Date:19July 2010

To:BSA Council

From:Laura Galloway, Treasurer

The Botanical Society is in healthy financial condition. Income and expenses for the past year have been fairly close to the budgeted amounts. The largest share of income is from the American Journal of Botany; institutional subscriptions contribute almost two-thirds of the Society’s income. Grants formed our second largest source of income. Grants are nearly revenue neutral; however they help support the Society’s mission andits staff. The largest share of expenses supports BSA’s staff with its diverse functions;AJBcosts run about half of that amount. This past year has seen a rebound of the investment fund which had dropped in value due to the global financial situation.

Assets

As of 30 June 2010, assets in the Society’s investment accounts totaled just over $3.1M (Table 1), anincrease of approximately $380K or 14.1% in the past year. This increase represents a strong turnaround from the previous year which tallied a $600K decline due to global market conditions. The Investment Fund has regained 73% of its loss, but still is ~$500k below its peak in 2007. See the Investment Committee report for further details. The Investment Committee also altered the performance goal of the endowment to stipulate an 8.00% net rate of return, rather than the absolute rate of return that had been used in the past. The rationale for the change is that now fees and services are included in the goal rather than treated as a side change. This change was initiated (and reported) last year but formalized this year.

Table 1: Investment fund balances for the Botanical Society of America

Investment funds balance 30 June 2007 / $3,666,322
Investment funds balance 30 June 2009 / $2,724,682
Investment funds balance 30 June 2010 / $3,108,492

Income and expenses

The budget approved for 2009-2010 included budgeted income of $1.96M and budgeted expenses of $1.95M versuscurrent year-to-date totals of $1.48M and $1.10M, respectively (Table 2). Both the year-to-date income and expenses are slightly higher than budgeted and approximate last year’s figures at this time.

Budget for 2009-2010

Budgeted income is projected at $1.86M in 2010-2011 versus $1.6M in 2009-2010. The modest decrease reflects a reduction in expected grant income as several grants are nearing completion. This income also reflects a slight increase in funds expected from individual subscriptions to American Journal of Botany, a projected increase in contributions to the Society, and an increase in the institutional subscription rate of American Journal of Botany. AJB institutional rates will increase $40 this year to offset an increase in annual costs and no price increase in the previous year. Budgeted expenses are projected at $1.84M in 2010-2011versus $1.95M in 2009-2010. The drop in predicted expenditures largely reflects the drop in spending associated with grants. Expenses for employment and rent have increased but the St. Louis office is being run with increasing efficiency which represents a source of savings.

Table 2: Summary of income and expenses for the Botanical Society of America

Budgets / Budgeted / Actual / Budgeted / Increase/ / %
Budget Comparison / 2009-2010 / 2009-10 YTD* / 2010-2011 / Decrease / Change
Total Income / $1,963,648 / $1,475,883 / $1,855,968
Operational Income / 1,022,065 / 1,064,611 / 1,160,137 / 138,072 / 11.90%
Investment Income / 30,000 / -22,863 / 30,000 / 0
Meetings Income / 301,580 / 221,576 / 301,580 / 0
Grant Income / 610,003 / 212,559 / 364,251 / -245,752 / -67.47%
Total Expense / $1,949,265 / $1,103,425 / $1,837,434 / -111,831 / -6.09%
Operational Expense / 1,091,015 / 824,006 / 1,222,890 / 131,875 / 10.78%
Investment Expense / 30,000 / 35,532 / 30,000 / 0
Meetings Expense / 218,247 / 51,244 / 220,293 / 2,046 / 0.93%
Grant Expenses / 610,003 / 192,642 / 364,251 / -245,752 / -67.47%
Consolidated BSA Operations
Income / 1,022,065 / 1,064,611 / 1,160,137 / 138,072 / 11.90%
Expense / 1,019,728 / 824,006 / 1,149,439 / 129,711 / 11.28%
Balance / 2,337 / 240,605 / 10,697 / 8,360 / 78.15%
Botany Conference Series
Income / 301,580 / 221,576 / 301,580 / 0
Expense / 291,581 / 51,244 / 293,744 / 2,163 / 0.74%
Balance / 10,000 / 170,332 / 7,836 / -2,164 / -27.62%
BSA Grants
Income / 610,003 / 212,559 / 364,251 / -245,752 / -67.47%
Expense / 610,003 / 192,642 / 364,251 / -245,752 / -67.47%
Balance / 0 / 19,917 / 0 / 0
BSA Investment
Income / 30,000 / -22,863 / 30,000 / 0
Expense / 30,000 / 35,532 / 30,000 / 0
Balance / 0 / -58,395 / 0 / 0
TOTAL
Income / 1,963,648 / 1,526,997 / 1,855,967 / -107,681 / -5.80%
Expense / 1,951,311 / 1,124,279 / 1,837,434 / -113,877 / -6.20%
Balance / 12,337 / 402,718 / 18,534 / 6,197 / 33.44%
*as of 6/30/10