Finances and Dues
American Mensa has a significant net asset deficit, meaning we have more liabilities than assets. Specifically, our 3-5 year member fund doesn’t have as much money in it as it should. This means we incur an ongoing “opportunity cost”, meaning our investments aren’t earning as much money as they should.
We first moved from a positive net asset position to a negative one about a dozen years ago when we were pursuing trademark infringement claims against a pharmaceutical company. We neither won nor lost the court case, but we did spend close to $2m on attorney’s fees along the way.
Since that time, our net asset deficit has ratcheted up and down. Thanks to a resurgent stock market, our net asset deficit has improved from an inflation-adjusted $2m to $1.2m as of December. Each year our revenues exceed our expenses we can chip away at that deficit.
I'm not a member of the Finance Committee, but I know they have a hard job striking the right balance between strategic priorities and revenues. Declining membership makes that even more challenging as our dues revenue declines. We can prioritize deficit reduction, but that also takes away from money we could spend attracting new members and enhancing the experience of existing members. I applaud the Committee for consistently targeting modest (~$100k) in annual deficit reduction while still investing in our future.
My main concern with spending has been the 32% growth in overhead expenses per member over the last ten years. While some of that growth came from additional Foundation spending, we can’t continue to increase National Office costs in the face of declining membership (down 10%). I made a motion for the December 2020 AMC meeting to reduce overhead by around $200,000. This could have made a big difference in the funds available to market Mensa and improve member experience. While my motion was defeated, at least the proposed 2021-2022 budget did not contain an overhead increase after factoring in Foundation and Mensa International spending.
It’s evident American Mensa cannot implement another dues increase. Since our 13% increase in 2018, we lost thousands of members. Instead, we must manage our costs to ensure we can still provide needed services and attract new members. Reducing overhead and improving the way we use volunteers will be key.
For more information about my thoughts on various Mensa issues, please click here: