Association Rules — 210. Finance
210-1. Finance Committee
210-1.1 The Finance Committee shall be composed of seven voting members and up to seven non-voting members. Of the voting members, two shall be elected each year for terms of three years; one slate shall be limited to first-year and/or second-year members of Council and the second slate shall be limited to first-year and/or second-year Council members or former or outgoing members of the Finance Committee. No member may serve more than two consecutive terms. The seventh voting member of the Committee is the APA Treasurer, who shall serve as its Chair. The non-voting members shall be representatives from the investment community (up to four) and the accounting/financial community (up to three) and are not usually psychologists. The non-voting members will be recommended by the Finance Committee and appointed by the Board of Directors for terms of three years which may be renewed at the discretion of the Board.
Consistent with the mission of the Finance Committee set forth in Article XI, Section 3 of the APA Bylaws, the Finance Committee shall review and make recommendations on all new business and any old business coming before Council having financial implications that have not already been provided for in the budget. In addition, it is the responsibility of the Committee to (a) recommend overall investment strategy, including, but not limited to, amounts to be invested in equities, bonds, short-term holdings and real estate; (b) monitor the performance of the investment managers, if any; (c) research and develop alternative investments; (d) and advise the Treasurer and appropriate staff on investing funds not entrusted to an investment manager. It is also the responsibility of the Committee to (a) review audit scope and approach; (b) monitor issues raised during the audit and management letter; (c) understand the major components of the consolidated financial statements; (d) ensure compliance with legal and regulatory requirements; and, (e) monitor major financial risk exposures and steps taken to control such exposures.
210-2.1 In the financial policy of the APA, a distinction shall be made between general programs, direct service programs, and support functions.
General programs (e.g. scientific affairs, public affairs) shall be supported by the dues of the membership and by any surplus of income over expenses generated from the direct service programs. General programs do not render a direct service but rather are activities that are intended to benefit psychology as a whole.
A direct service program provides to individuals or organizations a product, benefit, or service for a fee. The financial goals for each current direct service program such as CE Credit Programs, Convention, Publications and Databases and Sponsor Approval shall be set annually by the Chief Executive Officer during the budget process.
These overall financial goals should be considered with APA’s commitment to providing programs and services that meet the changing priorities of the association.
Support functions comprise administrative or other services potentially used by all programs/offices of the Association, excluding common-use space and benefits which are direct charged. Support functions (e.g., human resources, administrative services) shall be conducted so that the total costs (including allocated costs) do not exceed 15% of the total gross expenses of the Association. The support functions shall have their net costs reallocated to program areas as indirect expense.
Financial plans shall be made with the aim of insuring that only necessary expenses shall be incurred in carrying out policies and programs approved by Council and that those expenses are consistent with the need to maintain a reasonable standard of performance. With respect to income, financial plans shall maximize income from all sources other than dues and shall support programs consistent with the basic objectives and professional standards of the APA. Membership dues shall be used essentially as a means for compensating for the difference between income and expenses resulting from Association programs. It shall be the goal to present a balanced budget annually (after consideration of the cash flow from building operations) and manage operations during the year to produce a positive operating margin over a rolling three-year period.
210-2.2 To achieve these goals, the chief executive officer (CEO) shall be responsible for developing the Association's annual budgets to be submitted to Council for approval. These budgets shall be reviewed, modified, and approved first by the Finance Committee and then the Board of Directors prior to submission to Council. All other boards and committees shall contribute to the development of these budgets through its staff liaison.
210-2.3 In order that this policy can be adequately carried out, the accounts of the APA shall be so maintained as to permit a matching of direct income and direct expenses plus allocated expenses by program. The annual budget shall be developed in such a way that the projected difference between income and expenses, by program, can be readily determined.
210-2.4 With respect to all budgets, the chief executive officer (CEO) shall strive to ensure that budgeted expenses are consistent with actual expenditures incurred and income realized during each budget year so that the budgeted "bottom line" is attained or improved upon.
210-2.10 Discretionary funds.
The Board of Directors and Council each shall have a discretionary fund to be used at their own discretion. Council shall be responsible for setting the discretionary fund limits. After APA Council and Board have adopted a budget, new unbudgeted expenditures to be made from their respective discretionary funds shall be approved as follows:
(a) If emerging from Council action, the proposed allocation from the Council discretionary fund shall require approval by a simple majority vote of the Council members voting.
(b) If emerging from Board action, the proposed allocation from the Board discretionary fund shall require approval by a two-thirds majority of Board members voting.
(c) If either action involves the support of a task force and/or ad hoc committee, the authorization would be for one year only and assigned to the appropriate office/program. If the mission of the task force or committee is to continue beyond one year, it must be reauthorized and funded on a year-to-year basis.
(d) All allocations other than those described in (c) will be sent to Council for review if authorized for an additional period of time.
A special discretionary fund will be allocated for presidential initiatives and must be spent during the first two years of the three-year cycle of each president. Council shall be responsible for setting the discretionary fund limit. The specific allocation of these funds shall be approved in advance by the Board of Directors.
The Finance Committee regularly shall review and recommend as appropriate limits to the discretionary funds which shall be reviewed by the Board of Directors and submitted to Council for approval.
210-3. Organizational Financial Health
On a continuing basis, the Association shall strive to maintain organizational financial health, which shall be measured as follows:
Short-term financial health.
Working Capital has been adopted as an industry-wide method of measuring short-term financial health.
Working Capital is defined as current assets* less current liabilities.**
The Association shall strive to maintain working capital equal to at least four months of operating expenses.
*Current Assets - Cash and other liquid assets (including investments) or resources commonly identified as those which are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business.
**Current Liabilities - Liabilities whose regular and ordinary liquidation is expected to occur within a relatively short period of time, usually twelve months.
Long-term financial health.
The Association shall strive to maintain long-term financial health. The long-term financial health of the Association will be measured/monitored in several ways:
Maintaining net assets equal to at least four months of operating expenses.
Acknowledging a conservative estimate of fair market value (FMV) of equity in buildings as a point of reference (Note: including FMV of building equity in net assets for such measures is not industry standard recognizing that access is limited to borrowing until point of sale.)
Maintaining Standard & Poor’s (S&P) Bond Rating BBB or higher.
Complying with debt covenants, as applicable.
Consistent with the mission of the Finance Committee set forth in Article XI, section 3 of the APA Bylaws, the Finance Committee shall work with the CEO and the CFO in the development of an annual financial forecast (up to five years) to be presented to Council annually. Based on the assessment of the forecast, the Finance Committee shall recommend to the Board of Directors and to the Council of Representatives overall long-range financial goals for the Association. Upon approval of these goals by Council, they shall serve as the basis on which boards, committees, and the CEO will proceed to develop plans and budgets to achieve these goals and to work toward the reserve requirements covered in Rule 210-3.
210-5.1 In preparing the annual budget, the Finance Committee shall recommend necessary changes in dues rates. The Finance Committee's recommendation will be reviewed by the Board of Directors and submitted to Council for approval.
210-5.2 The annual dues of Members, including Fellows, and Associate Members shall be determined by Council based on recommendations from the Membership Board, Finance Committee and Board of Directors. Dues amounts will be based on the following guideline:
Associate member Step 1 (years 1-3) 40% of regular Member dues.
Associate member Step 2 (years 4+) 72% of regular Member dues.
Member (Postdoctoral) Step 1 (years 1-3) 40% of regular Member dues.
Member (Postdoctoral) Step 2 (years 4-6) 60% of regular Member dues.
Member Step 3 (years 7 and 8) 80% of regular Member dues.
Member Step 4 (years 9+) 100% of regular Member dues.
Dues for Members and Associate members who have reached both 65 years of age and 25 years of membership, and have advised Central Office of their choice to begin the dues-reduction process, shall be based on the following schedule. At any step in the process where dues are less than the current subscription price/servicing fee, the latter shall prevail.
Step 1 (first year) – 90% of regular dues
Step 2 (second year) – 70% of regular dues
Step 3 (third year) – 50 % of regular dues
Step 4 (fourth year) – 30 % of regular dues
Step 5 (fifth year) – full dues exemption
When full dues exemption is attained, the subscription price/servicing fee option becomes available.
210-6. Canadian Psychological Association
210-6.1 A Fellow, Member, or Associate member residing in Canada, who also belongs to the Canadian Psychological Association (CPA) and pays full dues to that Association, is eligible for a reduction of 50% in his or her dues payable to the American Psychological Association. Conversely, a Fellow, Member, or Associate member who resides in the United States and also belongs to the Canadian Psychological Association and who pays full dues to APA is eligible for a 50% reduction in dues payable to CPA.
210-7.1 The Finance Committee shall be responsible for recommending the fees for the following categories: (a) Members; (b) late payment of dues; (c) International Affiliates; (d) High School Teacher Affiliates; (e) Student Affiliates; and (f) 2-Year College Teacher Affiliates.
210-8. Convention Registration Fees
210-8.1 The convention registration fees shall be set annually by the Board of Directors after recommendation from the Board of Convention Affairs. This shall normally be done no later than January of the year for which the fees are set. The fees should be set at levels consistent with the goals set forth for direct service programs covered in Rule 210-2.1.
210-9. Reduced Fees Status
210-0.1 Any Fellow, Member or Associate member may request reduced dues status by so indicating on the annual dues statement and submitting a written request to the Central Office.
There shall be an annual APA membership maintenance fee for reduced dues status, set by the Membership Board. This fee applies to APA dues and assessments. The fee will ordinarily be lower than full dues, with the amount to be determined by the Membership Board. Reduced dues status is limited to a total of five years and must be renewed annually, on the member dues statement. Those members requesting reduced dues status may continue to subscribe to APA journals, purchase APA books, and register for the annual convention at the member prices or rates.
210-10. Journal Subscription Prices
210-10.1 The APA's subscription prices for journals shall be set in such a way as to encourage the widest practicable distribution of high quality journals to individuals and institutions needing them. The prices shall be set consistent with the goals set forth for direct service programs covered in Rule 210-2.1. Costs to be recovered must include the direct costs to produce and service publications as well as a proportionate share of allocated expenses. In general, subscription prices will be set with a view toward fairness to subscribers, both members and non-members. Prices charged to members should normally be lower than the prices charged to non-members, but not necessarily in a fixed proportion. It is the responsibility of the Publications and Communications Board to anticipate the need for subscription price changes and recommend these to the Board of Directors for approval. The Board of Directors shall report its actions to Council.
210-10.2 The chief executive officer (CEO) may accept subscriptions at member rates from nonprofit scientific foundations for donation to foreign subscribers when such donations are in the best interest of the APA.
210-10.3 The chief executive officer (CEO) shall set prices for single issues, foreign subscriptions, back issues, and other publications as appropriate.
210-11. Subscriptions Included in Dues and Household Credit
210-11.1 Each member shall receive a subscription to the American Psychologist and the APA Monitor on Psychology.
If APA members reside in the same household, one member may claim the dues amount allocated for the American Psychologist and the APA Monitor on Psychology as a credit toward current year dues in lieu of receiving duplicate subscriptions to these periodicals.
Members exempt from dues under the provisions of Article XIX, Section 6 of the APA Bylaws may receive the American Psychologist and the APA Monitor on Psychology at a charge determined by Council and may subscribe to other APA journals at member rates.
210-12. Division Dues and Assessment
210-12.1 For each APA member, $2.00 of his or her regular dues shall be applied as dues of a division to which he or she belongs. If he or she is a member of more than one division, the dues shall be increased by $2.00 for each additional division. Divisions may vote to make special assessments beyond this minimum amount, to be collected as part of the APA dues or collected separately by the divisions. All divisions must inform the Central Office in writing of the amount of their special assessments for the next calendar year within five days following the APA convention each year.
If a division fails to inform the Central Office within five days, the special assessment that applied the previous year will remain in force.
210-13. Psychology Defense Fund
210-13.1 The Psychology Defense Fund shall operate in accordance with policy adopted by Council at its January 18-20, 1980, meeting and published in the June 1980 American Psychologist. The Council shall receive an annual report of grants awarded by the Fund.
210-14. Meetings of Committees and Boards and Reimbursement of Funds
210-14.1 All meetings of APA boards, committees, ad hoc committees, task forces and the like that are funded by APA will be held in the greater Washington, D.C., metropolitan area, unless there is a valid reason for holding the meetings in another city. This does not pertain to meetings held in cities at the time of the annual convention. A different location for a meeting requires the advance approval of the chief executive officer (CEO) or his or her designee. Except under unusual circumstances, APA does not pay travel or per diem expenses for board or committee meetings scheduled during the annual convention.
210-15. APA Treasurer
Areas of fiscal control under the supervision of the Treasurer include: (a) banking and investment of funds; (b) auditing, accounting, and the preparation of reports covering receipts and expenditures; (c) business management of publications, services, and properties of the APA; and (d) preparation of an annual budget including such schedules of personnel, salaries, rentals, contracts, and other major expenditures as may be desired by the Board of Directors.