the asa’s money problems
The Disgruntled Sociologist has been looking at the tax returns of the American Sociological Association and has uncovered some facts about spending and financial activities that should concern most of the organization’s members ( Part 1, Part 2, and ASA, Wizards of High Finance). Here are some of the highlights, which in some cases I’ve copied and pasted directly from TDS:
- The ASA spent $10M on a “condo.”
- From 2003 to 2008, total revenue has been flat, but revenue from dues has increased substantially — almost 17%.
- The staff of the ASA grew 26% in five years. Wages and salary increased roughly the same amount.
- Total expenses for the the ASA ($7.6M) are greater than any of their peer organizations: American Political Science Association ($6.2M), American Economic Association ($7.1M), American Anthropological Association ($4.7M), and American Historical Association ($3.5M).
- Total compensation of headquarters staff for the ASA is substantially higher than for the other organizations (with the exception of the AEA, which lists more than twice the number of employees).
- The ASA has substantially higher interest expenses than the other organizations.
- In 2008 the ASA spent its cash reserves of $1.8M – “from approximately $3M at the beginning of the year to $1.2M at the end,” presumably to make up for that year’s 28% loss in investments.
- The ASA has $8M in bond liabilities.
- The big change in liabilities comes in the ominous category, “Other liabilities.” This increases twentyfold, from $101,000 to $2,000,000. The ASA describes these liabilities on the tax form as an “interest rate swap obligation.”
What should we make of all this? TDS rightly points out that we might be disturbed that the ASA has increased spending substantially without any apparent improvement in member services. It’s not clear what all this spending is doing. But the bigger problem is that nobody knew about this. The ASA releases very little financial information. In the words of TDS:
In this context it is very disturbing that the ASA releases very little financial information to its members, and does not communicate regularly about the state of the association. Audited financial statements are available on the ASA website, but they are a) hard to find (you have to search, you cannot find them by browsing) and b) the most recent audited statement is from … 2007! Coincidence?…
The real scandal is the fact that nobody knows. Go to the ASA website and search for “interest rate swap” or “bond issuance.” Nada. Search in the full-text index for Footnotes. Nothing.
orgtheory.net 
The ASA describes these liabilities on the tax form as an “interest rate swap obligation.”
Am I seriously to believe that the ASA got burned trading derivatives?
LikeLike
Kieran
March 1, 2011 at 4:54 pm
It’s not clear what all this spending is doing.
As I’ve said before, I think it’s mostly financing the ASA’s Potemkin Fantasy of legislative influence and policy relevance.
LikeLike
Kieran
March 1, 2011 at 4:57 pm
Does that explain the condo? Is it for lobbying purposes? Their job is to run a conference, some journals, and give out some research and fellowship funds. That’s it. Where did the interest swap come from?
LikeLike
fabiorojas
March 1, 2011 at 5:01 pm
Trying to figure out the “condo.” Do they rent office space? Is the condo their current space? Does that mean they got burned on the real estate market of 2006?
LikeLike
fabiorojas
March 1, 2011 at 5:09 pm
“$10M condo” and “IR swaps” —- wow, someone’s got some ‘xplaining to do.
LikeLike
teppo
March 1, 2011 at 5:19 pm
Boycott them ;)
LikeLike
Jon
March 1, 2011 at 5:28 pm
as kieran alluded to, there was previously a discussion of these issues at scatterplot. the posts were by jeremy but there was an active comment thread, including kieran and myself.
also a few other related posts here and here.
LikeLike
gabrielrossman
March 1, 2011 at 5:34 pm
Gabriel – yeah, I knew of those previous Scatterplot posts. I think the investigation by TDS shows that the problems are even more serious than originally thought. Don’t you think?
LikeLike
brayden king
March 1, 2011 at 6:04 pm
Fabio – Yes, I think they got burned by the market bubble. That especially seems to come out in the organization’s sudden drop in investment value. If they bought the condo at the peak of the market, then their investments actually declined in two ways: they lost money on the purchase of the condo and the value of their overall financial portfolio declined.
LikeLike
brayden king
March 1, 2011 at 6:25 pm
brayden,
i wasn’t implying that “it’s been done,” just that there’s even more discussion of this available for people who are interested. the new posts definitely add valuable info, insight, and snark. myself, i’ve added TDS to the codeandculture blogroll and my own RSS feed. even if TDS were strictly redundant (which I’m not saying it is), my opinion is that the more sets of fuming eyeballs we have scrutinizing the ASA’s 990s the better.
LikeLike
gabrielrossman
March 1, 2011 at 7:13 pm
I have a better example of waste by a spend thrift campus chancellor at University of California. Just how widespread is the budget crisis at University of California Berkeley? University of California Chancellor Robert J Birgeneau’s ($500,000 salary) eight-year fiscal track record is dismal indeed. He would like to blame the politicians, since they stopped giving him every dollar he has asked for, and the state legislators do share some responsibility for the financial crisis. But not in the sense he means.
A competent chancellor would have been on top of identifying inefficiencies in the system and then crafting a plan to fix them. Competent oversight by the Board of Regents and the legislature would have required him to provide data on problems and on what steps he was taking to solve them. Instead, every year Birgeneau would request a budget increase, the regents would agree to it, and the legislature would provide. The hard questions were avoided by all concerned, and the problems just piled up to $150 million of inefficiencies….until there was no money left.
It’s not that Birgeneau was unaware that there were, in fact, waste and inefficiencies in the system. Faculty and staff have raised issues with senior management, but when they failed to see relevant action taken, they stopped. Finally, Birgeneau ($500,000 salary) engaged some expensive ($3 million) consultants, Bain & Company, to tell him what he should have been able to find out from the bright, engaged people in his own organization.
In short, there is plenty of blame to go around. Merely cutting out inefficiencies will not have the effect desired. But you never want a serious crisis to go to waste. An opportunity now exists for the UC President, Chairman of the UC Board of Regents Gould, California Legislators to jolt Cal back to life, applying some simple oversight check-and-balance management practices. Increasing the budget is not enough; transforming senior management is necessary. The faculty, Academic Senate, Cal. Alumni, financial donors, benefactors await Cal senior management’s transformation.
UC Berkeley public reprimand, censure: NCAA places Chancellor Birgeneau’s men’s basketball program on probation
The author,who has 35 years’ consulting experience, has taught at University of California Berkeley, where he was able to observe the culture and the way senior management work.
(UC Berkeley ranking tumbles from 2nd best. The reality of UC Berkeley relative decline is clear. In 2004, for example, the London-based Times Higher Education ranked UC Berkeley the second leading research university in the world, just behind Harvard; in 2009 that ranking had tumbled to 39th place. By 2011 the ranking had not returned to 2nd best)
LikeLike
moravecglobal
March 1, 2011 at 7:27 pm
It is very easy for people to complain about how the ASA handles money and how “the ASA has increased spending substantially without any apparent improvement in member services”. Yet very few members do anything about it. Very few members go to the business meetings at the annual meeting. very few members formally complain about costumer service (which most members consider quite good, actually). and more importantly, very few people contact the ASA president, vice president, secretary, or even the executive officer, with these concerns.
LikeLike
student
March 1, 2011 at 9:12 pm
… says “student.”
LikeLike
Trey
March 1, 2011 at 9:54 pm
Yes, I am a student. I also worked for ASA for a number years.
LikeLike
student
March 1, 2011 at 9:58 pm
Just to be clear, student, the issue wasn’t that ASA member services are poor or declining and therefore warrant complaints; rather, I was just noting that there was an increase in expenses without a noticeable improvement in services. People could be just as happy with ASA services today as they were three years ago, even if they don’t know that those services have become more costly to offer.
Of course, more people might contact the officers with concerns if they knew what sort of financial shape the organization is in (but they don’t because this information isn’t widely available to members).
LikeLike
brayden king
March 1, 2011 at 10:10 pm
$10 condo? Interest swaps? Are you kidding me?
Considering we are an organization of sociologists, often asking for transparency elsewhere, I am appalled at the lack of transparency in ASA. As a post-doc with no cushy research expense account, I do not appreciate the membership cost to the tune of $200. I would suspect many of the folks outside of R1 institutions would agree.
LikeLike
Lewis
March 1, 2011 at 10:14 pm
I know the primary issue is not the quality of costumer service. But thanks for making that clear.
I think the real problem is that the information is available (otherwise we wouldn’t be discussing it), and members are not happy about what’s going on with the finances. That I understand, and as a paying member of the ASA i’m also unhappy about this. I just don’t think writing a blog about it is going to do much. If you, Kieran, Fabio, or anyone else has concerns about how ASA handles the money, then say something to ASA. That was my point.
LikeLike
student
March 1, 2011 at 10:15 pm
TDS has replied to student’s comment on our own blog; suffice it to say that it is a beautiful instantiation of the Iron Law of Oligarchy to say that the problem is with the membership.
There is also something disconcerting about talking about “customer service” when in fact we should presumably be talking about “member service.” A minor point, but still.
One last issue: student says “the information is available (otherwise we wouldn’t be discussing it).” A lot of effort went into gathering the information discussed, and almost none of it was gotten from the ASA website. Compare that to the websites of the APSA, AEA, AHA etc. Further, a lot of the information is *not* available. TDS is not hung up on 2008 in particular – that is simply the last year for which we could find any info. There are *no* audited financial statements available post-2007. That is a travesty.
LikeLike
thedisgruntledsociologist
March 1, 2011 at 10:57 pm
Yet very few members do anything about it. Very few members go to the business meetings at the annual meeting. very few members formally complain about costumer service (which most members consider quite good, actually). and more importantly, very few people contact the ASA president, vice president, secretary, or even the executive officer, with these concerns.
Very few members dig up the relevant IRS tax returns from official sources for want of any shred of better information about the finances of the organization they pay dues to, either. Are you seriously suggesting that this is the fault of the members?
LikeLike
Kieran
March 1, 2011 at 11:01 pm
This is great! I come to this blog to learn about the arcana of sociology — interesting, but serious stuff (ferrets and Star Trek, notwithstanding). But this is like going to the senior citizens center and finding Arcade Fire performing on the lawn. ASA shaking down its members and buying condos and derivatives! And cooking the books! This will make the HBSP bestselling case study list, if the orgtheory mob writes up the case.
LikeLike
Randy
March 1, 2011 at 11:38 pm
>I just don’t think writing a blog about it is going to do much. If
>you, Kieran, Fabio, or anyone else has concerns about how ASA
>handles the money, then say something to ASA.
It really pisses me off when somebody in a position of authority gives this “proper channels” bullshit. This sounds like an open door policy but really its a way to marginalize dissent. If one person petitions about issues he/she only vaguely understands, that person is just a crank and it’s an issue of calming them down. If a lot of people complain about an issue for which they’ve collectively developed a fairly strong understanding, then that’s a serious issue that can actually result in change.
That’s why going to ASA with requests and/or a slate of ASA council candidates is step two. The first step is to discuss it with other people to straighten out the facts about the problem, develop a proposed solution, and build up a caucus. That’s exactly what Jeremy, Brayden, Fabio, Kieran, and TDS are doing and I applaud them for it.
LikeLike
gabrielrossman
March 2, 2011 at 12:04 am
In reply to gabrielrossman: I’m not in a position of authority, I just happen to think that there are better ways to go about this than writing a blog.
To Kieran: I don’t think this is the members’ fault. I pay my dues and I am just as concerned about this as everyone else. I’m not defending ASA. I just don’t think snappy comments on twitter and posting blog entries is the best way to go about it.
LikeLike
student
March 2, 2011 at 1:47 am
student, Right now I’m at the stage of registering frank surprise that this is even happening at all, and wondering what the explanation is. (I imagine others are in a similar position.) I am happy to do this via the medium of blog posts, tweets, and general conversation, and am not yet laboring under any misapprehension that chatting about it online is likely to affect anything as yet. On the other hand, a little bit of publicity might well prompt a response—it’s not 1982 and the ASA is not confined to some quarterly or annual schedule when it comes to addressing this sort of thing.
LikeLike
Kieran
March 2, 2011 at 2:11 am
So, in an effort to keep this moving forward: I’m not familiar with the procedures members generically use to evaluate ASA staff and staff performance. Can someone educate me?
LikeLike
Jenn Lena
March 2, 2011 at 2:38 am
To build off Jenn’s comment, what is the relationship between the elected ASA leadership and the (presumably) longer term professional staff? Can we elect a slate of ASA candidates on an oversight platform? Which offices and officers handle oversight right now? Is oversight of this magnitude something they expected to be one of their responsibilities when they ran for the job?
LikeLike
Noah
March 2, 2011 at 3:03 am
TDS is puzzled by the sentiment, expressed here and on TDS, that somehow it is “improper” to discuss this on a blog, and that it would be more “proper” to send an email to a staff person at the ASA. One has the distinct impression that one is listening to appartchiks defending the Party.
Leaving aside the fact that the average response time from the ASA is best measured in months, it is not clear exactly what is wrong with discussing these things on blogs. All TDS did was take public information and present it in a different way. What’s wrong with that? Why would the leadership at the ASA have any problem with that whatsoever? Why would the members?
LikeLike
thedisgruntledsociologist
March 2, 2011 at 3:13 am
Has anyone tried to contact ASA about this?
LikeLike
student
March 2, 2011 at 3:16 am
@student: Good on ya’ for sticking with this discourse. It appears that part of the issue is “who is the ASA?”. If you mean the membership, then it is abundantly obvious that there is no need “to contact”. If you mean the elected officers (are there REALLY 19 members of the executive?), my guess is that they have heard the jungle drums. If they require a quorum to deal with this, or worse, require it to be discussed at a regular meeting, a response will not be immediate. (Sorry, I didn’t read the by-laws. I couldn’t get past the size of the council…) If the ASA to which you refer is the professional staff, they don’t need to be alerted. They are probably piling sandbags around the condo now.
LikeLike
Randy
March 2, 2011 at 3:40 am
Randy and Noah,
in light of your thoughts, you’d probably be interested to know that in the earlier scatterplot discussion a few months ago, Jeremy explained that he’s a member of the publications committee and had a very difficult time getting information about matters directly related to publications. so this is not just a member, but an elected officer (and an especially smart one at that) who couldn’t get answers out of the (professional staff of) the ASA on an issue of direct relevance to his office.
LikeLike
gabrielrossman
March 2, 2011 at 4:34 am
To Jenn and Noah’s points, the Council members are elected to staggered three-year terms. There are four in each cohort. There are seven officers, most of them also on a three year rotation: a secretary, and then a President-Elect, President, and Past President, and the same for VPs.
Especially given the other commitments of Council members, this creates a classic asymmetry: the staff have a potential information advantage, they can wait the Council out, and collective action in the Council is more difficult when a third of the members rotate in/out every year, and meetings are only a few times a year.
Basically, the Council is like a Board of Directors, with all of the governance problems associated with that structure.
LikeLike
thedisgruntledsociologist
March 2, 2011 at 4:49 am
More could be said, but: Several people I have talked to who’ve served on ASA Council at different times have confirmed that they don’t know or deal with ASA financials much. Publications Committee, I can say first-hand, works with zero information on the costs or revenue of ASA journals. Anybody who imagines that those in elected ASA positions run the finances of the organization is simply ignorant, but the ASA official who has the closest tie to finances is the secretary/treasurer. The committee that officially has the most knowledge of finances is the executive budget committee, but given that this committee includes, for instance, a major university president, I think it’s silly to think they are spending much time on the line-item spending of the organization.
Incidentally, it’s not like the ASA’s bad outcomes for members require “bad people” to be running the organization. I’ve enjoyed my interactions with ASA personnel. But you have a monopoly nonprofit with little oversight, no transparency, a membership that has historically shown little interest in fiscal governance, etc., in addition to a sense of self-image that involves buying into expensive K Street real estate, and, well, I’m not sure what else one expects.
LikeLike
Jeremy
March 2, 2011 at 5:16 am
@student: I’ve contacted folks at the ASA about this. No formal response yet, but one is very likely coming.
LikeLike
Shamus Khan
March 2, 2011 at 12:06 pm
I would hope that the ASA staff would be quick to respond with the easy stuff, like the recent financial statements, but I would not expect them to get back quickly on the more complicated issues. When I raised an issue with them last year, it took them five months to get back to me with a final answer. I will admit that the issue was tricky–“Did syllabus writers transfer the appropriate copyrights to have their materials sold online by the ASA?” It took them one month to get a response (“Duh, yes they did.”) Upon further prodding they explored the issue more fully, and decided that the initial answer was inaccurate. So I would credit them with a willingness to be responsive to members and acknowledge some mistakes. But no points for timeliness.
LikeLike
Neal
March 2, 2011 at 1:22 pm
I’m glad that more than one of us contacted the ASA offices about this. I think that if one change comes from this it should be increased transparency. Most sociologists had no clue that the ASA was in such terrible financial shape. We didn’t know enough to complain.
I’d like to see someone run for the ASA president position on the platform of improving the transparency of our organization. Any takers?
LikeLike
brayden king
March 2, 2011 at 1:31 pm
[…] is heartened by the response to the earlier posts about ASA finances. The discussion at orgtheory.net is particularly illuminating and […]
LikeLike
Magic! « The Disgruntled Sociologist
March 2, 2011 at 7:21 pm
That ping back (right up on top of me) links to the announcement by TDS that ASA has posted the financial statements for 2008 & 2009. I suppose we’ve finally got some evidence on which to evaluate the effectiveness of this blog-based discussion.
LikeLike
Jenn Lena
March 2, 2011 at 7:49 pm
Given the fact that there’s no “press” that we can report this to and thus easily reach members, I don’t know how else this information is supposed to be disseminated. It’s not like we would be better served by leaking the story to someone at the NYT so that all our members will read about it in tomorrow’s paper. I get the “proper channels” argument in the sense that I agree that *just* blogging about it isn’t going to do much. But how, pray tell, are people supposed to learn that they should be outraged about something and thus take it to through the proper channels if they don’t know about it in the first place? Blogs=Press=Information.
LikeLike
Andrew
March 2, 2011 at 10:00 pm
In the newly-released 2008 audit report, we can now see the details of the “interest rate swap obligation.” The definition of the obligation appears on page 11, note 6.
“In order to hedge against the effect of the floating interest rate on its long-term debt, on February 19, 2008, the Association entered into an interest-rate swap agreement, whereby, the Association had in effect ‘swapped’ its floating rate in favor of a fixed rate of 3.58%. the notional amount is $7,870,000. the agreement expires on December 1, 2037. At December 31, 2008, the fair value of the interest rate swap obligation is $1,891,706. For year ended December 31, 2008, the loss on the interest rate swap was $1,891,706.”
So this was a hedging strategy, not a speculative strategy, as a commenter on CT suggested. You can see in the 2009 audit report that this swap turned from a loss to a gain. As of the end of year 2009, the interest rate swap became a gain of $1,194,467.
Good to know.
LikeLike
brayden king
March 2, 2011 at 10:41 pm
I’ve also learned that the ASA runs and controls a whole series of the most important sociological publications. The ASA forces all authors to sign copyright assignments and then places all this work behind paywalls. Everyone — even the authors’ employers — must then pay the ASA to get access to the published work! Even ASA members need to pay more — on top of their annual dues — to get access to the ASA publications that contain their own work!
Seriously though:
I’m never surprised when the for-profit publishers resist moves toward open access publishing. There is clearly money to be made. But I’m always bugged when the professional organizations we fund with our dues — and which are explicitly dedicated to publicly promoting and disseminating the work of our field — build their business around keeping others from our work.
LikeLike
Benjamin Mako Hill
March 3, 2011 at 5:39 am
“But this is like going to the senior citizens center and finding Arcade Fire performing on the lawn.”
I totally agree!!
LikeLike
Valerie
March 3, 2011 at 3:15 pm
On a more serious note, it seems like one way for members to deal with this is to elect some representatives on the platform of increasing transparency and a hard look at ASA finances. This issue is causing a big enough stir that I think if someone ran on that platform, they would have a very competitive election. In fact, I suspect this could be the one thing that could get an elected president that is not a very senior, well-known person.
I personally don’t pay much attention to ASA elections. BUT if this were raised as a serious issue, I would sure as hell pay attention. I suspect you would get a similar reaction from many members who generally lay low but are concerned by these facts.
Any volunteers? Gabe? Kieran? Brayden? Others? I’m 100% serious. We have elected representatives, so let’s use the election process for a good reason.
LikeLike
Valerie
March 3, 2011 at 3:50 pm
Thanks to all including TDS, Jeremy, Brayden, Kiernan, Gabe and company who are looking into this. I can’t imagine why we should be so dissimilar from APSA, AEA, etc. in terms of our expenditures, professional staff size, etc. I’d be happy to vote for transparency and perhaps a different set of spending priorities.
While I’m sure that some of ASA professional staff is very good, I was rather miffed at my interactions (or lack of) with ASA staff last year regarding the online conference organization program. Several voicemails and emails went unanswered, and I got disconnected whenever I reached a live person. Not exactly the gold standard for member services.
LikeLike
cperchesk
March 3, 2011 at 9:05 pm
Oops! I accidentally hit post before proofreading. Please pardon the typos and missing words in my above post.
LikeLike
cperchesk
March 3, 2011 at 9:08 pm
[…] anyone have an update on the whole ASA-K street office-debt swap story? Anything from the ASA that they’d like to […]
LikeLike
asa finances follow up « orgtheory.net
March 22, 2011 at 12:21 am