Questions from the President concerning: NCMA CHAPTER REBATE POLICY

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Questions from the PresidentconcerningNCMA
CHAPTER REBATE POLICY

• Board of Directors Meeting
• 22 November 2008
• Bethesda, MD

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ISSUE Should NCMA continue to invest gt
100,000 in chapters each year via Chapter
Rebates?

• Chapter rebates are paid at 10 per member not
  to exceed 100 members or 1000
• Contingent upon their completion of Annual
  report, financial report and audit, leader
  rosters
• This allocation method is not based on needs or
  on any strategic agenda
• Many Chapters have significant cash available,
  and have capacity and demonstrated ability to
  earn revenues. (Chapter Size is not an qualifier)

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BACKGROUND

• Prior to 2002 chapters received an annual member
  rebate based on 10 per member. Hence a chapter
  with 400 members received a 4000 rebate and a
  chapter with 50 members received a 500 rebate.
  The intent of this program was to facilitate
  Chapter motivation in retaining and recruiting
  current and new members.
• In 2002 as a result of financial conditions,
  National limited annual rebates not-to-exceed the
  first 100 members equating to 1000.
• It should be noted that due to the lack of
  communication and miscommunication, during this
  transition there were rampant rumors that
  National was going to raid Chapter treasuries.
  This did not occur. It should also be noted that
  those Chapters whos rebates were significantly
  cut, their operations did not implode nor did
  they fail to continue to offer programs to their
  members. Chapter business kept going on as
  usual.

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FINDING

• The Chapter Development Committee (CDC) has
  discussed this issue and based on our analysis of
  the Chapter Cash Balances report prepared by the
  NCMA CFO, has determined that the majority of the
  Chapters generate sufficient Revenue such that
  their year end cash balances are sufficient for
  ongoing operations and do not warrant the need to
  receive cash rebates from National.

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CHAPTERS lt 100 MEMBERS (2007 DATA)
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CHAPTERS 100-200 MEMBERS (2007 DATA)
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CHAPTERS gt200 MEMBERS (2007 DATA)
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RECOMMENDATION

• The CDC presents the following recommendations
  for more
• effective application of NCMA's assets in regards
  to supporting
• its chapters. Our recommendation is broken out
  into 4 key
• elements
• Guiding Principles
• Communication Plan
• Qualification Criteria
• Application Process

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GUIDING PRINCIPLES

• We want to insure that those Chapters that need
  the cash the most receive it.
• We want to insure that any chapter who has a
  valid business reason for financial assistance
  will continue to have the opportunity to receive
  it.
• We want to promote the business concept of
  National realizing the greatest ROI of utilizing
  their cash.
• We will establish a process that is simple,
  efficient, consistent, and with minimal
  oversight.

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COMMUNICATION PLAN

• We believe that most chapters with cash will
  admit that the annual 1000 rebate is not needed.
  
• We need to make it clear that those Chapters who
  demonstrate that their survival and viability is
  dependent on financial assistance from national
  will continue to receive financial assistance.
• We must insure that the chapter leadership does
  not perceive this action to be a message
  that National wants to "kill" chapters by
  curtailing their funds
• We must make it clear that we are NOT raiding
  chapter treasuries. 

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COMMUNICATION PLAN

• The overriding message is that NATIONAL CARES.
  
• We want to insure that Chapters remain vibrant
  and effective.
• We want to insure that current chapter rebate
  budgets are earmarked as discretionary funds
  available to assist the chapters for
• Start-up and recovery chapters.
• Leadership Development Scholarships
• Educational programs
• There has got to be a WIFM (Whats In It For
  Me) in the message for the Chapters. 
• Fostering the notion of Chapter Brotherhood by
  helping your fellow Chapters who need help the
  most.
• Recognizing and rewarding those Chapters who run
  effective business operations that generate
  revenue and are able to be cash positive.

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COMMUNICATION PLAN

• When, where and how to communicate the REBATE
  change.
• Send out Survey to Chapter Presidents and ask
  their opinion.
• Present at January Leadership conference.

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QUALIFICATION CRITERIA

• Prior year annual chapter report is on file with
  National
• lt3000 in total cash assets (THIS IS NOT
  FINALIZED)
• Plan for utilizing financial grants
• Specific Events
• NES
• Audio seminars
• Student Outreach
• Upfront deposit for educational event
• Purchase Chapter Asset
• Projector
• Laptop
• Participation Leadership Summit, World Congress
• CMLDP participation
• Scholarship for student
• Note Financial Assistance is not to be used to
  subsidize meals.

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APPLICATION PROCESS

• Statement of Need
• Narrative request in annual report
• Goals and plans for coming year.
• Projected cash flow plan (see BG model)
• Prior year financial data submitted
• Statement of Success of utilization of prior year
  financial assistance. (If applicable.)

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OUTSTANDING ISSUES

• Does the CDC establish sub-committee to review
  Financial Grant Applications?
• Does this sub-committee control how the 100,000
  is spent?
• Assuming the budget is 100,000 how should this
  be allocated?
• X of total budget for Chapters who meet the
  criteria in 3 above
• X of total budget for discretionary allocation
  for chapter start up and/or rescue
• X of total budget for financial assistance for
  chapter leaders to attend January/June Leadership
  conference.
• X of total budget for Leadership Development
  Scholarships

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OUTSTANDING ISSUES

• Are financial grants to chapters based on
• per head not to exceed X
• Fixed amount? 1000
• Tiered fixed amount based on of members
• amount requested in annual report not to exceed
  fixed amount.
• When is the time frame for submitting Financial
  Grant requests?
• Anytime throughout the year
• Once a year, deadline 1 October
• Twice a year
• 1 October
• 31 January

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OUTSTANDING ISSUES

• Currently the Rebate is the carrot for
  chapters to submit their annual reports. What is
  the value to National to receive financial
  reports?
• Do we put a minimum bounty on these 250?
• The Chapter has a fiduciary responsibility to
  turn in their reports. We will make it clear that
  just as compliance and ethics applies to their
  every day job, so too it applies to managing the
  chapter.