form of dues and contributions. Expenses include member services, regions/groups/branches, the library, publications, the School of Spiritual Science, and support for the Goetheanum.
In the most recent year, we took in $531,000 of core income and spent $580,000 of core expenses, leaving a $49,000 net deficit. The deficit is higher than in 2004 for the following reasons: during the year we experienced essentially flat income from dues and contributions accompanied by a $44,000 increase in operating expenses, in the School for Spiritual Science and in member services. The higher core deficit was more than offset by $184,000 of bequest income during the year.
Investment represents interest earnings on investments and the increase or decline in the value of investments. The number is negative in 2003 because of declines in the stock market. Last year the council decided to divest stocks to avoid further declines. Investment income in 2004 and 2005 primarily reflects interest earnings.
The change in net assets for the year (our net income) was $120,000, compared to $2,000 last year. This results entirely from bequests, without which the Society would have had a deficit of $64,000.
For the 2005-06 year, the council has approved a budget that is summarized in the table below. The table includes a comparative column showing actual results last year (a repeat of the 2004-05 figures in the table above):
Statement of Activities –
Actual and Budget
|
|
Year ended June 30, 2006 Budget |
Year ended June 30, 2005 Actual |
|
|
|
|
|
Core
Income |
524,880 |
530,904 |
|
Core
Expense |
(622,932) |
(579,544) |
|
Net
Core Income |
(98,052) |
(48,640) |
|
|
|
|
|
Bequests |
0 |
183,527 |
|
Investment |
15,000 |
16,857 |
|
Activities |
(8,800) |
(32,821) |
|
Other |
0 |
1,043 |
|
|
|
|
|
Change
in net assets |
(91,852) |
119,966 |
The significant
changes from last year to this year are as follows:
·
Core
expenses are $43,000 higher. The core expense increase occurs primarily in the
library. In recent years, the library
has been successful in fundraising to cover its cost. However, contributions have declined and the
library requires more funding from the society.
The Society budgets to subsidize the library regardless of its
fundraising success. In 2005 fundraising
is expected to produce $9,000 less income, and costs, principally insurance,
are expected to increase by $17,000. All
of the Society’s insurance costs, including those associated with the library,
are under review now, and we may be able to hold down increases.
In addition, a $25,000 restricted donation was used in 2005 to defray
the cost of stipends to the General Secretaries; in the forthcoming year that
income will not occur.
·
Activities
are forecasted to show a deficit lower by $24,000, largely because legal and
conference expenses will be lower.
· Because it is unpredictable, no bequest income is forecast.
To conclude:
Increases in expense are not the result of major new initiatives but a realistic assessment of the cost of running the Society sustainably.
We are solvent and have the resources to sustain deficits for several years. And, in 2005 we were fortunate to receive substantial bequest income that produced a surplus for the year despite a structural operating deficit. We are grateful, but we cannot rely on bequest income. The existence of structural operating deficits, even at a “bare-minimum” level of operations, suggests the need for new and sustainable financial support if the society is to thrive.
John Haenselman
October 14, 2005