Editor’s Note: This is the latest in an occasional series of articles examining the International Bluegrass Music Association’s finances.
IBMA’s expenses exceeded revenues for the sixth straight year in 2011, according to a statement of financial condition the group released Tuesday. The $32,098 deficit was twice the amount of red ink IBMA reported for 2010, but still represented the second-lowest shortfall since the annual budget was last balanced in 2005.
IBMA has covered the annual losses with money from its reserve fund, which has dropped by more than half since the start of 2006, from $608,000 to about $270,000.
In a statement that accompanied the financial report, the group said board members and staffers “are working toward the goal of a balanced budget for 2012.” IBMA President Stan Zdonik told Bluegrass Today that the effort would include a combination of cost-cutting steps and revenue-generating initiatives, including a targeted membership campaign.
He previously said improving IBMA’s finances “will be the driving criterion in all of IBMA’s decision-making until we are again running in the black.”
The financial report reflects some good news about efforts to stem the annual losses, but also hints at some of the challenges ahead.
For instance, IBMA continues to slash expenses, from a high of $1.08 million in 2007 to $823,430 in 2011. Expenses in 2010 were $880,040.
But overall revenues are down, too, from $1.03 million in 2007 to $791,331 in 2011. That is, in part, a reflection of declining attendance at the annual World of Bluegrass week, which is IBMA’s signature event and the source of much of its income.
That week, which begins with a business conference and ends with Fan Fest, remains profitable. The conference cleared $74,540 last year, the best showing since 2007. And Fan Fest cleared $57,801 last year, significantly better than the $36,690 profit reported for 2010.
The awards show has lost money since at least 2006, the earliest year that IRS records are available. But the $6,112 deficit in 2011 is actually the second-best showing in that period. In 2007, by contrast, IBMA lost nearly $74,000 on the awards night program.
Efforts to boost attendance at World of Bluegrass may pay off in the long run, now that the recession is over. But after the 2011 business conference portion of the week brought in the lowest revenue in the six-year period that we reviewed — $282,000 – the possibility of record high gas prices this summer may keep attendance down again this year. The vast majority of those who attend the business conference and Fan Fest drive to Nashville.
The board is looking for ways to encourage attendance by cutting the cost of attending, perhaps by shortening the week by one day and, perhaps, by negotiating lower hotel rates when the board decides whether to stay in Nashville after this year or move the event to another city. But none of those changes will be in place for this year’s conference.
In addition to trying to balance the budget, IBMA’s board is awaiting the results of an independent audit, which Zdonik said should be completed soon, and is trying to replace longtime executive director Dan Hays, who left for another job earlier in the year.
While the board and IBMA officers initially said they hoped to have someone in place in early March, Zdonik said the process continues.
“We are still conducting interviews,” he said Tuesday. “We are not rushing into a decision. The board believes that finding the right person is more important than enforcing a deadline.” IBMA staffer Nancy Cardwell is serving as interim executive director.