Behind the scenes with IPC: how does the veteran industry organization operate? And what exactly is a not-for-profit?

Things were a lot different when IPC was founded.

Young men yearned for the new 1957 Chevy Bel-Air. The Space Age had just begun. And relatively few people in the world were involved in the design and manufacture of PCBs.

In the nearly 50 years since, the electronics industry has grown exponentially. And IPC (Association Connecting Electronics Industries) has grown from a standards organization with a handful of members into global trade association that runs its own trade shows and provides standards, training, certification, market research, public policy advocacy and more.

But even after five decades, many PCB designers and manufacturers are unsure of what IPC does, how it operates and the role of the Designers Council. What follows is a non-exhaustive look at IPC.

The Organization

Like many associations, IPC has undergone several name changes over the years. The Institute of Printed Circuits was founded by six PCB manufacturers as a not-for-profit trade association in 1957. By the 1970s, as cable and connector suppliers got involved with the group, the name was changed to the Institute for Interconnecting and Packaging Electronic Circuits. In 1999, the name was changed to IPC, followed by its "identity statement" Association Connecting Electronics Industries, to reflect the growing number of member companies involved in electronics assembly.

PCD&M readers occasionally inquire about what not-for-profit means. One of the most important benefits of being a not-for-profit organization is its tax-exempt status under Section 501 (c) of the U.S. Tax Code. Trade associations like IPC are usually groups of people with a common interest who wish to promote that interest, not engage in a business for profit. Children's Health Care Atlanta and Nevada's Great Basin Association are other examples of not-for-profits. Not-for-profits are not usually charities.

Some people assume that the group is not permitted to make a profit, or that all profits must be reinvested by year-end. That's not the case, according to David Bergman, IPC's vice president of standards, technology and international relations.

"There is no maximum or minimum amount of money that must go back into the association. If the association makes a surplus, the money goes into cash reserves and can be used in years when there is an operating loss, or it can be put into larger projects," Bergman said. "Although some may think that not-for-profit means that an organization does not make money, it is incorrect. An organization that is not profitable or does not break even over the long term cannot stay in business."

Denny McGuirk has been president of IPC since 2000. He is responsible

for supervising the 61 full-time and 11 part-time staff members, overseeing day-to-day operations and ensuring the association meets the goals and objectives set by the board of directors. Of the 72 paid employees, over half are involved with standards, certification, training, trade shows and market research (TABLE 1).

IPC relies on the efforts of volunteers, including its Board of Directors. The IPC board is made up of the president, chairman, vice chairman, secretary treasurer, the immediate past chairman and 14 directors. No director may serve more than four, two-year terms (eight consecutive years) unless nominated for an officer position. After the board determines the organization's goals, the president and senior managers are responsible for allocating the resources necessary to meet those goals.

Interested in a seat on the board? Board members are typically senior-level executives from IPC member companies--board shops, EMS providers, OEMs or materials suppliers. And IPC says its board candidates "should be of the highest moral and ethical character and must exhibit strong leadership abilities, independence and objectivity." Candidates can be self-nominated or proposed by third parties. Potential candidates for the board are identified and evaluated by IPC's Nominating and Governance Committee.

Board members are not reimbursed for expenses, but as company leaders they don't have trouble recouping their expenses.

How do 19 industry execs get together and agree on anything? Board member Peter Bigelow, president of board maker IMI Inc., said it's not really a problem. Bigelow said the board meetings, two or three each year, usually run smoothly.

"The IPC board operates very similarly to that of any corporate board. Meetings focus on strategic, governance and financial overview. It has been my experience that when topics are raised, opinions are voiced, but at the end agreement has been achieved," Bigelow said. "I understand that in the early days of the IPC, the board was far more hands-on with specific programs, doing much of the work themselves. However, as IPC has grown, the board's role has equally evolved with that growth."

Member Since 1957

IPC now boasts over 2,200 members--OEMs, PCB manufacturers, EMS companies and suppliers. As with most associations, IPC membership is open to companies, not individuals.

"As a trade association, IPC has primarily company-based members," said Bergman. "And so it's actually a physical location. We have some companies that have more than one membership: for example, Flextronics has eight and Lockheed Martin might have five or six. That's historically how IPC membership has been established ... it's a physical location as opposed to a corporate membership."

As of August 2, 2005, IPC had 2,251 members. The membership sites--individual locations, not companies, which would number fewer--is broken down into the following categories:

OEMs                746
Suppliers           585
EMS companies       413
PCB manufacturers   313
Government/Others   194

Membership is $1,000 per year for one site, and $800 for each of a company's additional sites. IPC is proud that it's raised its dues only twice, up from $500 in 1957. Members receive discounts on standards and training, and can attend biannual Technology Market Research Council (TMRC) meetings and California Circuits Association events.

In addition to its membership fees, standards and training, IPC also generates revenue through Designers Council dues ($50 a year), Certified Interconnect Designer certification classes and exams ($600 for council members, $800 for nonmembers), workshops and the IPC Expo trade show. There are now 2,468 CID-certified designers, and 347 have the advanced CID+ initials after their names.

How much does this bring in? IPC had revenue of $12.2 million in 2004 (TABLE 2). Over a third of revenue came from, and was spent on, "industry programs." Bergman explained that this category includes the APEX/IPC EXPO trade show, the TMRC meeting activities, monthly statistics programs, the Government Relations program in Washington, D.C., the California Circuits Association, the PCB Presidents Council, the EMS Presidents Council, the Suppliers Management Council and the SMEMA Management Council. Nearly a quarter of revenue goes toward salary, benefits and overhead.

Standard Procedure

By their nature, standards organizations have a tough row to hoe. In the ever changing electronics industry, standards are often far behind the so-called "bleeding edge."

IPC has been criticized for not reacting quickly enough to technologies such as HDI. But those areas may be outside IPC's sweet spot.

"IPC does not write very many, if any, of what I would consider a format standard for something that doesn't exist," Bergman said. "We look at things when standards start to stabilize and then we gather the information, document it and then have it available out there. So, by their nature, they tend not to he right at the edge. Do some people consider that to be out of date? I guess if you're living on the leading edge, looking for a standard to live on the leading edge, then maybe that's the case. But there are more members interested, in my opinion, in working on the ones that are properly documented--the major manufacturing base."

IPC has "fast-tracked" standards, sometimes by having a staff member lead the development. But a certain amount of time has to be spent in the development and review stages.

"I've had standards go as short as a year and as many as seven years. It really depends on the topic and the committee individuals," Bergman said. "For example, IPC-610 for lead-free. People would have liked to have had that standard in place two years ago, but what are we going to put into it that people are going to agree on?"

Designers Council

Founded in 1991, the Designers Council has IPC's only individual members: 1,095 PCB designers. Because the Designers Council has individual members, it's actually a society with in an association, according to IPC. There are 35 self-governing chapters globally. Members pay $50 in annual dues and the local chapter gets $20 of that fee to help establish its own programs. Council members receive a $50 discount on design-related standards, as well as discounts on workforce training programs, meetings and conferences such as the PCB Design Conferences.

The council's charter was written and approved by the council's Executive Board, who can also modify it. Executive Board members are elected by their peers to three-year terms.

The Executive Board has no seat on the IPC board, but is represented by an IPC board member. Andy Kowalewski, chairman of the Executive Board, believes designers would benefit from having one of their own on the IPC board.

"My executive and I feel strongly about having our own representative on the IPC board, but have been told quite forcefully that that is impossible," Kowalewski explained. "My own view is that designer representation is very important if the IPC is committed to embracing design as a critical part of the design-fab-assembly continuum of the electronics industry."

But Bergman disagrees.

"At one point, I think the designers were interested in a seat on the board of directors. To be quite honest with you, I don't know how they would relate," said Bergman. "I honestly believe the designers can get as much as they want accomplished through their conduit as they could if they had a seat on the board.

IPC recently reactivated the lapsed "Route," a monthly newsletter designed to keep council members informed about IPC and industry events. And IPC operates the Designers Council listserv, DC List, which is free and open to anyone.

Bergman has seen DC List comments decrying IPC's purported funneling of Designers Council members' dues and CID certification fees toward IPC's "true love," the manufacturing community. But Bergman said IPC doesn't make much, if anything, through the services it provides designers.

"IPC had a painful downsizing when the dot-com guys went south, and trying to find ways to reduce costs on all our programs, including designers' programs, was something we worked hard to achieve. Fortunately, we've been able to reduce that loss way down, but it's still not break-even," said Bergman.

"I'd like to give everything away to people for free but in reality, I've got to try to do things on a break-even basis, or there won't be anything," continued Bergman. "I can't have the Designers Council spending all of IPC's money because a group of leaders there feel that it's important. It has to make sense to the organization. If the Designers Council was flush with cash, I would think that they would have a lot more flexibility in doing some of the things they might want financially-wise."

Kowalewski agrees that the Designer Council dues have not covered IPC's administration costs.

"My own personal view is that there should be a review of the financial side of the way membership is financed. Instead of just breaking even With currently reduced resources, perhaps the way forward is to increase revenue so that additional resources become available to meet the needs of the design community," Kowalewski said. "How that can be done is an ongoing discussion, but an increased membership fee leading to increased benefits seems one obvious way. Whether that will lead to reduced membership in these troubled times continues to be a major part of our discussions."

The Future

IPC membership has expanded around the globe. But the very fact that 542 of its member companies are located outside North America has led some critics to claim that IPC is incapable of acting in the best interests of the North American PCB industry. Opening offices in Sweden and China drew more verbal slings and arrows.

But adding staff and services overseas will not minimize its commitment to North American industry, IPC says.

IPC's Government Relations office, currently led by John Kania, is openly pro-U.S. During the last two annual Capitol Hill Day events, Government Relations led the PCB industry's drive to pressure Congress about China's currency manipulation. And that department helped push Congress into adopting a more favorable, realistic capital equipment depreciation schedule.

An association the size of IPC touches people of disparate job descriptions at so many different types of companies that it will likely never please all of its members. And as the North American PCB industry continues to evolve, IPC's leadership will have its hands full. But Bigelow believes IPC and its board are ready.

"The world of electronics and manufacturing is going through unprecedented changes," Bigelow said. "I do believe that IPC's board is trying to navigate through that change."

ANDY SHAUGHNESSY is editor of PCD&M.

TABLE 1. IPC Staff

IPC EMPLOYS 61 FULL-TIME AND 11 PART-TIME STAFF MEMBERS:

Standards and technology, including Designers Council/
professional development, environmental affairs
and video/computer-based training                         25

Industry programs, including trade show and exhibits
operations, market research, government relations and
the California Circuits Association                       11

Marketing, communications and membership                   7

IT, accounting and human resources                        13

Meeting planning/registration                              5

Production/fulfillment/customer service                    4

Executive and international staff                          7

TABLE 2. IPC's 2004 revenue totaled $12.2 million

BREAKDOWN OF REVENUE:
Membership                                               16%
Industry Programs                                        38%
Technical                                                18%
Professional development, video, certification           25%
Other programs                                            3%

BREAKDOWN OF EXPENSES:
Industry programs                                        38%
Technical                                                12%
Professional development, video, certification           20%
Government/EHS                                            2%
Other programs                                            4%
General admin (includes salary, benefits and overhead)   24%