Cancelled revenues: Attacks hurt annual events, cash flow. (Financial Focus).

The terrorist attacks of September 11 forced some associations to cancel or reschedule annual events, straining the groups' financial resources. Some are living off reserves until this year's events. At least one group is exploring online sessions to reduce travel stress and recoup a few dollars.

The groups that were forced to cancel events took considerable revenue hits, but luckily visionary planning enabled them to dip into reserve funds set up for such predicaments.

The National Catholic Development Conference (NCDC) reacted promptly to the attacks, canceling its September 16 through 19 event by making telephone calls to its membership base of 400 and making sure that the approximately 800 prospective attendees were notified, said Ryan Gates, communications/public relations coordinator for the Hempstead, N.Y.-based NCDC.

According to Gates, NCDC's annual conference accounts for between 35 to 40 percent of the group's annual revenue. Consequently, canceling it was a decision that had a definite impact on its bottom line.

"That's our primary means of revenue and we cancelled it," said Gates. "Some of our members did help us out. They requested that we keep their registration fees."

NCDC President and CEO Georgette Lehmuth, OSF, explained that the board of directors decided to refund all registration fees the day after the attacks, including those that were willing to donate portions or all of the fee when the decision was first made to cancel.

NCDC is going to loot its reserve fund to assist in the repayments, and keep it going until this year's event cash flow begins.

"The board/the executive committee of the board made the decision the morning of September 12 (to cancel the conference). By Friday afternoon our home office had personally contacted each organization that was scheduled to attend. ... We called everybody," explained Gates.

"We've done some wise planning in the past and set some monies aside, so we do have some reserve from which we're going to be able to pay our members, pay our attendees back with some of our reserves," said Lehmuth.

As far as the financial impact of the cancellation on the future of NCDC Lehmuth said the association is in good shape for 2002.

"At this point, unless something catastrophic were to happen, I think we're going to be okay and we're going to move forward from a position of 2002 is a new year, it's a new time and we really want to put 2001 behind us in terms of what losses (we incurred) ... We'll take our losses in 2001 and start anew in 2002."

NCDC is in the process of figuring out its insurance policy coverage, but at press time was uncertain how much will be recovered.

The attacks had profound professional and personal implications for Association for Healthcare Philanthropy (AHP). Not only did the organization cancel its annual conference, set for Chicago, but the son of AHP CEO William McGinly was killed during the attacks on the World Trade Center in New York City.

McGinly was in Chicago preparing for the event when he saw the unthinkable attacks unfold and feared for his son's well being. "Based on my recommendation, of course it was really a 'no-brainer.' Once the planes were down nobody could have attended our conference had we wanted to move ahead with it," explained McGinly. "And, a big part of it of course was just the sensitivity to everything that was going on particularly, after the second plane hit the tower. We knew we were really under an attack, it was not just an accident, which is what I think a lot of people had surmised after the first plane."

According to McGinly, who remains stoic in his work ethic but is still taking the loss of his son day-by-day, the conference would have hosted close to 1,100 people. AHP lost $175,000 in up-front costs for deposits, staff time, travel expenses, and meeting costs. In addition, the conference generates approximately $135,000 in net profits.

"We have about 44 programs and services that we provide and only four of them actually generate a positive bottom line - the conference being one of them," said McGinly. "Our budget's about $2.6 million, but again the key thing is, the net after all of our expenses would have been about $135,000 ... so we devote those dollars to other programs and services that we offer."

AHP is waiting to hear from its insurance carrier, which had offices located in the World Trade Center, about what type of compensation may be available.

McGinly said that AHP's insurance plan does not cover for acts of war or terrorism. However, the carrier for those individuals that would have been unable to attend anyway due to the closure of all airports across the country may acknowledge a contingency.

"We're waiting to hear from the insurance company and we don't have the official word from them. It does look promising, however, at least for the people that they covered that had conferences that week. We may be able to recover some of this just based on their review for the conference because of the exact time that we were scheduled."

The current plan is to refund all the money. If no money is recovered through insurance, McGinly isn't too worried because of financial decisions made in the early 1990s that created a reserve fund that is more than capable of handling the situation.

"And $300,000, it isn't quite half of what we have (in reserves) ... So, financially, thank goodness for the foresight of our board," said McGinly. "We all say, 'it's for a rainy day.' Well, it poured that day."

Some attendees contacted by AHP have rolled their registration fees over for next September's conference, scheduled for San Antonio.

Other groups rescheduled conferences including Association of Fundraising Professionals (AFP) North Carolina/Charlotte chapter's annual conference for February. All other seminars, conferences, and events went off as scheduled, according to Michael Nilsen, AFP's public affairs manager in the national headquarters in Alexandria, Va.

"We had a couple of kind of big chapter regional conferences that were held at the end of September and they didn't have actually any fallout at all," said Nilsen.

The Washington, D.C.-based Council for the Advancement and Support of Education (CASE) also postponed one of its scheduled conferences due to September 11, said John Lippincott, vice president of communications.

September through December is slow as far as conferences go for CASE, therefore, postponing one of their 60 to 70 annual events wasn't that difficult.

Conferences comprise 40 percent of CASE's revenues, with membership dues making up another 40 percent. The remaining 20 percent comes from sales of products and services.

"For us, actually the impact would have been probably significantly greater had it been at another time of year," explained Lippincott. "But the one that we had scheduled closest to September 11 we did postpone. We had something like 30 registrants for it and ... I'm not quite sure what the budgeted number was, but probably something like 75 people to run it."

The other thing that forced CASE to postpone the event until the spring was the Anthrax scare at the Brentwood mail facility in Washington D.C., which serves the association. "Although it didn't cause us to make any change in the final analysis, it held up a lot of the registrations or us," said Lippincott.

Conference attendance has been down since September 11 (around 5 percent), but certainly not enough to tamper with conference planning

The events of the past few months have forced CASE to look for other ways to serve its members.

"What it has caused us to do is to think about going forward -- and there's no way that you c4 do this on a short-term basis," said Lippincott. "We have been exploring some more opportunities for online education, for Webcasting, for those kinds of things for people who either are reluctant to travel because of this kind of incident or simply for financial reasons."

Setting the repercussions of September 11 aside, the weakening economy may be a contributing factor to fewer conference attendees, added Lippincott.

"We're the largest association of educational institutions in the world -- a lot of our institutions are public institutions and are dependent on state funding. We are starting to see some state cutbacks in funding for public higher education ... And that could affect things like conference attendance."

Chris Vest, manager of media relations for American Society of Asssociation Executives (ASAE) said the group's Digital Now conference, which was scheduled for September in Orlando, was rescheduled for February 7 through the 9.

The Washington, D.C.-based ASAE conducts many seminars in the area therefore, the Digital Now conference was the only thing rescheduled outside of the D.C. area. "We have some day programs, some educational seminars and so forth that were cancelled. It wasn't a situation that we had a bunch of people flying in and out of town," Vest said.

One event ASAE went ahead with after serious cancellation consideration was the $500 a ticket Summit Awards Dinner on September 25, which pulled in a net profit of $600,000.

The event, held at the National Building Museum in Washington, D.C., was attended by close to 900 people, many of whom flew in from all across the country, said Vest. It's the highest honor bestowed to an association by the ASAE, and according to Vest only a few attendees cancelled plans to attend and not enough to make a difference in the bottom line.