Financial Updates and Reserve Fund Analysis
Interim financial updates and 2024 budget insights presented by Kevin J. Prior, CFA, CPA for Alcoholics Anonymous. Explore the reserve fund ratio, rollforward since 2020, reduction in funding, and funding allocations for Grapevine operations. Gain valuable insights into the organization's financial standing and future plans.
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Presentation Transcript
ALCOHOLICS ANONYMOUS ALCOHOLICS ANONYMOUS INTERIM FINANCIAL UPDATES INTERIM FINANCIAL UPDATES AREA ASSEM AREA ASSEMBLIES 2024 (POST 74 GSC) 2024 (POST 74 GSC) BLIES PRESENTED BY PRESENTED BY KEVIN J PRIOR, CFA, CPA KEVIN J PRIOR, CFA, CPA alcoholic) TRUSTEE AND TREASURER GENERAL SERVICE BOARD OF AA GENERAL SERVICE BOARD OF AA CLASS A (non CLASS A (non- -alcoholic) TRUSTEE AND TREASURER
TOPICS TOPICS 1. 1. RESERVE FUND RESERVE FUND 2. 2. 2024 BUDGETS 2024 BUDGETS 3. 3. CONTRIBUTIONS CONTRIBUTIONS 4. 4. 2023 AUDIT RESULTS 2023 AUDIT RESULTS 5. 5. 2 2nd QUARTER FINANCIAL RESULTS (SEPARATE DECK) RESULTS (SEPARATE DECK) 6. 6.Q&A Q&A nd QUARTER FINANCIAL
RESERVE FUND RESERVE FUND
RESERVE FUND RATIO RESERVE FUND RATIO NUMBER OF MONTHS COVERAGE NUMBER OF MONTHS COVERAGE 1999 1999 2024 2024 11.9 11.6 11.4 11.3 11 11 11 10.9 10.2 10.3 9.8 9.7 9.5 9.5 9.5 9.5 9.4 9.2 9.1 8.7 8.5 8.4 7.9 7.3 7.3 6.3 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Reserve Fund Reserve Fund Rollforward Rollforward Since 2020 Since 2020 GROSS RESERVE NET RESERVE BEGINNING BALANCE (1/1/2020) $ 17,678,273 $ 16,204,773 EARNINGS (2020 2023) 676,089 676,089 REDUCTION IN FUNDING PERCENTAGE OF AAGV SUBSCRIPTION LIABILITY (2021 2024) COVID WITHDRAWAL (2020) (933,500) 0 (4,000,000) (4,000,000) REINVESTMENT (2021) 250,000 250,000 GRAPEVINE APP BUILD (2023) (500,000) (500,000) GRAPEVINE FUNDING YEAR 3 FUNDING OF 5-YEAR PLAN (2024) WORKING CAPITAL GSB/AAWS (2024) (564,652) (564,652) (500,000) (500,000) ENDING BALANCE (2/1/2024) $ 12,106,210 $ 11,566,210
1. 1. Reduction in GV Funding Percentage Reduction in GV Funding Percentage if publication were wound down, only about 34% of publication were wound down, only about 34% of unearned subscription revenue would be needed to unearned subscription revenue would be needed to fulfill those remaining Grapevine issues fulfill those remaining Grapevine issues 2. 2. Reduction in GV Funding percentage funded Reduction in GV Funding percentage funded operating shortfalls during the transition to the operating shortfalls during the transition to the digital app digital app 3. 3. 2024 funding for GV operations in line with 2024 funding for GV operations in line with Grapevine 5 Grapevine 5- -year plan 4. 4. $500k for AAWS/GSB finances increases in $500k for AAWS/GSB finances increases in publications inventory 2022 publications inventory 2022- -2023 and eliminates delinquencies in payables to vendors delinquencies in payables to vendors if year plan 2023 and eliminates
WHEN CAN RESERVES BE REBUILT? WHEN CAN RESERVES BE REBUILT? JAN 2024 SHOULD BE THE END OF THE DRAW JAN 2024 SHOULD BE THE END OF THE DRAW CYCLE. CYCLE. YEAR 4 (2025) OF GRAPEVINE PLAN IS CASH FLOW YEAR 4 (2025) OF GRAPEVINE PLAN IS CASH FLOW POSITIVE POSITIVE AAWS/GSB STABLE AAWS/GSB STABLE NO ADDITIONAL DRAWS EXPECTED OR PLANNED NO ADDITIONAL DRAWS EXPECTED OR PLANNED RESERVE PLANS CAN NOW INCLUDE EXPECTED RESERVE PLANS CAN NOW INCLUDE EXPECTED REVENUE FROM PLAIN LANGUAGE PUBLICATION REVENUE FROM PLAIN LANGUAGE PUBLICATION
2024 BUDGETS 2024 BUDGETS
AAWS/GSB REVENUE DISTRIBUTION (2018 2024) (Dollars in Millions) 18.0 16.9 16.0 14.6 14.4 14.2 14.0 12.0 11.7 12.0 10.8 10.5 10.5 10.3 9.5 10.0 9.4 9.1 8.9 8.5 8.4 7.8 8.0 6.8 6.6 6.3 6.0 4.9 4.0 2.0 0.0 2018 2019 2020 2021 2022 2023 2024 Budget Gross Literature Sales Gross Margin Contributions 8
CONSOLIDATED (GSO + GV) OPERATING EXPENSES 2023 FINANCIAL STATEMENT EXPENSE CATEGORIES PERCENTAGE BREAKDOWN All Other 4% Printing 3% Travel and Meetings 10% Facility and Equipment 11% Salaries 46% Data, Automation and Website 3% Professional Fees 10% Payroll Taxes and Employee Benefits 13%
AAWS/GSB AAWS/GSB Contributions are budgeted at the same level as 2023 budget, though total contributions for 2023 were 4% above this level; Gross literature sales assume the same volume of sales as 2023, with only the full-year impact of the 2023 price increase favorably impacting revenue. There is NO revenue budgeted from any titles approved at the 74thGSC. A slight positive margin before depreciation, which is a non-cash expense. Expense growth was carefully managed via an iterative budget process with more than 6 versions, in which the final version included 6% lower expenses than the initial version. The AAWS Board and Trustees Finance and Budgetary Committee, along with GSO Staff met extensively over the last four months to collaborate in making these reductions.
AA GRAPEVINE AA GRAPEVINE In response to the need to migrate from a print subscription model to a digital subscription model, the AAGV Board developed a 5-year plan (2022 2026) that was reviewed by the Trustees Finance and Budgetary Committee at its January 2023 meeting. Grapevine s 2023 results (Year 2) and 2024 Budget (Year 3) are in- line with this plan. Accordingly, years 2 and 3 called for capital and operating investments into Grapevine operations and in building the Grapevine and LaVi a apps. Years 4 (2025) and 5 (2026) of the plan call for Grapevine to be cash flow positive. LaVi a expenses have been reduced and the net shortfall covered by the General Service Board has been reduced from $755,749 in 2023 to the 2024 budgeted level of $569,511 a drop of nearly $200,000.
CONTRIBUTIONS CONTRIBUTIONS
GRATITUDE GRATITUDE 7 7TH TH TRADITION TRADITION
7 7TH TH TRADITION SELF TRADITION SELF- -SUPPORT SUPPORT 2013 2013 2023 2023 12,000,000 10,841,419 10,775,871 10,548,525 10,256,687 10,000,000 8,863,480 8,385,009 8,049,452 7,934,869 8,000,000 7,154,146 6,898,068 6,000,000 4,000,000 2,000,000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
GROWTH OF ON GROWTH OF ON- -LINE CONTRIBUTIONS LINE CONTRIBUTIONS 2013 2013 2022 2022 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Mail Online A mail contribution costs $5.60 to process. An online contribution costs $2.93 to process, a $2.67 savings. 15
CONTRIBUTIONS BY TYPE OF CONTRIBUTOR (2023) CONTRIBUTIONS BY TYPE OF CONTRIBUTOR (2023) Individuals; $3,540,104; 32.7% Groups; $5,950,279; 54.9% Other Orgs; $496,604; 4.6% Areas and Districts; $594,429; 5.5% ICGOs; $260,604; 2.4% Groups ICGOs Areas and Districts Other Orgs Individuals 16
Group Contributions by Group Contributions by V Value (2023) 16000 alue (2023) / 13,862 14000 12,608 12000 10000 8000 6000 5,175 3,500 4000 3,409 2000 1,427 973 466 337 241 223 134 121 0 $0 - $50 $50 - $100 $100 - $150 $150 - $200 $200 - $300 $300 - $400 $400 -$500 $500 - $600 $600 - $700 $700 - $800 $800 - $900 $900 - $1,000 1,000 + Number of Contributions
2023 AUDIT RESULTS 2023 AUDIT RESULTS New auditors in 2023 per 5-year rotation schedule Unmodified or clean audit opinion on the Consolidated Financial Statements The financial statements are fairly stated in all material respects. All records and information requested were freely available for inspection. BDO noted that they received full access to all information requested while performing the audit, and acknowledged the excellent cooperation extended by all levels of GSO and GV personnel throughout the course of the work. Recognition of Value of Donated PSA airtime -- $33 million in 2022, $17 million in 2023. To be recognized annually going forward. Not recognizing the value was considered a significant deficiency. 1 control deficiency (100 contributions occurring in 2024 were recorded in 2023) 6 recommendations (1 HR, 3 GV, 1 Intercompany, 1 GSB) compared to 5 in 2022
THANK YOU THANK YOU
