What's In Your Wallet?
A commentary on the Capital District's recent Bylaw amendment to increase annual dues
by Past Governor Tom Ganse
What you are about to read are my personal opinions and observations regarding the House of Delegates' recent approval of a dues increase for Capital District Kiwanis. Although I served on the Board of Directors, the Finance Committee, and the Dues Increase Task Force that brought this recommendation to the House, this commentary should not be construed as the opinions or official positions of those bodies. They are mine.
I believe it would be helpful to share a fictitious anecdote first, to help you fully appreciate the context of my later comments:
As the story goes, President George W. Bush is spending a few leisurely hours with the Pope, cruising the Potomac River on the Presidential yacht during the Pontiff's visit. Along comes a gust of wind and blows the Pope's skull cap into the river. In a panic the Pope's attending Cardinals scramble to dive into the river to rescue his hat. Quickly, George Bush jumps in front of them and halts them with an upraised hand.
"Ya'll just wait here" says the President. "I'll take care of this in a jiffy and be right back."
President Bush then climbs over the side of the yacht, walks over to the Pope's skull cap, picks it up, walks back over to the yacht, climbs in and, after knocking off a few remaining water drops, bows humbly and hands the hat back to the Pope.
Meanwhile, the invited reporters stand silently, their jaws agape because of what they just witnessed. As they come to their senses, they all scramble for their cell phones to call in this astounding story. And sure enough, shortly thereafter, there it was in every headline across the nation: "President Bush Cannot Swim".
So what does that have to do with our dues increase? Very simply, I continue to hear what sounds like the headline "Dues Increase Barely Passes", and I believe those "reporters" are missing the story of a lifetime because they focused on the wrong thing.
It is true that the absolute numeric difference in votes that carried the day was slim, but to focus on that is to miss the very reason it takes a two-thirds majority to pass a Bylaws amendment.
If a few votes made the percentage split 49.9 to 50.1, such a vote could pass a simple majority and essentially ignore the desires of half of the voting body. By requiring a two-thirds majority, even the difference of a single vote guarantees that those in support of the cause outnumber those against it by a margin of at least two to one.
In real terms, our recent dues increase was approved by nearly 70%, or seven out of every ten delegates. By voting standards, 55% marks a clear victory, 60% approaches "landslide" status, and 70% is perceived as a mandate.
With over 200 delegates absent and nearly one third of our clubs unrepresented, one could argue that support was even greater. Conventional wisdom tells us, if the unrepresented or under-represented clubs were strongly opposed, they would have ensured their attendance to vote against the amendment. One thing is for sure: Any Kiwanian who believes the recent dues increase was not widely supported by the vast majority of the Delegates will never have to worry about being mistaken for an Optimist.
However, the vote and the margin of victory is not what is at issue. The fact is, the amendment passed with nearly a 70% vote of confidence, and as a civilized society, we respect the will of the majority and abide by the rules of our organization.
The action before us now is not to take our footballs and go home if we did not side with the 70%, it is to stay committed to the winning team and become part of the solution. That means working with your District Leadership to make your clubs' needs known so the Board can craft the most effective, value-added budget to support your clubs' successes.
Approval to increase the District's revenue base is simply one more step down the road to fiscal strength in the Capital District. Before that step was taken, many other preparatory steps had to come first. Those included official fiscal policy via policy statements, and professional financial management of our strategic reserves, but the work of improving fiscal policy must continue.
We need to mitigate the chances of further dues increases, or at least increases of this magnitude. We need constant feedback from the end user - the clubs - regarding "what you get for your dues". None of your District Officers wants to spend a dime on anything that can't be tied to enhancing the Kiwanis experience for our members. Many a debate will rage regarding just what that means, but who knows better than our clubs and our members? You must be part of the solution moving forward, or you will be part of the problem.
Consider this: We know that this dues increases are driven primarily by inflation and a declining membership base. While Kiwanis dues increases could also be driven by an expansion of new services and expenses, but that has not been the case here in Capital.
If inflation averages three percent per year, what would happen if the District adopted a policy that required five percent of our annual dues revenue to be set aside in our strategic reserves? I think it is fair to say that we would never again need an inflation-driven dues increase, because we would have set aside money needed to account for that.
In real dollars, such a policy would set aside approximately $10,000 on a $200,000 budget each year. In theory, we would outpace inflation by two percent. However, by putting that money in our strategic reserve where it can earn more money, we would not only outpace inflation by a wider margin, we would create additional revenue that could be used to offset - at least to some degree - further revenue losses from declining membership.
The golden opportunity we now have is that the Delegates approved a dues increase that does more than simply make up lost ground and give us a gasp of air before we start losing ground again. Next year's income allows us to employ a reserve policy like the one described above and also make some focused investments in growth initiatives. Hopefully, everyone understands that the best long-term solution for preserving this District is to reverse the membership trend of the last two decades.
How could this money be used best to stimulate growth? I, for one, am not interested in doing more of the things that haven't been working for the last 20 years. Ribbons, banner patches and "kudo" lists haven't made the slightest dent in our rate of membership loss.
It's time for something different, and I challenge the Growth Team, the Finance Committee, and the Board of Directors to be bold, creative and innovative in identifying and implementing strategies to invest in growth.
What if the District issued a credit or financial incentive to clubs showing net growth; say maybe $25 per net member that remains on the roles into the next administrative year?
What if we adopted a tiered structure for dues, where young professionals or members with some established length of service were given a discount?
What if the District used some of the revenue to purchase advertising in areas targeted for growth; perhaps in communities identified as new club building sites?
What if Regional Growth Summits were institutionalized and the District fully paid for those costs?
What if we simply begin DOING things instead of finding reasons why an idea may not work? After all, there can be a hundred ways an idea can fail, but it only takes one reason for an idea to be a success.
Now I challenge you, the members and clubs of the Capital District. What matters most to you? What do you think the District can do to help halt the crippling membership losses and increase membership retention and gains?
Should the District put money in your admin accounts in the form of some financial incentives? Provide you with promotional materials, including advertising? Underwrite more expenses? Subsidize convention and conference expenses? Add more Lieutenant Governors? Get rid of more Lieutenant Governors?
We're all in this together. Please do your part.
The 92nd House of Delegates gave this District an historic opportunity to provide our dues-paying members with a sound and rewarding Kiwanis experience. They made it possible for this to be the last District dues increase we may ever have to consider:
IF the Board provides sound fiscal management,
IF the members hold the Board accountable for their management of District resources, and
If we focus these new resources in the areas that will yield the greatest return on investment, namely, increased member recruitment and increased retention.
The Delegates gave us their vote of confidence. Now it is time to earn it.
With a Kiwanis servant's heart,
Tom Ganse
