The Direct Marketing Association recorded a deficit of nearly $4 million for the fiscal year ended June 30, 2009, according to newly available Internal Revenue Service documents. During the previous year, the organization’s deficit was $2 million.
According to the organization’s form 990 for the year ending June 30, 2009 – the most recent available – the DMA’s total revenue fell 23.4%, from $39.3 million for the year ending June 30, 2008 to $30.1 million. During the same period, its expenses fell as well, but only by 17.5%, from $41.3 million to $34.1 million. The DMA’s expenses recorded in the IRS filings include a staff level roughly twice its current size of under 70 individuals.
Membership revenue dropped from $15.7 million to $13.1 million – a 16.9% decline. But the DMA’s program services intake fell from just under $23 million to $16.4 million – a 29.3% drop. Within that category, meetings and conference revenue dropped 25%, from $16.9 million to $12.6 million.
Bob Allen, the DMA’s interim president and CEO, observed that “2009 was probably the most challenging year most businesses have seen in the last century.” Allen, who took over for former president and CEO John A Greco in February of this year, was not running the DMA during the time covered in its filing. But in his five months at the DMA’s helm, his mandate has included scaling the organization’s operations to a size that reflects its budget.
The DMA has also consolidated its New York and Washington DC offices. In New York, it leased out almost all of one of the two floors it rents, with the majority of the space snapped up by customer relationship firm Merkle, according to Allen.
David S. Williams, president and CEO of Merkle, sits on the DMA’s board.
But there were other expenses as well. Allen attributed roughly 60% of the loss to contributions to the DMA’s profit-sharing plan, with the other 40% the result of operational costs.
These losses are also reflected in the association’s end-of-year net assets, which plummeted from $9.5 million for the year ended June 30, 2008 to $4.1 million for the year ending June 30, 2009.
The DMA is still closing its books for the fiscal year which ended two weeks ago, but Allen acknowledged it will show another loss, although it will be “nowhere near the deficit seen in the last few years.” He added that the company’s assets would be enough to cover the loss.
Allen was more sanguine about the association’s current fiscal year. He projected a positive net for the 2010-2011 period. Of late, the organization’s finances have been stronger than in recent years, he added. Membership is projected as stabilizing, and early indications are that the upcoming annual conference in San Francisco will show gains from recent levels.
“We closed our first early bird attendance [sales],” Allen said.” The DMA has recorded $750,000 in registration fees so far – 30% higher than this time last year for the fall 2009 conference in San Diego, he added.
Education revenue is also picking up, and now amounts to the low-seven-digits, in terms of dollars. Granted, this is a comparatively small portion of the organization’s revenue stream.
“As things start to rebound, the first thing to come back is education,” Allen observed. “We are now starting to see the rebound in the annual conference.
There were other notable items in the DMA’s filing aside from numbers. According to supplemental notes attached to its financial documents, the organization did not have a conflict of interest policy, a whistleblower policy or a document retention and destruction policy in place as of the end of the financial year covered in the papers. But all of these policies were adopted and ratified by the DMA’s board of trustees during the board’s February 2010 meeting – the first one held after Greco left the organization nearly six months before the end of his contract.
Greco’s salary in the year ending June 30, 2008 was $720,671, with an additional $117,857 in ancillary compensation for total of $838,528. During the year covered in the most recent IRS filings, Greco’s salary fell to $577,052, while his additional compensation was $125,810, for a total of $702,862.
