Dear Quota Members,
One hundred years ago, Wanda Frey Joiner, along with four dedicated female professionals in Buffalo, New York, USA, gave birth to the first service club for women. They named their service club Quota. That one club in one state in one country grew into an international network that today engages women, men, and youth in active community service in 14 countries.
As Quota International celebrates its first 100 years of serving our world, our organization faces a fiscal crisis. As I first reported to you in my Convention 2018 Installation speech, the time has come to put Quota’s financial house in order, and that has been your Board’s most pressing goal since taking office three months ago.
In recent President’s Messages, I have reported to you some steps that your Board Members have taken in order to immediately reduce staff and operating costs and increase support to the organization through the use of volunteer assistance. You know that we have a new Interim Executive Director in place who is working in close partnership with us. And today, as promised, we have published all Audit Reports for Quota International and the We Share Foundation for these Quota fiscal years: 2015-2016, 2016-2017, and 2017-2018. You can access these reports online, and note that we have a special e-mail address where you can send your individual questions: firstname.lastname@example.org.
As you will see from our financial reports, and what your Board Members have learned occurred financially subsequent to the 2018 Audit Report, Quota International and the We Share Foundation have not been living within its income in recent years. Why did this situation occur?
FIRST, Quota’s expenses increased between May 1, 2014, and September 30, 2018, because of routine cost-of-living increases and increases in the cost of outside services including accountants and Web site and database developers. In addition, Quota conventions in recent years were more expensive than in the past primarily due to the inclusion of additional food events – receptions, breakfasts, lunches, and dinners. For example, at the recent 2018 convention in Washington D.C., meals alone cost $170,000. Club advance convention fees and member registrations were insufficient to cover these and other convention costs.
SECOND, Quota’s income decreased each year for two reasons. First, fundraising from Quota members, which had been a major source of revenue in the past (close to $150,000 annually) dropped off to a low in the 2017-2018 fiscal year of $38,600. Second, membership has continued to slowly decline resulting in an $85,000 overall reduction in income from 2013 to 2018. In addition, during this most recent four-year period, monies set aside for other purposes were used for funding operating costs.
THIRD, Although securing outside funding from corporations, foundations, and nonprofits was a goal, only one $10,000 grant was received in the past five years for a project that was not successfully completed and, therefore, is owed back to the donating organization.
FOURTH, Quota staff turnover between 2013 and 2018 occurred at a much higher rate than in previous years therefore requiring continual retraining and education about all things Quota, especially in the area of finances. Multiple bookkeepers/accountants have been used in recent years, and of course, when a company or a staff member is new, they lack knowledge that years of experience brings.
FIFTH, Continual delays in receiving reports needed to fully understand the organization’s financial situation, for whatever reasons, made monitoring Quota’s financial realities difficult.
What is the bottom line of these realities? Quota’s future is precarious at this particular time. Because our membership numbers dropped and donations fundraising dropped off, Quota’s reserves were used over the past four plus years, from May 2014 to September 2018, to make up the shortfall between income and expenses. None of our reserves remain.
What steps are your Board Members taking to turn this financial situation around?
STEP ONE: First, the Quota International Board of Directors has voted to sell Quota International’s office space, which it owns. Our space is composed of four separate office suites on the main level of a charming “brownstone townhouse” in the Dupont Circle part of Washington, D.C. The building houses a combination of business, retail, and residential condominium suites. Currently, two of Quota’s four suites are rented to other tenants. The purposes of selling all suites are (1) to obtain new capital for paying off Quota debts, (2) to ensure continuation through this fiscal year during this time of change, and (3) to provide a new reserve for the organization going forward. The cost of owning and maintaining Quota’s office space is very expensive and is no longer affordable. There are many fixed costs that must be paid even though the organization is operating with a greatly reduced staff. A real estate appraisal has been done and as soon as the report is received and a sales price is agreed upon for each of the four suites, they will go on the market. I will publish the link to Quota’s listing in a future President’s Message.
Do Board Members possess the right to make the decision to sell Quota’s office space without a vote by Quota’s voting delegates? According to Parliamentary Law, the answer is yes. While Quota Bylaw Article VIII, Section 2b indicates that the Board of Directors does not have the authority to expend or dispose of more than $25,000 on any single capital item without the approval of the Convention body, Quota’s Articles of Incorporation (also known as Quota’s Charter) provide in Article Third, Section E, that the corporation has full authority to”…convey, exchange, lease, mortgage, encumber, transfer upon trust or otherwise dispose of all property, real or personal.” Under Parliamentary Law, Quota’s Charter takes precedence over Quota’s Bylaws when they conflict; therefore, because of the fiscal emergency that has presented itself, your Board of Directors has voted to sell all four Quota office suites.
Where will Quota staff work once all office space is sold? Our slimmed down staff team will move to a small rental office suite in the Washington, D.C. area. We are looking at different options for space and will make a determination closer to the time that our space actually sells.
Why not just move Quota to a different geographical location where rents might be cheaper? First, we anticipate that our rental space will cost significantly less than the combination of costs incurred because of owning our current Quota office space. Second, if Quota moves to a new geographical location, you will lose a major asset at a critical time – Quota’s “Brain Trust” – our small but dedicated and mighty staff.
STEP TWO: The second step your Board is taking to turn this financial situation around is a second kind of downsizing – of Quota’s Bylaws and Rules of Procedure. Our laws are extremely prescriptive and are expensive and labor intensive to operate. Over the next two years, prior to Convention 2020, the Board of Directors will lead an effort on creating a new suggested set of Quota International Bylaws that will increase the flexibility of clubs, eliminate prescriptive rules that are expensive or even not possible to follow in these fiscally difficult times. Voting delegates will discuss and vote on the proposed Quota International Bylaws at Convention 2020 in Grand Rapids Michigan, and so I encourage every club to begin planning now for your delegate’s participation.
STEP THREE: I am asking you to join me in donating to the Wanda Frey Joiner Development Fund as a show of faith in our future. We now need to build a safety net to ensure a sufficient cash flow to get through this transition period until our office space sells. Once we are successful in selling our space, we will be re-positioned to move forward in a new, simpler, and downsized way. In the coming week we will be sending out an appeal to all members, and I hope you will choose to invest in Quota’s second century of service with your financial gift.
In closing, I will let the facts stand on their own and not make judgments that I cannot attest to. While I understand that it is tempting to want to lay blame on a single individual or group of individuals, I ask that instead you join your Board in moving forward as we create a bright new future for our beloved Quota.