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Organizational Insights #1: The NFA’s Financial Realities

Sep 16, 2021, 10:00 AM by National Flute Association


by Jenny Clarke, NFA Executive Director

There has been a lot of conversation lately about NFA finances, particularly in relation to the cost of NFA conventions. In response to a request for more information and in the interest of transparency and clarity, I’ve created a blog series that aims to share some crucial information as a starting point in a deeper discussion with our members. The blog series kicks off with an exploration of NFA’s general financial reality, followed by a post about the convention hotel selection process and a piece about the NFA endowment.

Like many non-profit arts organizations, the NFA suffered a monumental financial blow as a result of the pandemic. The organization faced the loss of a convention and 40% of its income. Unlike many other organizations, the NFA does not have a history of receiving foundation or government grants, which have helped sustain many organizations during this time. Government PPP loans received later in 2020 and in 2021 have helped sustain our organization ($72,000 in 2020 and $59,100 in 2021). 

In 2019, before COVID, the NFA’s budget was just over $1m. In 2020 the budget was reduced to $600,000, and it has been sustained at that level in 2021. In addition to lost projected convention revenues, the NFA lost 95% of its income from sponsors and exhibitors and a significant amount of income from advertising.

As a result of these income losses, the NFA implemented several salary reductions, cut the position of convention director, a key position in the organization, and stopped printing The Flutist Quarterly. The executive director also left the organization, followed by the publications director. The organization faced many challenges through 2020 into 2021.

Since January 2021, when I joined the organization, I’ve approached NFA’s financial realities with the following questions:

  • How can we honor Jennifer Grim’s vision for the 2021 Convention in the best possible way?

  • How can we provide an exemplary online convention experience for our members?

  • How can we continue to pay the staff and continue to function?

  • How can we end the year without a deficit without further diminishing the endowment?

  • How can we honor our commitments to commissioned composers and competition winners?

  • How can we restore staffing to pre-pandemic levels so that we can facilitate an in-person convention in 2022?

  • How can we change the model so we can start raising money from grants to diversify income sources for the organization’s security and to reduce reliance on our members and commercial sponsors?

During the past eight months, I have attempted to address these issues and rebuild some of these losses so that we can continue to present programs and restore our staff positions in the fall of 2021 and into 2022. 

NFA Income Snapshot FY2021
(Summarized as a guide)

Convention registration:  $150,000
Competitions:  $  25,710
Contributed income:  $144,100
Membership dues:  $200,000
The Flutist Quarterly:  $  55,000
Misc. income such as hosted e-blasts:   $  27,200
Total:  $602,010
 

Convention Costs
In recent years, a live NFA convention has cost approximately $650,000 (including staff). The cost of the 2021 convention was approximately $250,000 in direct costs (including staff but not including any ongoing expenses such as costs related to The Flutist Quarterly, website and membership software costs, insurance, rent, health benefits, etc.). Direct convention expenses of the virtual convention in 2021 included (additional categories apply for live conventions): 

  • Technical costs of the online platform and Zoom

  • Video production

  • Accompanists’ fees

  • A portion of staff costs budgeted conservatively at 70% of positions working directly on the convention during the current fiscal year (Jan.–Dec.)

  • Competition prizes

  • Commissions of new works

The NFA staff has worked on the 2021 convention for more than two years. The number above only reflects a conservative portion of the 2021 salaries. In reality, it’s much higher and crosses several fiscal years.

The NFA convention would cost two or three times more if it wasn’t for the hundreds of hours of volunteer time donated by the Program Chair and Assistant Program Chair and hundreds of volunteers and unpaid interns.

Convention Income 2021:
(Summarized as a guide)

Registrations: 62% 
Donations:  27%
Competition income:  10%
Exhibitor fees & ads:  1%
 

Convention registration fees this year were $180 for NFA members for the 4-day convention at the early bird membership rate and $95 for students. Single-day registrations were also available. Tickets for Youth Flute Day were $30. 1,100 flutists registered, and approximately 65 full registration scholarships were awarded. This year, attendees did not have to pay for hotels or travel, which usually costs more than $1,000 on average, making the convention accessible to those who ordinarily can’t afford to attend and to those who have travel and accessibility needs.

Presenting a live convention for 2,000+ attendees is complex and costly. Attending can be expensive as well. The NFA’s goal for the future is to continue to look for new revenues to keep costs down and to ensure that the content and networking opportunities presented at the convention continue to provide significant value to our members.

I’m optimistic about our ability to recover and, eventually, to grow. The NFA staff are here to facilitate the work and well-being of our amazing flute community. I feel strongly that together we can create a path to a more financially equitable future that also safeguards the financial security of the organization and honors our legal and fiduciary responsibilities.

For more information, please see Rebecca Johnson’s upcoming blog post on the thinking behind convention hotel bookings and the forthcoming third post in this series, about the NFA endowment.

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