January 2020 Community Update, Finance and Operations
January 2020 Community Update, Finance and Operations
January 2020 Community Update, Finance and Operations

Dear AIGA community,

Reflecting on a year of unprecedented change and reengagement with our community, I’m pleased to report that we've made substantive progress on restoring the health and mission of AIGA. We recognize our reinvention process has been disruptive, and with this acknowledgement, we greatly appreciate your commitment and patience. I would hope the details shared in this communique will provide a level of reassurance and confidence that we’re moving in the right direction.

A recap of our 2019 fiscal year

Over the past 18 months, the board and our national team have been focused on correcting pressing issues regarding our organizational model—making immediate leadership adjustments, strategically aligning our operating structure and investments, and implementing essential governance and community support structures. 

Over this time period, we've reduced our deficit spending by approximately $1.9 million dollars, taken a portion of our staff remote, and conducted on-the-ground chapter engagement and research to better understand our problems in support of sharpening our focus on the right opportunities. 

Core to this transformation is the 7-point action plan we shared with you in our last Community Update. Here’s a reiteration of those work streams:

  1. Implementation of a more efficient national operating structure 
  2. Realignment and streamlining our staff structure (including exiting our national headquarters)
  3. Implementation of board and chapter reforms that set the stage for the appointment of a new executive director and a renewed path forward for our task forces
  4. Dedication to financial transparency and reporting
  5. Purpose-driven governance and financial planning at the national board level (36 month deficit reduction and balanced budget plan)
  6. Installation of new best practices that will help us conduct business better
  7. Engaging our chapters in the co-design of a new community-driven vision

There’s still work to do, but I’m pleased to say we’re showing steady progress and delivering on these priorities and others.


New leadership and a renewed vision

On the heels of these transformation efforts, we begin our fiscal year with the exciting hire and installment of AIGA’s new executive director, Bennie F. Johnson. In Bennie, we welcome a leader with significant nonprofit experience, requisite business skills, and a passion for community building. His credentials are further complemented by a track record steeped in design innovation and member-centric delivery of enhanced products and services. We look forward to rolling up our sleeves with Bennie and delivering the type of value and integrated approaches that are so essential to AIGA’s future. I invite you to read more about Bennie in our recent announcement.

Looking ahead, we expect these efforts to contribute to richer experiences, tangible member value, and more meaningful outcomes for everyone. Most notably, the co-creation of our national vision with leaders from our 74 chapters has been a galvanizing force and clarifying blueprint for our future. By embracing the power and impact of design that our members bring to our network of communities, we’ll find common ground and make a bold difference together.


Answers to common questions related to AIGA’s finances (AIGA financial snapshot at-a-glance)

Q: What is the role of the board in oversight of AIGA’s finances, and what is the process for financial review?

All financial statements, budgets, actual and forecasted financials are reviewed by the finance committee of the national board of directors. The finance committee is comprised of the Board President, Treasurer, CFO, and additional National Board Members. Following review by the finance committee, the board of directors votes to approve all financials. Each financial statement follows a specific process, as outlined below. 

Audited Full Year Financial Statements

  • AIGA outside auditing team presents a draft of the full year audited financial statements to the board finance committee, and subsequently to the full board of directors.

  • The board of directors acknowledges receipt for review of the audited financial statements.

Annual Budget

  • The CFO presents the annual budget in detail to the board finance committee.

  • The finance committee reviews the detailed budget, and recommends any revisions they feel necessary to ensure the budget reflects the organization's strategy.

  • The CFO works with staff to make any revisions necessary, and the board finance committee approves the final budget.

  • The board finance committee recommends the approved budget to the full board of directors

  • The board of directors votes to approve the annual budget.

Quarterly Actual Results

  • The CFO presents detailed actual Profit & Loss (P&L) results to the board finance committee on a quarterly basis.

  • P&L variances to prior year and to budget are discussed, as well as the effect on reserve balances.

Forecasted Results

  • Starting in the second fiscal quarter, the CFO presents the board finance committee with a detailed P&L forecast as well as a reserve forecast.

  • P&L variances to prior year and budget are discussed, as well as the effect on reserve balances.

Q: What events led to AIGA’s current financial situation?

A: Beginning in 2015, AIGA membership began to decline, significantly decreasing organizational revenue, and our industry was quickly moving in new directions. These issues prompted the organization to make a number of business decisions, including increasing new business development efforts and programmatic investments. These efforts were intended to stimulate revenue growth and reverse the tide. While some of these decisions and actions yielded positive results, a disproportionate number of these efforts and the cost associated with them, only exasperated AIGA’s fiscal position. The results of these circumstances led the board to take substantive operational and fiscal turnaround actions which began in 2018.

Q: What specific measures has AIGA taken to address budget shortfalls? 

A: In response to declines in revenue and corresponding increases in expenses that led to net operating deficits in recent years, a number of actions were taken by the national board. 

These actions include, but are not limited to:

  • Securing a third-party financial and operations audit, which was concluded with recommendations for the board in 2018
  • New financial and operational controls put in place leading to more transparent review by AIGA’s outside auditors
  • Standing up board committees including a Finance Committee responsible for reviewing financial data on a regular basis in advance of board meetings
  • Securing a new general counsel
  • With general counsel, revision to AIGA’s constitution and bylaws to bring the financial controls into accordance with association best practice
  • Review of AIGA’s investment strategy and transition to a new investment advisor
  • Subleasing AIGA’s costly office space in Manhattan and shifting to a partial and fully-remote staffing model in 2019
  • Board approval of a “rolling” budget as part of a 36-month plan to achieve a balanced budget in fiscal year 2022
  • Hiring a new executive director following an intensive 6-month search process led by a board search committee in coordination with Nonprofit HR

During this time of financial remediation, the board also made the difficult decision to freeze events-related program spending beyond its previous commitments. This decision provided time to evaluate programs to ensure alignment with AIGA’s strategic direction. 

Going forward AIGA will continue to control costs and invest in sustainable programs and initiatives to grow membership and non-dues revenue. These efforts have already translated to $1.9 million dollars in reduced expenses in the last 12 months. As these important efforts proceed, our budget strategy will increasingly focus on providing member value generated from community-driven benefits and programs and non-dues revenue opportunities.

Q: Following AIGA’s building sale in 2014, how has the organization’s national office space and staffing model evolved?

A: Following the sale of AIGA’s national headquarters in 2014, the organization entered into a 10-year lease on an office space in downtown Manhattan and relocated staff in 2015. To promote a more distributed national staffing model while reducing costs, the board took the action in 2019 to sublease the office for the remaining six years. In July 2019 national staff residing in the New York metro area began to work remotely on a rotating schedule with some days spent at a shared co-working space. Today, due to the recent introduction of remote employment opportunities at AIGA, 20% of the organization’s national staff live outside of New York.

Q: How were the proceeds from AIGA’s building sale in 2014 invested or spent?

A: A portion of the proceeds from the sale of AIGA’s building were used to lease and renovate a new office space in New York City with the remaining portion put into reserves with the intention of using the investment income to fund future growth. Between 2015 and 2018, AIGA invested in new programs and ventures, the net revenue from many of which never materialized. That, coupled with a steady decline in membership numbers, and consequently a decline in membership dues revenue, put AIGA in the unfortunate position of relying on reserves to fund operations. This practice, which began in 2016, has steadily drawn down AIGA reserves.

Q: What is the balance of AIGA’s reserves and how are they invested and managed?

A: As of January 27, 2020 AIGA’s reserves totalled $8.6 million. Recently, a detailed review of our investments, allocation, and financial investment plan was conducted. As a result, the finance and governance committee, CFO and legal counsel established new oversight practices. As a result, a new investment and advisory firm has been engaged, Morgan Stanley. The Board has realigned AIGA’s asset allocation to be in line with best practices for an association with reserves and needs of our size. This will help us manage and safeguard AIGA assets while still allowing for more measurable returns and growth.

Q: What are AIGA’s biggest revenue sources?

A: AIGA’s largest source of revenue continues to be from membership dues, followed by registration fees and sponsorships.

Q: Where can I see a list of AIGA’s staff and how to contact them?

A: All national staff members along with their contact info can be found here.


We look forward to building on the momentum of this past year as we continue to serve you. Thanks to your support and commitment, AIGA can lead and demonstrate the greater value of design in our world.

Thank you,

Dana Arnett, President of the National Board of Directors