AAPS continues to implement its strategic plan and vision, assisting pharmaceutical scientists by advancing science, careers, and community.
By Christopher R. McCurdy, Ph.D., FAAPS, President; and William E. Weiser, Ph.D., Treasurer
Once a year, we take this space to update members on our financial status and gauge the overall fiscal health of the organization. We are dedicating this column to a review of our 2017 financial accomplishments and an assessment of our financial health as we continue our journey toward our strategic vision, advancing the capacity of pharmaceutical scientists.
Adopted in 2015, our strategic vision lays out a plan for the American Association of Pharmaceutical Scientists (AAPS) to remain the premier organization of pharmaceutical scientists. During 2016, we conducted extensive research and developed operational plans to implement our new vision and better meet the needs of members. In 2017 more than $1 million was invested to transform the organizational culture and structure of AAPS to one of continuous learning and improvement that benefits members with highly relevant products and services. Our investments have focused on three areas:
- Continued market research to better understand and deliver on our members’ career needs
- Promotion assistance to better communicate our membership value and our products, services, and activities
- Modernization of the organization’s technology devoted to serving its members
Last fall, AAPS launched a new website and a new community site as part of its technology modernization efforts. These new platforms are designed to improve members’ and customers’ ability to interact with AAPS and each other. All members are strongly encouraged to visit the communities and see what your colleagues are discussing or find out about exciting volunteer opportunities! Further enhancements and content expansion will continue throughout 2018.
Many new features were added to our recent annual meeting in San Diego, designed to enhance the 6,300 participants’ experience. Poster forums provided a more informal and relaxed exchange between poster authors and participants. Digital posters offered more terminals, better functionality, and improved organization around scientific topics.
Staff and the Scientific Programming Committee are already hard at work designing PharmSci 360 in Washington, D.C. Expect exciting new features and programming redesigns that will deliver outstanding science, career advancement, and community-building opportunities. Committee members, the executive council, and staff, working with an outside consulting firm, recently concluded a research project designed to identify the hidden weaknesses and strengths of our annual event and to refine the strategies and plans for PharmSci 360 at every level, from the structure of the scientific sessions (covering both chemical and biological entities) to the learning and interactions that happen in the Solution Center. Many programmatic enhancements are planned for this event, which promises to be a positive, rave-worthy experience!
AAPS’ new member database launched in December 2016 has led to improved communications and transaction processing between members and the organization. Through the database, AAPS also collects and manages more information about members’ interests and their roles in drug development so that we send members information that is customized to their needs, and AAPS better understands who it serves.
AAPS is committed to ongoing research to stay abreast of our members’ needs and goals. Feedback from recent research emphasizes the need for AAPS to provide products and programs that support scientists in several distinct career stages, work environments, and stages of drug development. The organization is committed to doing just that in 2018 and beyond.
The AAPS Executive Council, Audit Committee, and staff remain committed to providing strong financial stewardship aimed at securing the organization’s long-term ability to serve our members, our constituents, and the public.
Please stay tuned. I promise to keep you posted on our progress! AAPS Treasurer William E. Weiser, Ph.D., leads our financial stewardship efforts, and he provides the following financial review.
2017 FISCAL YEAR RECAP
For the year 2017, AAPS reported an operating deficit of $371,000, slightly better than the organization’s budgeted deficit of $406,000. Investment reserve returns continue to be an important source of financial support totaling $1.4 million for the year or 8.5 percent.
Since 2015, more than $2 million has been invested in operational enhancements designed to improve member value and heighten the attendee experience at its various educational venues. The executive council expects these investments to translate to higher membership and meeting registration levels in 2018 and beyond. It is our goal over the next three to five years to see AAPS’ annual financial operating budget become less reliant on investment reserve returns for support.
Our investment reserves stand at more than $19 million as of September 30, 2017, and continue to represent our most important resource in supporting our new strategic vision, and in offering protection against unforeseen or unexpected negative events.
The AAPS Annual Meeting and Exposition and workshops continue to generate the most revenue, approximately 75 percent of noninvestment return revenue. Registration fees provided $3.2 million collectively from our various events. Likewise, exhibitor fees contributed $3.1 million for the year. We expect recent structural changes to our annual event format and program content to continue.
Advertising income and royalties relating to our publications added $1.1 million in revenue. AAPS is exploring initiatives to continue improving the quality of its various print and electronic publications, as well as efforts to increase readership in a cost-effective manner.
For the first time since 2008, AAPS membership is up year over year. As of September 30, 2017, total membership stood at 8,987, up 10 percent over the prior year. Membership dues revenue totaled $1 million for the year. By the fourth quarter, our retention rate for regular members exceeded 80 percent. We expect recent investments in membership-related engagement and technologies will drive our membership levels higher in 2018 and beyond.
Figure 1 provides a breakdown of our sources of revenue for FY 2017. Registration and exhibit fees relating to the AAPS Annual Meeting and Exposition, the National Biotechnology Conference, and our workshops accounted for 70 percent of our annual revenue.
Figure 2 provides a functional breakdown of our expenses for FY 2017—program versus general and administrative expenses. As you will note, 82 percent of our expenditures were directly tied to our various member service offerings or programmatic categories. That is, 82 cents of every dollar expended in FY 2017 directly support member products or services.
AAPS continues to manage our financial resources very carefully in alignment with our strategic goals. Our revenue excluding investment income declined about 11 percent from 2016 to 2017; however, because we continued to invest in member services and our meeting experiences as described above, we maintained our expense level about the same over these two years. Our investment income and prudent use of our reserves consistent with our established reserve policies compensated for this shortfall. For our current financial year (2018), we are both managing our expenses very tightly and increasing our emphasis on revenue-generating opportunities such as additional workshops and corporate sponsorships. These efforts will help minimize the impact on our financial reserves while maintaining our momentum for investment in the future.
Finally, I want to thank our financial staff, who continue to maintain high standards in reporting our financial results. Once again, our outside audit firm Tate & Tryon provided us the desirable unqualified audit opinion, evidence of accurate financial reporting and a sound internal control environment.