Arabian Horse Association still serves 44,000 members.

When the nonprofit, Colorado-based Arabian Horse Association, an international horse registry with 44,000 members, hired a new executive vice-president last May, its members were looking for change.

The change had nothing to do with why the association, which promotes one of the world's oldest and most fabled breed of horse, had gained instant national fame eight months earlier.

Mike Brown, former director of the Federal Emergency Management Agency, had made a mess of the federal government's response to Hurricane Katrina in New Orleans, and the national press, according to AHA President Myron Krause, "camped out on the association's lawn in Southeast Metro Denver, while the AHA's phones "rang off the hook with reporters," he said.

But it wasn't Brown, who served as a paid commissioner of judges and stewards for AHA, who had caused a steady decline not only in horse registrations but in revenue and annual surplus for the nearly 100-year-old nonprofit, said Gary Zimmerman, the new executive vice president hired to turn around the financial performance of the registry.

"The association had been run like a little horse club," said Zimmerman, "when in fact it needs to be run exactly like a business, to the point of making a profit."

"From 1995 up to today, this has not been the most productive period for the association," he added. "We have seen a decline year after year after year in the number of registrations, resulting in an actual decline in the breed." Changes in tax law, increased costs of fuel and transportation and the rising costs to show and train horses all contribute to a lack of demand for expensive Arabians, he said. "That's not good for the horses, the organization or the membership.

"We are also in the process of correcting some serious strategic errors, and aggressively implementing new initiatives. One strategic error is that we have been very narrowly focused on horse-show events."

Zimmerman's predecessor, Barbara Burke, said of the time when Brown brought the national spotlight to AHA that the association had "a lot of bigger things to worry about," mostly related to hefty losses.

In 2004, the organization lost $560,000 on about $11 million in revenue. Last year, it was able to post a $250,000 surplus on about the same amount of sales. Today, after some stringent cost-cutting measures, Zimmerman is hoping to post a $450,000 surplus for 2006.

Those numbers show just how big an operation Mike Brown was not responsible for ruining--which is what the national press would have liked to pin on him.

But still the organization is struggling. Now a $12 million annual business with about 60 employees, it focuses heavily on providing services to a membership that collectively registers almost 1 million horses.

"It is true that breed registrations are down," said Krause, who was elected the association's volunteer president in November 2004 on a platform of aggressive fiscal change. "We have made more dramatic changes in the past two 0000years than we have in well over a decade," he said, but he also admits that expenses from a recent merger were larger than expected.

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This month, at the AHA annual convention in Louisville, Ky., Nov. 15-19, Krause is running unopposed for an unprecedented second two-year term as president. Both he and Zimmerman know that, given declining horse registrations, the association has to create more opportunities for members to be involved in AHA activities to generate increased revenue.

"Demand is down, so we have to create additional venues," said Krause. Venues "that are more affordable than horse shows, from which we can showcase our products," he added.

Yet showing the breed is still important. Those 1 million registered Arabians represent more than 10 percent of all the horses registered in the United States, and Krause points out: "Percentagewise, more people show Arabian horses than any other breed."

THE GROUP SCRUTINIZED FOR AFFILIATION WITH FORMER FEMA DIRECTOR MIKE BROWN STILL STRUGGLES TO MAKE MONEY