LNC: Upcoming budget increase requests

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From Wes Benedict on the Libertarian National Committee email list, September 1st, 2016 (includes August LP membership numbers):

Dear LNC:

I’d like to start a discussion about several budget increase requests before a formal motion is considered. I mentioned to the chair that I thought it would be good for me to put this before the LNC soon, and he agreed it was okay for me to get this discussion started on this list.

To me, all of these budget increase requests are the result of good news — our revenue, membership, and interest is very high, far higher than budgeted, and as a result, many of our expenses are higher as well.

More revenue and members means more membership cards and LP News to mail out, and bigger lists to send fundraising letter to.

The original 2016 Budget adopted for the entire year of 2016  was $1,474,561. My preliminary estimate for August 31, 2016 YTD revenue is $1,679,938 (July 2016 YTD) plus $412,425 (August 2016) = $2,092,363. It’s possible we could double the original revenue budgeted for the entire year (although I’m not ready to predict that).

Dues-paying membership has increased from 11,693 at the start of January to approximately 19,300 at the end of August.

The original budget for branding revenue was $35,000. We’ve already brought in $205,862 in branding revenue (that’s mostly the stuff we sell at LPStore.org).

Again, all of these increases in donations, memberships, and store orders, means higher postage, credit card processing fees, purchases of items offered at LPStore.org, office supplies, and some labor to help process all that stuff.

Robert Kraus and I have looked over the results of this year to date, considered what things could look like going forward, and are recommending that the LNC proposed and passes the following budget increases.

26-Brand Political Materials Revenue increase by $150,000 to $400,000
32-Fundraising Costs increase by $60,000 to $201,364
33-Membership Fundraising Costs increase by $35,000 to $127,200
40-Adminstrative Costs increase by $50,000 to $310,050
45-Compensation increase by $60,000 to $448,800
55-Brand Political Materials Expense increase by $150,000 to $400,000
85-Member Communication increase by $17,500 to $62,500

We have the revenue to pay for all of these budget increases. I’m pretty certain we have more money in the bank for the September of a Presidential election year than ever before in the history of the Libertarian Party, and that’s in spite of paying what it has taken to achieve 50 state ballot access for the first time since 2000.

While we are not technically over budget in most areas, we are trending in that direction and certainly will go way over budget by the end of the year unless I proactively cut back on fundraising letters, LP News, shipping LPStore.org materials, staff levels, and other areas. That could be done, but I don’t think it’s the right thing to do. For example, instead of focusing my time on trying to continue the growth of membership and fundraising by hiring another intern to fill boxes with campaign materials, I could spend my own time stuffing envelopes and filling boxes with yard signs–something I do actually enjoy and find to be therapeutic.

I’d be happy to try to respond to any questions you have on these items.

Thanks for your consideration. I’m hoping we have a productive discussion on this, and then the chair or treasurer can propose a motion that fits a consensus for you to consider of the Labor Day Weekend.

-- 
Wes Benedict, Executive Director
Libertarian National Committee, Inc.
1444 Duke St., Alexandria, VA 22314

 

8 thoughts on “LNC: Upcoming budget increase requests

  1. AMcCarrick

    “We have the revenue to pay for all of these budget increases. ” Until revenue plummets in two months when everybody puts the Prez election behind them and go back to their original parties. Horde the cash if you want to make it through the mid-term elections as a viable party.

  2. George Phillies

    Let me suggest we are doing this not the easy way. Budgeting “we need to buy more” is not the right way to go.

    The staff should be assigned an approximate dollar amount for inventory, directed to try to sell things at prices that yield a significant positive net return, directed to maintain inventory proportionate to sales, and to tell the LNC monthly what they are doing consistent with these efforts, what is being replaced at what cost, and how much money is being netted. I suspect Wes can tell us exactly how to do this.

    Also, all the Johnson stuff should be sold and not replaced on about October 15.

    Furthermore, instead of guessing how much to budget for renewals, go to autoallocate. For example:

    You pay your $25 in dues. Automatically, the needed amount for renewal letters goes into a renewal account, spent only on that. Ditto for the newsletter, the budget covers the (large) fixed cost; the per copy cost is handled by allocating part of dues.

  3. ATBAFT

    Worrying about the budget is all well and good. But I hope some LNCers are tasked with looking down the road several years to determine how to effectively protest the Clinton administration. It looks as if a small band of libertarians in Brazil were somewhat instrumental in triggering the mass protests against Dilma.
    Everyone predicts the Clinton administration will be awful – what will the LP do about it?

  4. Jim

    AMcCarrick ”Until revenue plummets in two months when everybody puts the Prez election behind them and go back to their original parties. Horde the cash if you want to make it through the mid-term elections as a viable party.”

    Presidential election years are always higher than the surrounding years, but the LNC hasn’t brought in less than $1 million since 1994. I don’t see that streak breaking in 2017.

  5. Steve m

    Ah think… George Phillies has it just about right,, from a marketing prospect. The LNC should first budget in the costs of the new members for the next year. Then the LNC should budget in what the cost is of retaining a new member for the next year. Then the LNC should budget in the cost of recruiting new members at a reasonable percentage based for example on increased voter registration.

    The rest go hog wild with.

  6. AMcCarrick

    Jim… If you say so… When there scrapping for cash in 8 months because they blow it all now and can’t even pay their mortgage, it’ll be game over.

  7. Steven Wilson

    In Business, political spending is treated like tourism in that it is seasonal. You expect to make X during the season. You preset a percentage (40%) of X that will be kept in reserve and invested in some safe fashion. If, for any reason, the tourism revenues decrease the following season, the funds held in reserve can then be used to sustain the business until the next season of tourism can confirm it is forecasted to meet the median of X.

    It is possible Gary Johnson may be a perennial LP Presidential candidate. He has yet to speak of other things like careers or hobbies or a lower office, so one would assume that he intends to build his own brand while riding the LP existing brand. After November, his handlers could contract speaking tours, another book based on centrist LP ideals, or even his own cable or radio show.

    I am not privy to the LP ledger so I do not know if they have a reserve account or operate under a bylaw that stipulates such an account has to exist. But the possibility of running into a deficit for next year based on a presidential year revenue is foolish and avoidable. This election cycle must be deemed a financial anomaly and treated as such.

    If this revenue trend continues for a few years, then set a new budget accordingly.

    Logic and reason are prerequisites of accounting and finance.

  8. Chuck Moulton

    Revenue neutral spending to increase the brand (such as yard signs, shirts, literature, etc. sold at cost while being mindful of inventory risk) is a good idea.

    My worry is the LNC will see $$$ and go hog wild on a big poorly thought out project just because it’s there. Our current surplus from increased membership (beyond the increased expenses to service those members) ought to in large part pay down the mortgage so the balloon payment won’t cripple us. The sooner we pay off the mortgage, the sooner we will have one less monthly expense we need to worry about forever, which will make future budgeting much easier.

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