thanks for your email, Heath

[Jim Chamberlin]

Dear Heath,

Good to hear from you as a member of the current Toastmasters International Board of Directors, and as the representative from Region 7, which includes District 36, (if I have all of that correct).

When you hint that there's a bigger story, you tease but you don't please.  I hope you and your colleagues on the Board have an inkling of how much bad will this unexpected and unjustified dues increase has produced, and how much anger and disappointment has been created.

Personally I'll have to resign from at least 2 of my 7 clubs, and that is a common situation among my colleagues with multiple memberships.  Furthermore, the timing is atrocious, very disrespectful and disruptive of the way that many clubs conduct their affairs.  Last weekend I was at a meeting of a club and many of the most veteran members I talked to said they were astounded at the increase and were contemplating cutting back their extensive volunteer commitments to T.I.

Take care.  Nothing against you personally.  Sounds like the BOD is asleep at the wheel.  Have a good convention. 

Jim

---

From: "Suddleson, Heath" <hisu...@bechtel.com>
To: Jim Chamberlin <chamberl...@yahoo.com>
Sent: Monday, August 8, 2011 2:49 PM
Subject: RE: Problems with the Recent Toastmasters International Dues Increase

Jim,

 

This e-mail can be sent to boardc...@toastmasters.org as a means to send to the entire BOD.

 

Please remember as you try to circulate this that John’s comments are very insightful, but he does not have the complete story.  Admittedly, if we had provided him with a better picture, he probably would not have written his e-mail in the first place.  Still, inaccurate information circulated is inaccurate information multiplied.  I will accept that this is more on the BOD than it is John, but I would suggest that you might not forward this beyond your suggestion to forward to the BOD.

 

Heath

 

From: Jim Chamberlin [mailto:chamberl...@yahoo.com]
Sent: Monday, August 08, 2011 12:44 PM
To: tD27 Heath Suddleson; Suddleson, Heath
Subject: Problems with the Recent Toastmasters International Dues Increase

 

Hi, Heath,

 

I forward this to your wife among others, because she's a member of Dupont Speaks, as am I.

 

Thought I'd share it with you as well. 

 

I'm VP-PR of both Dupont Speaks and Capital Toastmasters 2, which is John Hockenberry's club.  His email was so remarkable that I've tried to circulate it widely.  It politely delves into many of the issues that have me and many so upset. 

 

Is there any way that you could provide the emails of the current international so that we could send this to them individually. 

 

We have little confidence that anything sent to T.I. will get to the board.  John has given permission for this to be circulated as widely as possible.

 

Hope to hear from you.

 

Jim Chamberlin

 

----- Forwarded Message -----
From: hocken 65 <hock...@yahoo.com>
To: "capi...@freetoasthost.com" <capi...@freetoasthost.com>
Sent: Saturday, August 6, 2011 12:26 PM
Subject: Problems with the Recent Toastmasters International Dues Increase

Fellow Cap II Members:

 

All of you probably received the August 4 email from Toastmasters International ("TMI") announcing that, beginning October 1, the dues all Toastmasters clubs have to pay TMI will be increased from $54.00 to $72.00 a year.  This is a 33% bump (okay, 33-1/3% for those of you who are good at math), which is a significant increase any way you look at it.

 

As I continued to read the email, I was struck by what I thought were wholly unpersuasive justifications for the increase (i.e., "member needs are greater than ever,"  membership has increased 55% since 1995, and "Toastmasters has passed the economy of scale established a decade ago; its support services must expand in order to better serve the ever-expanding membership base").  However increasing membership has meant that TMI's revenue has been increasing even at the old dues level, and economies of scale normally mean that things get cheaper per unit (here per member) as the number of units increases.  As Treasurer of your club, I have also seen how virtually all of the TMI functions that used to involve sending paper forms to TMI (such as enrolling new members) are now handed online.  Indeed, I would be amazed if TMI's per-member administrative costs have not declined since 2005 -- the last time dues were raised.

 

But as a loyal Toastmaster for over 20 years I wanted to give TMI the benefit of the doubt, so I decided to take a look at the annual financial reports that TMI helpfully posts on its website (here is the link in case you want to check them out yourself:  http://www.toastmasters.org/Members/MembersFunctionalCategories/AboutTI/Annual-Financial-Reports.aspx).  I expected to see an indication that TMI was under some sort of cost pressure and needed additional revenues if it was going to be able to function in the future as it has in the past.  However that is not what I found.

 

TMI's 2010 Financial Report shows that for the year ended Dec. 31, 2010, TMI had total net revenue of $23.9 million (dues account for about 67% of that) and total expenses of $20.5 million (I am rounding here).  That resulted in what is called an "increase in unrestricted net assets" of $3,462,229 (you can fairly think of that a non-profit organization's version of profit).  Indeed, looking at the balance sheet shows that TMI's total unrestricted net assets (this is essentially equivalent to stockholder's equity for a corporation) stood at $32.4 million at 12/31/10.  In more meaningful terms, those unrestricted net assets exist in the form of $10.7 million of cash and $20.6 million of marketable securities (together with some inventory, prepaid expenses and fixed assets) offset by liabilities of only $4.5 million.  Putting all of that together shows that TMI could continue to function for the better part of a year without any revenue at all! 

 

Nor does it appear that 2010 was an aberration.  The 2009 Financial Report shows an "increase in unrestricted net assets" for that year of $4,211,951.  So here we have an organization where revenues have exceeded expenses by a comfortable margin for the last two years.  Indeed, based on these numbers, it would appear that TMI could even REDUCE dues and still break even. 

 

I certainly am not advocating that TMI reduce member dues since I want it to continue to be financially healthy and to have a reasonable degree of operational flexibility.  Like all organizations, TMI also needs a financial reserve to cushion it from unanticipated revenue shortfalls and cost increases.  However it seems to me that TMI already has an entirely adequate financial reserve.

 

There is a hint in the TMI email that the revenues from the dues increase will be used to provide additional services.  Specifically, the email says "The increased funding will be used to enhance member support and services, and enable the implementation of the five-year strategic plan that was developed by the Board of Directors in 2010."  I have reviewed the Strategic Plan (here is the link: http://www.toastmasters.org/strat_plan), and it is fine as these things go.  But it is devoid of any specifics about how funds are to be spent or what new services TMI will provide to its members. 

 

My guess is that most organizations would prefer to have more money to spend, and probably most of those organizations believe that they could spend additional money effectively if they had it.  However when an organization like TMI exists almost entirely on dues paid by its members, I believe it has an affirmative duty to clearly explain to its members why any dues increase it wants to impose on them is justified by increased costs or by additional benefits it will provide.  Sadly in this case it seems to me that TMI has wholly failed to provide any reasonable justification for the increased dues it wants us to pay.   

 

My second basic problem is the manner in which TMI has announced the increase. 

 

Our club, I suspect like most Toastmaster's clubs, collects dues from its members quarterly in advance.  TMI also requires that its dues be paid in advance (in two installments -- one installment on October 1 and the other on April 1).  What this means is that our club sets aside some of the quarterly dues it collects over two quarters so it will have the necessary funds to pay TMI its dues on October 1 and then again on April 1.  Because TMI announced this increase with only seven weeks until the additional dues are payable, our club would have been forced to make a special dues assessment if it did not have a sufficient surplus in its treasury to cover the increase -- which fortunately it has.  However other clubs may not be so lucky.  (Let me also note at this point that, while I have not yet discussed the matter with the other officers of our club, speaking personally I believe our club will be forced to increase its own dues by the amount of the TMI dues increase.)

 

I recall that in 2005, the last time TMI dues were increased, there was substantial advance notice of the increase.  In part advance notice was built into the process because back then dues could only be increased by the affirmative vote of the membership.  Indeed, I remember discussions at one or more club meetings about whether or not a dues increase was warranted.  However in 2007 the membership agreed (I assume at the TMI annual convention where most clubs are represented by a district or area official) to give the authority to modify dues to TMI's Board of Directors acting without membership approval.  (Although a separate issue, given the way the Board of Directors has used that authority in this instance, I think a fair case can be made that the membership should consider amending the by-laws to reinstate membership approval for dues increases.)

 

Putting all of these things together, I am left with the impression of an organization that is proceeding in what I can best describe as a high-handed and insensitive manner. 

 

I am disappointed by what I see here, but I also want to give TMI an opportunity to reconsider its actions.  However that will not happen unless Toastmasters who share my disappointment communicate their views to TMI's leadership.  TMI has helpfully set up an email address where members can address questions and make comments about the dues increase.  That address is at the bottom of the email announcing the increase and is: duesin...@toastmasters.org.

 

I am sending an email to that address explaining the basis for my opposition to the announced dues increase and asking TMI's Board of Directors to roll back the increase.  If you agree with the points I have tried to make in this email, I ask that you do the same.  A few hundred emails will not make any difference, but emails from thousands of Toastmasters might.

 

There is also a reason for haste.  The TMI annual convention will be held in Las Vegas from August 17 through August 20.  Undoubtedly there will be a Board of Directors meeting at some point during that convention and I'm not sure how frequently the Board otherwise meets.  My sense is that if opposition to this dues increase is going to have any effect, that opposition should be expressed before the convention gets under way.  That gives all of us only about a week to act.

 

I know some of you are also members of other clubs.  If you wish to do so, please feel free to share this email with other clubs and with other Toastmasters.

 

Thanks for reading through all of this and best wishes,

John Hockenberry

 

[Dick Lobb]

So what's the complete story? Hockenberry made a good case. What's TI's?  With numbers, please. 

Richard L. Lobb

Cell (202) 841-9611

[Dick Lobb]

Thank you for your comments. 

Financial facts sufficient to support a large dues increase should be openly discussed and freely available to all. If access to them is restricted, then they are obviously not sufficient. I have been around organizational politics long enough to recognize when something is being rammed through. 

The sad thing is that a hefty dues increase will probably be counter-productive. TM will lose marginal members (or memberships, as in the case of Jim's multiple clubs), discourage new members, and come out little better off. The staff will be back for more before long. 

Better to charge for specific items (why is a CC or AC free?) and cut unneeded programs and services than to run up the cost of basic membership so abruptly. 

Richard L. Lobb

Cell (202) 841-9611

On Aug 9, 2011, at 4:21 PM, "Suddleson, Heath" <hisu...@bechtel.com> wrote:

Dick, Jim, and others,

 

I am restrict by policy from giving detailed numbers.  Those will need to come through WHQ and the President.

 

What I will tell you is that there was vigorous debate over the issue in terms of whether or not the increase was justified and we did consider the timing.   Since we needed a minimum of 2/3 vote on the BOD to pass the increase, you can read into this that the increase was justified, even in view of the timing.

 

Yes, we are well aware of all of the economic issues underway, and the political issues such as rebranding.  Our job on the BOD is to make the tough and often unpopular choices.  Mr. Hockenberry did make some outstanding points, but what he could not have known are the amounts of money that are not liquid, and additional amounts that are required by law to be held in reserve.  While it may look like TI has millions in cash sitting in the bank, that is just not the case.

 

Further to this is the understanding that we are not raising the dues to cover past expenses.  Actually, TI WHQ staff has done an outstanding job of cutting costs over the past two years.  In those years, the operating budget would have been a deficit had WHQ staff not made the cuts.  Now that those cuts are made, we must plan to move forward.

 

I fully understand the burden on dual members.  My wife, Michele, and I are both dual members.  Both of Michele’s clubs are in D36, and one of my clubs is in D36.  I am also a member in D18.  Many other BOD members are dual members as well.  You might consider in this that we voted ourselves a pay decrease because we pay the same dues as everyone else. 

 

I will concede that the mailing that went out did not make the case for why the increase was justified.  I will also stand by the decision of the BOD that this increase was in fact justified.  We owe it to the members to make our case properly.

 

I know that doesn’t tell everything you want, but I hope it does put things into perspective.

 

All the best,

 

Heath