APSA Investments

For the fiscal year ending June 30, 2005, APSA's audited financial statements, which also include the figures for operations, investments, endowed programs, and grant-funded activities, show an increase in total net assets of $372,411 for the fiscal year. This performance compares to an increase of $3.2 million in fiscal year 2004, and declines in total net assets of $763,433 and $3.2 million for fiscal years 2003 and 2002.

The gain in net assets in the current fiscal period was due chiefly to a favorable investment climate. The Association's overall financial position continues to be strong, with assets of over $26 million, a headquarters building and adjacent property that continue to appreciate in value, and a stable operating budget (please refer to Table 1 for the APSA Balance Sheet).

APSA's investment advisor, Cedarpoint Capital Management, Inc., reported that the value of the Trust and Development Fund investments (which include the Centennial Campaign and Award funds) earned 5.4% for the fiscal year, and the Congressional Fellowship Fund investments earned 8.0%. By way of comparison, the S&P 500 earned 6.3% for the same period. This strong investment performance for 2005 allowed APSA to continue our recovery from losses sustained in recent fiscal years. APSA's portfolios have historically outperformed the S&P 500 (please refer to Table 2 for more information on APSA's investment portfolio).

Overall, APSA ended fiscal year 2005 with assets of $26.1 million and liabilities of $3.6 million, resulting in a net worth of $22.5 million. Of this amount, $9.1 million is restricted as to its use and $13.4 million is unrestricted.

The net assets may also be viewed as keyed to the funds: $11.4 million in the Congressional Fellowship Program endowment; $4.1 million in Trust and Development; $4.6 million in Centennial Campaign; $2.1 million in general operating funds; and $1.1 million in Endowed Award funds (all at market value as of June 30, 2005).

Operations and Budget in Review: Fiscal Year 2004–2005

Several senior staff developments helped the Association meet programming goals last year. Michael Brintnall served his third full year as executive director. Under his guidance, three directors—Polly Karpowicz (Publications), Christina Marmor (Conventions), and Sean Twombly (Membership)—each performed well in their first full year at senior leadership positions. The overall staff, at every level, responded well to new responsibilities, as the Association pursued Council-directed projects to enhance APSA's public presence and international outreach.

In fact, this was a year of successful initiatives in several areas: APSA kicked off its fiscal year in July 2004 with the purchase of a townhouse office building adjacent to the Association headquarters. The 2004 Annual Meeting in Chicago was a hugely successful event. In February 2005, the APSA held its second Teaching and Learning Conference, with an expanded program and nearly 300 attendees.

The new APSA web site content management system was implemented to simplify staff updates to web content, extend content management to our external audiences, and support collaborative workspaces for committees and members. APSA's online resources—Annual Meeting programming, myAPSA, PROceedings, and departmental services—afforded APSA members expansive opportunities to enjoy direct access to and control of Association services and membership renewal.

In terms of earned revenue and program expenses, the outcome for the year was within budget expectations. APSA earned approximately $4.235 million in operating revenues and incurred operating expenses of $4.228 million. Actual operating revenue increased during this fiscal year by slightly more than $208,000 over the prior year, and expenses increased by less than $200,000. Realized operating revenue was just over budget by roughly $15,000, while total operating expense came in just under budget by $11,000.

In 2004–2005, APSA realized the benefit of the third full year of its journal publishing agreement with Cambridge University Press and the second full publication year of Perspectives on Politics. The Cambridge agreement effectively increased both revenue and expense for APSA by shifting the bulk of the publishing operation to the publisher.

Cambridge has direct responsibility for collection of institutional (library) dues, the sale of journal advertisements, and the management of royalties and permissions, as well as the PROceedings project and other electronic services. APSA receives a royalty, or share of the revenue that Cambridge brings in, from each of these areas. In addition, Cambridge provides funding for all three of the editorial offices (APSR, PS, and Perspectives on Politics). On the expense side, Cambridge is responsible for marketing, producing, printing, and distributing all three journals.

Under this arrangement, APSA was able to streamline its operations, reduce costs in several areas, and enhance capacity to establish a third journal, Perspectives on Politics, without having members bear additional expense.

Compared to the prior year, total revenue realized from individual membership dues during 2004–2005 decreased by less than 1%, due largely to a change in accounting that resulted in increased reported revenue in the prior year. In contrast to the small drop in dues revenue, APSA's individual membership actually increased slightly, up 26 members from July 2004 to June 2005, to a total of 14,723 members.

The cost to deliver key services in major program areas—journals, committees, departments, representation, Annual Meeting, Teaching and Learning Conference, Centennial Center, publications, organized sections, education and professional development, employment, and awards—increased by $187,933, or 6.4%, over the prior year. Supporting these major program areas, the costs for core operations (membership services, general administration, building and equipment, business office, and depreciation) increased by only $11,792, or 1% in 2004–2005 (please see Tables 3, 4, and 5 for multi-year comparisons).

APSA Operations in 2005–2006

The current fiscal year also promises many important achievements. The Council has enthusiastically endorsed a wide range of significant programs to serve APSA's members. These include initiatives on public presence, international membership, the Teaching and Learning Conference, and graduate education, among others.

For the current fiscal year, ending June 30, 2006, the operating budget anticipates revenues of $4.406 million and expenses of $4.395 million. The Council approved a modest dues increase that went into effect on July 1, 2005, for individual membership. This resulted in an increase of one dollar for students and increases ranging from two to six dollars for professional members. Student dues are now $38 per year; professional dues range from $80 (for those earning less than $40,000 per year) to $196 (for those earning more than $100,000). Please see Table 6 for a detailed comparison of fiscal year 2004–2005 revenue and expenses compared to the 2005–2006 budget.

The fiscal year 2005–2006 budget projects a revenue increase of 4.0% over the prior year and an increase in expenses of 3.9%. This stable budget forecasts that 34% of total revenue will come from individual memberships, 23% from the Annual Meeting, and 20% from journals, sales, and advertising revenue streams. The remaining 23% will derive from investments and administrative sources.

On the expense side of the ledger, costs for the three journals are expected to account for 17% of all operating expenses in fiscal year 2005–2006, followed by the Annual Meeting and Teaching and Learning Conference at 14%, committee programs at 12%, and building and equipment (including depreciation costs) at 9%. Each of the following programs will constitute 6% of operating costs: publications, web and sales, governance, business office, general administration, and member services. At 4% or less are costs related to departmental programs, organized sections, representation, education and professional development, employment services, the Centennial Center, program review, and endowed awards.