State of AORN

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State of AORN
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Report to the Associations Leaders On How the
Economy is Impacting AORN and the Assessment of
Membership Dues
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State of AORNs Finances
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State of AORNs Finances
AORN Inc. Oper Inc, Non-Oper Net Income (2008)

• Unlike prior year, where 200K operating loss
  was offset with positive income from
• investments, 2008 investments generated
  significant losses.
• Impact equates to a 1.6M net loss for 2008

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State of AORNs Finances
AORN Inc. - Reserves

• 2008, Reserves decreased by 3.3M due to the
  following
• Stock market dropped 39 (AORN dropped 27)
  1.5M drop in reserves
• Invested 0.2M in CEs On-line
• Invested 0.2M in CBL
• Invested 0.4M in RPs On-line
• Invested 0.9M in Syntegrity (formerly SPR)

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State of AORNs Finances

• Based on the impact of the economy, at the
  January 2009 Board of Directors Meeting, the
  following was approved
• Moved investments from stocks, to bonds and
  money market
• No merit increases, incentives and 401K
  matching reduced
• Delayed capital projects
• Prioritization of unfilled positions
• Reduced travel, marketing and other expenses
• Recommended to review new financing options

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State of AORNs Finances

• After Congress, Management Noted the Following at
  the May 2009 Board of Directors Meeting
• Congress (200K earnings shortfall)
• Lower attendees - less funding f/facilities
  lower disposal inc
• Lower industry sales tighter budgets from
  companies
• Books (380K earnings shortfall by year-end)
• Congress bookstore dropped 50 from 2008
• Less purchase of books tighter budgets
• Membership
• Declining due to less funding f/facilities
  lower disposable income
• Four consecutive months of decline (first time
  in many years)
• Career Center Ads are lower due to less open
  jobs.

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State of AORNs Finances

• After Congress, Management Noted the Following at
  the May 2009 Board of Directors Meeting
• Remaining Face to Face Events (300K shortfall)
• Lower registration and sponsorships
• Due to tighter budgets for individuals,
  facilities and industry
• Total impact of the above forecast was 1.2M
  expected loss by 12/31/09

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State of AORNs Finances

• Based on the forecasted 1.2M loss, the Board
  approved the following changes at the May 2009
  Meeting
• Identified 1.0M in earnings improvement
• 150K in revenues (Periop 101, Journal CEs,
  pricing)
• 850K in expenses
• Reduction in force (12 FTEs)
• Did not replace open positions
• Reduced staffs professional development
• Reduced travel for staff, committees and board
• Reduced marketing expenses

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Cost of AORN Services
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Expenses (compensation, travel, lobbiyst,
marketing other)

• Member Services Related Costs
• Membership 961,735
• Customer Service 263,606
• Government Affairs 485,192
• Library 375,861
• Nursing Practice 811,602
• Committees BoD 367,331
• Total 3,265,327

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Contact Approval Process

• Costs of services 125,000
• Offset with chapter fees (30,000)
• Net Costs 95,000
  

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Connections

• Cost to produce 212,961
• Funding from industry (135,057)
• Net Cost 77,904

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Manager Connections

• Cost to produce 93,668
• Funding from industry (34,121)
• Net Cost 59,547

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Total Direct Cost of Services to Members

• Member services 3,265,327
• Contact approval 95,000
• Connections 77,904
• Manager Connections 59,547
• Total Cost of Services 3,497,778

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Total Overhead

• Overhead
• Legal/Consulting
• Accounting/auditing
• Human Resources
• Executives
• Facility management
• Total Overhead 6,059,677

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Allocated Overhead
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Membership Dues Key Facts

• Current Membership Rate 100
• Rebate Given to Chapters 20
• Dues Retained by National 80
• Last Date of Dues Increase 2003
• (from 85 to 100)
• of Members at 12/31/08 42,325
• 2008 Revenues from Dues 3,386,000
• 2009 Forecasted Dues 3,309,706
• - 2005, Member Access decreased/increased
  chapter dues to be a standard 20 however,
  national did not receive an increase

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Deficit Including Overhead
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Congress Proposal
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Proposed Membership Dues Increase
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Annual Dues If Kept Pace with Inflation and
Services Provided
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