ShareRAE spoke with John Pierpoint, NAR’s chief financial officer, about financial strategies.
Q. Is NAR better off financially today than three years ago?
As we wrap up 2012 and begin 2013 operations, NAR is in extremely strong financial condition. Reserves comfortably exceed board requirements and are invested prudently.
Although membership has declined over the past five years, NAR has delivered the ground-breaking Second Century Initiatives, which are already providing outstanding benefits to our members and will continue to do so in the future.
Q. What is the best type of budget for giving members a very clear picture of what their dues are paying for?
NAR’s budget process provide great transparency and details to the members and directors charged with its review and approval. Members that are part of the budget review process receive details on expenditures and staff support for literally hundreds of programs. Additional analytics provide insight into sources of non-dues revenue, governance activities, and committee support costs. Budget documents are posted online for state and local associations to share with their members as desired.
Q. What have been the most effective ways NAR, in the past three years, has cut costs and done more with less?
As is the case for many associations, NAR has reduced staff over the past several years, using technology to the fullest extent possible to deliver members services and benefits in the most effective way. Cost savings in NAR’s operations have been used to provide funding out of member dues dollars for the Realtors Property Resource® or RPR, now available to members across the country.
Q. Which financial documents should associations (not for profit) and MLSs (for profit) share with members or participants?
Disclosure of financial information should be driven first by legal compliance, such as public disclosure of a form 990 for tax-exempt organizations. Equally as important, members in the governance process should have access to the appropriate levels of financial information about the association to ensure that they are making decisions regarding association operations and programming with the necessary context and understanding.
Q. Have there been any significant changes in NAR budgets or its financial policy since the economic downturn (2008)?
NAR’s operations continue to provide consistent levels of member services and benefits. NAR’s directors approved a $40 dues increase effective for 2012 that is dedicated to funding the new REALTOR® Party advocacy programming. After just one year, advocacy efforts funded by these dues dollars have been extraordinarily successful in grassroots efforts across the country..