Renee Zettle-Sterling, SNAG President

 2013 was a tough year for SNAG with the resignation of our Executive Director, Dana Singer and a financial crisis so severe that we were cash flow insolvent.  The Board and I had very serious talks about closing down our organization.  I want to be very clear when I say this was not a discussion that was entered into lightly.  Thankfully, we decided to roll up our sleeves, dig in, and start to put this organization on a path to financial sustainability.  Our first task was to raise enough money to cover our operating expenses.  Next, we needed to hire an Executive Director that had the tenacity and experience to help us and see us through the many strategic changes that would be necessary for a vibrant and healthy future.

We found this person in Gwynne Rukenbrod.  In a very short period of time, she began the process of helping us turn this organization around.  With her direction we are changing how conferences are produced, how we think about fundraising, developing a culture of giving and diversifying our revenue streams and sponsorships.  

We are cutting everywhere possible and are working towards a total overhaul of not only our  business model, but SNAG as a whole.  We are looking at every single expense that SNAG incurs.  There is no rock left unturned. We are all working incredibly hard.  For roughly 5 months the board has been having crisis meetings every week and we were in daily contact with the staff.  As of October we have been meeting every other week compared to the old model of quarterly calls.  I mention this not only because I want you to know we are trying, but I believe strongly that this constant flow of communication is a factor in moving us forward.  

I am also pleased to mention that thanks to the efforts of John Garbett and Anne Havel we have rebid Metalsmith's production costs and have managed to save $60,000. We are making wonderful and meaningful changes, but I also want to be absolutely clear that we will continue to struggle over the next 3-5 years as it will take some time to rebuild our equity.  This is partially due to the low attendance at this year's conference.  It has been a fantastic conference, no doubt about it, but we did not pull in the people that is needed to have a financially successful conference.  Recognizing this would be a major issue, the current board attempted to break our contract with this year's hotel.  We were unable to break this contract because of the outrageous fee we would have incurred--to the tune of $$156,961.00.  We had no other option other than to run this years conference and and make it the best conference we could, which I believe we have.   Even with our best efforts to get people to this year's conference and cutting everywhere we could, we will incur a sizable loss, but nothing compared to the cancellation fee.  This was a huge factor in the Board's decision to have conferences every other year and become more strategic about location, timing, and the way we produce our conferences.

The Board, the staff, Gwynne, our dedicated volunteers, and our generous donors have accomplished more than I thought possible.  I thank each and every one of you for your commitment to our organization and for your patience over the last year.  Change is hard for everyone and I hope that you will continue to be patient and remember that we are doing everything in our power to ensure that SNAG not only survives, but thrives.  We have a lot left to accomplish and will continue to work toward our goals. Please keep in mind, a crisis of this magnitude is not fixed immediately; it takes strategy, consistency, hard work, creativity, time and lots of love.

Happy Smithing,

Renee

Seth Godin defines a tribe as "any group of people, large or small, who are connected to one another through shared interests and ideas."  SNAG is a tribe of makers, artists, designers, metalsmiths, curators, writers, collectors, supporters and the curious.  Tribes are about faith - about a belief in an idea and in a community.  And they are grounded in respect and admiration for each other as members of the tribe. As we embark on this new chapter in the organization, it is time for our tribe to become energized to help us transform SNAG and seek something better, more sustainable and effective.

In order for SNAG to not just survive but thrive, we need institutional change.  Many fear change.  Fear of change is built into the nature of most organisms, because change is the first sign of risk.  But that fear is standing in our way toward creating a more sustainable future.

Let's throw out our fear, and embrace the change we have ahead of us and create a stronger, impassioned tribe of committed talented people who are spreading a message of empowerment, respect, and growth.  The tribe thrives, delivers value, and it creates lasting connections.

So, with that being said, I'd like to walk you through the process we are currently engaging in to create a stronger tribe.

In SNAG,

Gwynne

Anne Havel, Treasurer

Year end results December 31, 2013

I would like to highlight the major points related to our results for the year ended December 31, 2013.  Just as a point of information, an "income statement" for a not-for-profit is called a statement of activities. During the summer of 2013, as many of you know, SNAG hit a financial crisis.  We were within days of completely running out of cash.  The BOD had an emergency meeting, made immediate personal cash donations of around $8k and continued fundraising vigorously for the next few months.  We are

happy to report that those efforts yielded approximately $60k of unrestricted contributions.  Thank you to all of you that were able to help and thank you to the unrelenting and tireless efforts of the board, and especially our president, Renee Zettle-Sterling, who so rarely receives the thank you she so readily gives to so many others.

Our numbers are not final yet (our accounting firm will be coming in during May to work on issuing our financial statements), but we believe them to be accurate.  We are still technically insolvent as of December 31, 2013, but to a much lesser extent than last year. Our deficit is now only ($19,561), as compared to ($117,586) last year. Our change in net assets (earnings is the term most are familiar with) was $98,050, a vast improvement from last year's ($105,000) loss.

Our Toronto conference broke even, perhaps a very very small profit. Conference attendance was 781 compared to a conference attendance in Phoenix of 583, which generated a loss of approximately ($48k). I have reported that our breakeven attendance at a conference is 700, but our fixed costs have continued to rise and we did not make a profit despite the attendance over 700.  This is difficult to explain, but largely has to due with the change in personnel both in the executive director, conference manager, and advertising/production positions.  I hope to see this number stabilize now that 2014 will have the same personnel all year long.

We have once again implemented changes that will bear fruit as the next couple conferences unfold.  We have implemented a policy surrounding comps, as there were just too many at some of the last conferences, implemented the use of a strict conference budget, which is overseen by the ED and the treasurer, restructured the maximum speaker fees we will pay, taking some of the work that is performed by our conference planner in-house, have some of our employees and our fundraising committee involved with the sponsorships for the conference including an overhaul of that program, and the list does go on.

Metalsmith/digital Metalsmith provided $58K compared to $34K in 2012.  Advertising revenue has continued to decline-- $269k in 2012 and $231k in 2013.  however, our profitability has improved due to having John as our employee instead of paying an outside commission.  And, through John's major efforts and substantial knowledge of the publishing industry, we are on track to save approximately $60k in expense during 2014.  Metalsmith should become a powerhouse for helping to sustain SNAG.  If you see John, please thank him for all his very hard effort to help maintain this organization.  And, he is involved with helping us to create more lasting sponsorships!

Membership and subscription revenue increased by approximately $7k.

We received an emergency Windgate grant in august 2013 of $25k with a matching potential if we could raise an additional $25k by December 31.  as we announced in numerous places, we made the match right near the end and were able to obtain the match from Windgate of another $25k.

As our profitability was $98k and metalsmith contributed $58k of it, one can easily see that without the Windgate money and all those contributions, we would not have survived the year.  That is why the BOD is working feverishly to create a plan that will allow us to sustain ourselves through balanced sources including our program areas, grants, and contributions.

The bad news.  We are on track to lose substantial dollars from this conference.  We felt we had been conservative with our attendance numbers for the budget and we had trimmed countless thousands from the conference budget.  But, the paying attendance is about to be the lowest on record and it is just so low that we cannot overcome the loss of revenue from lack of attendance.  We have approximately 317 paying attendees and the lowest previous was Houston at 443.  We are basically about $70,000 down in revenue from attendance compared to budget (that's about 180 people) and we are looking at approximately a $65k of loss as of this writing.

We are currently cutting dollars from the budget to help mitigate this loss.  At this point we have identified approximately $ 50k  in cuts and savings, as well as additional revenue of approximately $20k.  This will hopefully offset the conference loss, putting as back at a break even for the year 2014.

I will explain the highlights in the balance sheet:

     --Cash and receivables are $56k higher than last year.  Although        

     receivables are $40k higher than last year, we subsequently collected 

     virtually all of it.

     --Payables were also $30k less, accounting for why we had less cash 

     than one might have expected, given our profitable year.

     --we went from a deficit in assets of ($118k) to a deficit of ($20k), 

     largely due to the grants and the unrestricted contributions everyone 

     made.

Budget for 2014

The budget was prepared based on paying attendance of 500 at the conference.  As mentioned above, we only have about 317 paying attendees and therefore expect a substantial loss.

We budgeted Metalsmith advertising revenue from all sources at $242K. John seems to be on track with that and it would seem we may save approximately $18k over and above the expense we budgeted, as we budgeted a $46k savings from last year.

We have projected membership and subscription revenue static from last year, as we have not seen any increase in membership or subscribers despite the changes we have made.  We thought we saw a small positive trend early last year, but it has not happened.  Because of issues with the back end of our web site, we are having trouble tracking this at this time, but hope to have it resolved in the near future.

I thank you for your time and patience and wish everyone the best.

Anne

Link to Treasurer's Powerpoint Here