From the CEO
The findings from APA's most recent "Stress in America Report" are no surprise: Almost half of all Americans say that they are increasingly stressed about their ability to provide for their families' basic needs. Eight out of 10 say that the economy is a significant cause of stress, up from 66 percent in April. (See "Money is the top stressor for Americans.")
Psychologists of course are not immune to the current economic crisis. Many of our practitioner members report that more clients are coming to see them and that the first topic people want to discuss is their finances. Practitioners worry, however, that those visits will stop if the economy worsens and clients can no longer afford those visits. Meanwhile, our scientist and academic members are wondering how the economic downturn could undermine their research and teaching budgets. (The January Monitor will include a more detailed report on how the new economy is affecting the field.)
Our association is also feeling the pinch. The value of our investment portfolio has declined along with the broader market. Sales of APA books and electronic products may be fewer as state and university budgets are cut. Advertisers may cut back on the amount of advertising in our publications. Association operating costs such as travel, utilities and paper are becoming more expensive.
In response, APA has taken a number of steps to reduce its expenses for 2008. As a result, our deficit is likely to be less than the $937,000 reported to the Council of Representatives at its August meeting.
But for 2009, which has a budget of $115.8 million, further measures are needed to address a forecasted $4.9 million deficit. At this point, governance and staff must take urgent action to avoid deficits next year. To start, we are proposing to pause the growth of certain expenditures to slow the rate of the association's growth so that it more closely reflects anticipated revenues.
The proposed pause has two components. First, we will control the growth of APA staff. Our plan is to temporarily curtail the expansion of new staff positions, strictly limiting recruitment for open positions. Second, we are proposing to limit the growth of certain APA activities (but not member benefits) and rethink some of the initiatives tentatively approved by Council in August and those currently under way. Simply put, a pause in the growth in staff requires a corresponding pause in the growth of activities (i.e., the workload). Otherwise, the workload on existing staff will increase to unsustainable levels.
To implement this approach, staff will develop a list of activities and planned hires that might be paused for 2009 and potentially beyond. This list will then be discussed by APA's Finance Committee and the Board of Directors, which will send recommendations to the Council of Representatives to consider at its February meeting.
Thus, this approach is a collaborative effort of staff and governance, which we believe will better align our expenditures with our revenue, give the association's investment portfolio time to rebound as the general market recovers, and allow time to alter our approach to budgeting in this new financial era. I believe that implementing this plan will help ensure APA will continue to accomplish its mission and serve its members even in such a tough financial time.
In conclusion, it is important to note that APA has a depth of financial resources and is looking strategically at planning for the future. For example, our real estate holdings in Washington, D.C., continue to produce an annual profit, which makes the buildings self-supporting and helps support APA activities.
In addition, our strategic planning activities currently under way provide us with a timely opportunity to re-evaluate our mission, set new and exciting goals and objectives for the association, and ensure that our budget is aligned with those goals and objectives. APA's Council of Representatives will continue its deliberations on our first strategic plan in February.
More on that soon.
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