2018 Operating Plan and Budget

Transcription

1 2018 Operating Plan and Budget Presented to Governing Council September 2017 Page 1

2 Table of Contents Page 3 Page 5 Page 11 Page 14 Page 16 Page 18 Page 23 Page 26 Page 29 Page 32 Page 35 Page 38 Page 41 Page 44 Page 47 Page 50 Page Operating Plan and Budget Overview Strategic Plan and 2018 Themes Operating Plan and Budget Financial Philosophy and Reserves Business Lines Member Retention Credentialing Knowledge Products Chapter Leadership Volunteer Leadership External Relations National Events International Business Development for Members Corporate Operations Capital Expense Budget Depreciation Schedule Page 2

3 2018 IREM Operating Plan and Budget Presented to Governing Council September 2017 The 2018 operating plan and budget were developed by the IREM Headquarters staff with guidance and direction from and thorough review by the officers and senior vice presidents and subsequent unanimous approval by the executive committee. The operating plan and budget were driven by an organizational commitment to growing the membership base, attracting the nextgeneration workforce, and positioning IREM as a relevant force in the real estate management space all consistent with the strategic plan. The budget is organized around 10 business lines, each comprising related programs and product lines, which enable the evaluation of program effectiveness and performance and reinforce accountability. While incorporating investments for the future, it is respectful of and complies with the organization s reserve policy. Highlights from 2018 Operating Plan and Budget An overview of each business line is presented with this document, with details about budget changes or tactical plans incorporated into the 2018 operating plan. Here are some of the high-level highlights of the 2018 operating budget, essentially a break-even budget that incorporates: Operating income of $12,887,292 up 4.9% over the 2017 year-end forecast of $12, Operating expenses totaling $12,869,802 also up 5.3% over the 2017 year-end forecast of $12,225,993 Net operating income from operations of $17,490 Cash contribution to reserves of ($240,360) reflecting the use of excess reserves in 2018 but still well within IREM s reserve policy A slight increase in depreciation from $180,685 to $202,386, resulting from capital expenses budgeted in 2018 An increase in U.S. membership dues of 2.8% to $7,038,506 representing 54.6% of the total operating income budget and reflecting growth in overall membership counts and an increase in CPM dues (from $565 to $575), ARM and Associate dues (from $220 to $225), ACoM dues (from $200 to $225), and AMO Headquarters dues (from $475 to $490) An increase in international membership dues of 19.1% to $423,950, based primarily on membership growth coupled with some increases in member dues in certain markets Page 3

4 A combined U.S. and international membership count of 21,199 by year-end 2018, reflecting 3.7% membership growth and CPM growth of 1.8%, achieved through gains in new members, reinstated members, and solid retention numbers - with 9% of all members and 15% of all CPMs coming from outside the U.S. Revenue from credentialing programs (comprising application fees, credentialing courses, exam fees) increasing by 5.1%, incorporating no increase in fees or tuitions paid by students or royalties paid by chapters and a new course being launched in 2018 targeted to entry-level commercial property managers to support the ACoM program Total credentialing course enrollments expected to surpass 6,000, with 53% of these students attending classroom courses, and the remaining 47% electing the online option Additional funds to more deeply engage young professionals, continue work in the asset management space, make headway in providing members with relevant information on technology impacting their properties and their businesses, and further enable growth in the international program A 3.7% increase in staff salaries and benefits, which is based on appropriate market-aligned salary and benefit increases, a CEO for the full year, and the addition of one FTE in the international department A capital budget of $453,250, nearly all of which is earmarked for technology including upgrades to IREM s learning management system and association management system Key Strategic Themes The strategic plan adopted by the executive committee in January 2017 for the period is the driver behind the major additions and realignments contained within the 2018 operating plan and budget. As articulated in the strategic plan, these are the major thrusts: Theme 1. Reinforce IREM s relevance to the real estate market Theme 2. Engage and empower the next-generation workforce Theme 3. Employ thought leadership to promote the brand Theme 4. Differentiate IREM members from others in the industry Major thrusts planned for 2018, including tactical plans, operating budgets, and targeted outcomes for each of these four themes are woven throughout the 2018 operating plan and budget and are highlighted on pages Page 4

5 Strategic Plan Page 5

6 2018 Themes Strategic Goal 1. Reinforce IREM s relevance to the real estate management market Enrich and broaden relationships with IREM industry Partners and other providers of products and services Building upon commercial summit as vehicle for connecting with asset managers, shift the venue in 2018 to New York City, home to majority of institutional asset managers, with the long term plan of holding this in other key markets in future years Optimize and operationalize the rebranding initiative launched in 2017 to position IREM s key product lines and their relevance to practitioners and to the corporate market Reinforce IREM s relevancy and presence as a policy advocate through expansion of Congressional in district meetings and utilizing the Federal Advocacy Board and Federal Housing Advisory Board as vehicles for connecting in Washington, DC, with key Congressional leaders, government agencies, and regulatory bodies Strengthen the value proposition of the Certified Sustainable Property certification within the real estate management industry and raise awareness of properties that have obtained the certification Invest additional resources in the international program to strengthen presence in existing markets and expand into new markets Page 6

7 2018 Themes Strategic Goal 2. Engage and empower the next-generation workforce Utilize a task force of young professionals (under 35) to establish a young professional program, with the task force articulating the program s purpose, composition, and desired outcomes Fully launch the repositioned ACoM certification program targeted to entry level commercial managers with a new dedicated course leading to the certification Release a revised RES201 course targeted to entry level residential managers; optimize the expanded capacity to deliver RES201 through a broader pool of qualified instructors resulting from 2017 instructor training Continue the 30 under 30 program to draw attention to outstanding young professionals and showcase them to position property management as a career of choice Sponsor a second year of the AMO Next Gen Leadership program, graduating the class and kicking off a class Target CPM recruitment campaigns to millennials and maximize touch points and meaningful engagements with young professionals Assess designation and certification requirements to assess relevancy and opportunities for improvements for those on the road to membership in order to enhance and encourage membership; including full review and appropriate revision of CPM exam components (CPM exam, MPSA, management plan) and their delivery vehicles Page 7

8 2018 Themes Strategic Goal 3. Employ thought leadership to promote the IREM brand Reinforce IREM s position as a resource for and about asset management through research and publishing activity, working with Dustin Read, PhD including release of comprehensive asset management publication Develop and execute on identifying a vehicle for informing members about new and emerging technology trends and resources and their impact on members businesses and the properties they are managing Reinforce and elevate recognition of IREM s best practices and leadership development initiatives Maximize utilization of the Yardi sustainability grant to position IREM as leader in sustainability education, to promote and advance the Certified Sustainable Property program, and to have a meaningful and measureable impact on energy usage Utilize an economist as a consultant to develop high level trend analysis using Income/Expense report data; analyze and assess Income/Expense Report program, including member value proposition and bottom line profitability Produce updated editions of industry recognized publications: Shopping Center Management and Leasing Community Associations: A Guide to Successful Management Page 8

9 2018 Themes Strategic Goal 4. Differentiate IREM members from others in the industry Implement full rollout of major rebranding initiative that will officially kick off in 2017 at the Global Summit institutionalizing it throughout the organization, including IREM chapters Deepen and broaden awareness of CPM members and AMO firms within the real estate owner and investor markets through implementation of intentional and intensive credential awareness strategy driven by the rebranding initiative Institute digital badging for holders of IREM credentials to reinforce the standards they uphold Conduct and publish updated CPM and ARM profiles and compensation studies and promote findings Page 9

10 2018 Themes Internal and Operational Ensure successful onboarding of new CEO Determine optimum opportunities for and execute collaboration with other commercial NAR affiliates (CCIM, SIOR, RLI, CRE) and other related organizations (e.g., CHAM, NAA, NARPM) Give intentional focus to volunteer leadership identification and development Host an in person RVP Committee meeting in Chicago Create a more clearly defined and fully transparent process for identifying and moving leaders into and up the organization Utilize support of outside speakers/facilitator for executive committee retreat to maximize outcomes Build on the success of 2017 regional meetings, assuming no co location with existing chapter signature events Conduct a thorough assessment of internal technology needs, including learning strategy and learning management system, document and content management system, and data collection and analysis system and protocols Manage the process of IREM Japan transitioning from a single chapter to three chapters within a region Page 10

11 IREM OPERATING PLAN AND BUDGET: Actual 2016 Actual 2017 Budget Forecast* 2018 Budget Variance Fav/(Unfav) 18 Budget vs 17 Forecast % Variance Fav/Unfav) 18 Budget vs 17 Forecast MEMBER RETENTION Direct Income 6,756,926 6,815,597 6,945,361 6,849,382 7,038, , % Direct Expenses (185,662) (233,429) (223,215) (233,432) (245,952) (12,521) 5.4% Direct Contribution 6,571,263 6,582,168 6,722,146 6,615,950 6,792, , % CREDENTIALING Direct Income 2,566,755 2,655,008 2,812,071 2,683,350 2,819, , % Direct Expenses (854,944) (791,834) (985,856) (882,215) (937,876) (55,661) 6.3% Direct Contribution 1,711,811 1,863,174 1,826,214 1,801,135 1,881,698 80, % KNOWLEDGE PRODUCTS Direct Income 650, , , , ,961 17, % Direct Expenses (572,829) (549,318) (636,275) (637,338) (630,143) 7, % Direct Contribution 77,193 34,062 (16,966) (39,827) (15,183) 24, % CHAPTER LEADERSHIP Direct Income 86,598 87,129 86,075 4,600 (4,600) 100.0% Direct Expenses (213,869) (210,981) (210,040) (135,763) (135,765) (2) 0.0% Direct Contribution (127,271) (123,852) (123,965) (131,163) (135,765) (4,602) 3.5% VOLUNTEER LEADERSHIP Direct Expenses (350,467) (476,372) (393,142) (403,393) (453,252) (49,860) 12.4% Direct Contribution (350,467) (476,372) (393,142) (403,393) (453,252) (49,860) 12.4% EXTERNAL RELATIONS Direct Income 276, , , , ,765 82, % Direct Expenses (312,145) (341,309) (402,475) (373,983) (671,878) (297,895) 79.7% Direct Contribution (35,296) (6,739) (4,115) 24,017 (191,113) (215,130) 895.7% NATIONAL EVENTS Direct Income 439, , , , ,100 42, % Direct Expenses (576,782) (715,752) (697,125) (708,223) (716,645) (8,422) 1.2% Direct Contribution (137,268) (165,696) (211,565) (216,481) (182,545) 33, % INTERNATIONAL Direct Income 620, , , , ,561 76, % Direct Expenses (272,537) (336,619) (400,042) (408,730) (439,672) (30,942) 7.6% Direct Contribution 348, , , , ,889 45, % BUSINESS DEVELOPMENT FOR MEMBERS Direct Income 284, , , , ,270 59, % Direct Expenses (260,602) (250,189) (277,200) (297,651) (306,056) (8,405) 2.8% Direct Contribution 23,559 50,438 48,000 35,514 86,214 50, % CORPORATE OPERATIONS Direct Income 84, , , , ,556 4, % Direct Expenses (7,757,135) (7,766,168) (8,333,934) (8,145,266) (8,332,562) (187,296) 2.3% Direct Contribution (7,672,977) (7,656,365) (8,216,404) (8,023,736) (8,207,006) (183,270) 2.3% * 6 months of actual results + 6 months of projected results Page 11

12 IREM OPERATING PLAN AND BUDGET: 2018 OPERATING RECAP 2015 Actual 2016 Actual 2017 Budget Forecast* 2018 Budget Variance Fav/(Unfav) 18 Budget vs 17 Forecast % Variance Fav/Unfav) 18 Budget vs 17 Forecast Direct Operating Income 11,765,824 12,206,720 12,561,770 12,283,962 12,887, , % Direct Operating Expenses (11,356,974) (11,671,969) (12,559,305) (12,225,993) (12,869,802) (643,810) 5.3% Net Income/Loss From Operations 408, ,751 2,465 57,969 17,490 (40,479) 69.8% DEPRECIATION _ 2015 Actual 2016 Actual 2017 Budget Forecast* 2018 Budget Variance Fav/(Unfav) 18 Budget vs 17 Forecast % Variance Fav/Unfav) 18 Budget vs 17 Forecast DEPRECIATION Direct Expenses (614,828) (462,668) (182,264) (180,685) (202,386) (21,701) 12.0% Direct Contribution (614,828) (462,668) (182,264) (180,685) (202,386) (21,701) 12.0% Net Operating Income/(Loss) After Depreciation (205,978) 72,083 (179,799) (122,716) (184,896) (62,180) 50.7% NET INVESTMENTS _ 2015 Actual 2016 Actual 2017 Budget Forecast* 2018 Budget Variance Fav/(Unfav) 18 Budget vs 17 Forecast % Variance Fav/Unfav) 18 Budget vs 17 Forecast INVESTMENTS Direct Income (80,192) 215, , , ,000 (10,000) 4.4% Direct Expenses (32,338) (16,268) (16,500) (18,340) (19,600) (1,260) 6.9% Direct Contribution (112,530) 199, , , ,400 (11,260) 5.4% TOTAL RECAP _ 2015 Actual 2016 Actual 2017 Budget Forecast* 2018 Budget Variance Fav/(Unfav) 18 Budget vs 17 Forecast % Variance Fav/Unfav) 18 Budget vs 17 Forecast Total Income 11,685,632 12,422,589 12,726,770 12,508,962 13,102, , % Total Expenses (12,004,139) (12,150,905) (12,758,069) (12,425,018) (13,091,788) (666,770) 5.4% Total Net Income/(Loss) (318,508) 271,684 (31,299) 83,944 10,504 (73,440) 87.5% * 6 months of actual results + 6 months of projected results Page 12

13 IREM OPERATING PLAN AND BUDGET: 2018 IREM RESERVE POSITION & CONTRIBUTION TO RESERVES INCOME FROM OPERATIONS X 2015 Actual 2016 Actual 2017 Budget Forecast* 2018 Budget Variance Fav/(Unfav) 18 Budget vs 17 Forecast % Variance Fav/Unfav) 18 Budget vs 17 Forecast OPERATING INCOME 11,765,824 12,206,720 12,561,770 12,283,962 12,887, , % OPERATING EXPENSES (11,356,974) (11,671,969) (12,559,305) (12,225,993) (12,869,802) (643,810) 5.3% NET INCOME/(LOSS) FROM OPERATIONS 408, ,751 2,465 57,969 17,490 (40,479) 69.8% CAPITAL EXPENDITURES (734,103) (57,882) (75,750) (63,750) (453,250) (389,500) 611.0% NET INVESTMENT INCOME (112,530) 199, , , ,400 (11,260) 5.4% CASH CONTRIBUTION TO RESERVES (437,783) 676,469 75, ,879 (240,360) (441,239) 219.7% * 6 months of actual results + 6 months of projected results Page 13

14 OPERATING STATEMENT OF INCOME AND EXPENSES (FOR FINANCIAL PHILOSOPHY) Forecast 2018 Budget INCOME (INCLUDES INVESTMENTS) Total income $11,084,483 $11,431,410 $10,842,570 $11,528,206 $11,640,217 $11,829,513 $11,685,632 $12,422,589 $12,508,962 $13,102,292 % change (YOY) 4.2% 3.1% 5.2% 6.3% 1.0% 1.6% 1.2% 6.3% 0.7% 4.7% EXPENSE (INCLUDES DEPRECIATION) Total expense ($10,633,680) ($10,896,238) ($11,285,513) ($11,425,409) ($11,492,813) ($12,255,068) ($12,004,139) ($12,150,905) ($12,425,018) ($13,091,788) % change (YOY) 9.3% 2.5% 3.6% 1.2% 0.6% 6.6% 2.0% 1.2% 2.3% 5.4% EXCESS OF INCOME OVER EXPENSE Total excess $450,803 $535,172 ($442,943) $102,797 $147,404 ($425,555) ($318,508) $271,684 $83,944 $10,504 % change (YOY) 141.4% 18.7% 182.8% 123.2% 43.4% 388.7% 25.2% 185.3% 69.1% 87.5% DEPRECIATION (ADD BACK) Total depreciation $364,132 $258,039 $602,864 $507,597 $552,230 $582,448 $614,831 $462,668 $180,685 $202,386 % change (YOY) 2.9% 29.1% 133.6% 15.8% 8.8% 5.5% 5.6% 24.7% 60.9% 12.0% CASH PROFIT FROM OPERATIONS Total excess $814,935 $793,211 $159,921 $610,394 $699,634 $156,893 $296,323 $734,352 $264,629 $212,890 % change (YOY) 210.9% 2.7% 79.8% 281.7% 14.6% 77.6% 88.9% 147.8% 64.0% 19.6% CONTRIBUTION TO RESERVES Forecast 2018 Budget INCOME (INCLUDES INVESTMENTS) Total income $11,084,483 $11,431,410 $10,842,570 $11,528,206 $11,640,217 $11,829,513 $11,685,632 $12,422,589 $12,508,962 $13,102,292 % change (YOY) 4.2% 3.1% 5.2% 6.3% 1.0% 1.6% 1.2% 6.3% 0.7% 4.7% EXPENSE (EXCLUDES DEPRECIATION) Total expense ($10,269,548) ($10,638,199) ($10,682,649) ($10,917,812) ($10,940,583) ($11,672,620) ($11,389,308) ($11,688,237) ($12,244,333) ($12,889,402) % change (YOY) 9.7% 3.6% 0.4% 2.2% 0.2% 6.7% 2.4% 2.6% 4.8% 5.3% CAPITAL EXPENSE Total capital expense ($629,875) ($898,737) ($805,067) ($284,904) ($185,649) ($239,184) ($734,103) ($57,882) ($63,750) ($453,250) % change (YOY) 20.9% 42.7% 10.4% 64.6% 34.8% 28.8% 206.9% 92.1% 10.1% 611.0% TOTAL CASH CONTRIBUTION TO RESERVES Total contribution $185,060 ($105,526) ($645,146) $325,490 $513,985 ($82,291) ($437,780) $676,470 $200,879 ($240,360) % change (YOY) 114.7% 157.0% 511.4% 150.5% 57.9% 116.0% 432.0% 254.5% 70.3% 219.7% AVERAGE CASH RESERVES VS POLICY (33.3% OF AVERAGE OPERATING EXPENSES EXCLUDING DEPRECIATION) Required reserves $3,419,759 $3,542,520 $3,557,322 $3,635,631 $3,643,214 $3,886,982 $3,792,640 $3,892,183 $4,077,363 $4,292,171 Actual average reserves $5,363,900 $5,635,589 $5,139,615 $4,755,834 $5,470,023 $5,967,678 $5,657,073 $5,938,907 $6,377,582 $6,357,841 Over (under) $1,944,141 $2,093,069 $1,582,293 $1,120,203 $1,826,809 $2,080,696 $1,864,434 $2,046,724 $2,300,219 $2,065,670 Actual reserves as % of cash expense 156.9% 159.1% 144.5% 130.8% 150.1% 153.5% 149.2% 152.6% 156.4% 148.1% Page 14

15 Cash Reserves Compliance (SOP 4.1) $7,000,000 $6,000,000 Actual average reserves $5,000,000 $4,000,000 $3,000,000 Reserve Requirement Four months average operating expenses, less depreciation $2,000,000 $1,000,000 $ Forecast 2018 Budget Required reserves $3,419,759 $3,542,520 $3,557,322 $3,635,631 $3,643,214 $3,886,982 $3,792,648 $3,892,187 $4,077,363 $4,292,171 Actual average reserves $5,363,900 $5,635,589 $5,139,615 $4,755,834 $5,470,023 $5,967,678 $5,657,073 $5,938,907 $6,377,582 $6,357,841 Page 15

16 2018 Operating Income and Expense $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $ F 2018B Direct Income $11,261,147 $11,370,490 $11,741,117 $11,765,824 $12,206,720 $12,283,962 $12,887,293 Direct Expense $10,884,570 $10,904,256 $11,631,831 $11,356,974 $11,671,969 $12,225,993 $12,869,802 Page 16

17 Business Lines IREM s operating plan and budget are organized around 10 business lines core activities represented by groups of similar products, programs, services, and revenue generating activities. Each business line is made up of a series of programs closely aligned individual products, programs, services, and revenue generating activities. 1. Member Retention comprises US membership dues, dues collection and retention activities, Associate membership, and ethics administration 2. Credentialing Programs includes all courses leading to IREM credentials, admissions administration, and marketing of credentialed membership programs and credentialing courses 3. Knowledge Products made up of non credentialing professional development courses, Journal of Property Management, publications, Income/Expense and other industry research, contract development work, webinars, forms, and all other knowledge products 4. Chapter Leadership programs and services that support US chapters 5. Volunteer Leadership programs and services that support leadership and governance activities and corporate strategy 6. External Relations contains programs and initiatives that promote IREM as an organization throughout the US and foster relationships with real estate companies, industry associations and leaders, academic institutions, government bodies, and vendors 7. National Events production and delivery of U.S. regional leadership conferences and fall Global Summit 8. International comprises all programs and activities that take place outside the US, including education, membership admissions, member service, chapter service and support, and external relations 9. Business Development for Members programs and initiatives aimed at increasing employment and business opportunities for and promote expertise of IREM s credentialed members 10. Corporate Operations contains all administrative costs of running IREM, including rent and other office expenses, finance and accounting, insurance and risk management, information technology, all salaries and benefits, contingency expense, as well as a service contract with the IREM Foundation Page 17

18 Business Line: Member Retention U.S. membership dues invoicing and collections, member retention communications and campaigns, Associate membership admissions, and administration of IREM s ethics program Programs in this business line: Dues U.S. member dues invoicing and collection for all member types, processing new emeritus members and reinstatements, NAR Institute Affiliate (IA) membership administration; expenses include member engagement communications and chapter payments for Associate dues Associates Associate Member admissions processing for U.S. Ethics legal and administrative support for oversight of IREM's Codes of Professional Ethics through the three Ethics Boards Page 18

19 Business Line: Member Retention $8,000,000 $7,000,000 $6,000,000 $5,000, Highlights Total U.S. membership anticipated to start year at 18,655 and hit 19,247 by end of 2018 Increases in member dues: CPM: from $565 to $575 CPM Candidate: $495 no change ARM: from $220 to $225 ACoM: from $200 to $225 Associate: from $220 to $225 AMO Headquarters: from $475 to $490 AMO Branch: $110 no change $4,000,000 $3,000,000 $2,000,000 $1,000,000 $ F 2018B Direct Income $6,398,083 $6,677,652 $6,704,394 $6,756,926 $6,815,597 $6,849,382 $7,038,506 Direct Expense $148,996 $141,527 $189,116 $185,662 $233,429 $233,432 $245,952 Page 19

20 BUSINESS LINE: MEMBER RETENTION Variance Fav/(Unfav) 2018 B vs 2017 F % Variance Fav/(Unfav) 2018 B vs 2017 F Program Name _ 2015 Actual 2016 Actual 2017 Budget 2017 Forecast (6+6) * 2018 Budget DUES U.S. Direct Income 6,756,926 6,815,597 6,945,361 6,849,382 7,038, , % Direct Expenses (174,099) (223,349) (209,615) (222,892) (234,352) (11,461) 5.1% Direct Contribution 6,582,827 6,592,248 6,735,746 6,626,490 6,804, , % ASSOCIATES Direct Expenses (8,353) (7,662) (10,200) (8,200) (8,400) (200) 2.4% Direct Contribution (8,353) (7,662) (10,200) (8,200) (8,400) (200) 2.4% ETHICS ADMINISTRATION Direct Expenses (3,210) (2,418) (3,400) (2,340) (3,200) (860) 36.8% Direct Contribution (3,210) (2,418) (3,400) (2,340) (3,200) (860) 36.8% Net Income/(Loss) 6,571,263 6,582,168 6,722,146 6,615,950 6,792, , % * 6 months of actual results + 6 months of projected results Page 20

21 YEAR-END MEMBERSHIP COUNTS 2017 Forecast 2018 Budget CPM U.S. 7,668 7,615 7,537 7,405 7,486 7,494 7,427 7,432 7,409 7,420 7,452 International 1,037 1,157 1,024 1,001 1,020 1,024 1,038 1,061 1,086 1,191 1,315 Total CPM Members 8,705 8,772 8,561 8,406 8,506 8,518 8,465 8,493 8,495 8,611 8,767 % Change 0.7% 0.8% -2.4% -1.8% 1.2% 0.1% -0.6% 0.3% 0.0% 1.4% 1.8% CPM approvals U.S CPM approvals International Candidate U.S. 3,326 3,087 3,139 3,037 3,244 3,173 3,020 3,037 3,114 3,207 3,326 International Total Candidate Members 3,501 3,250 3,311 3,193 3,408 3,359 3,216 3,241 3,302 3,439 3,557 % Change 5.9% -7.2% 1.9% -3.6% 6.7% -1.4% -4.3% 0.8% 1.9% 4.1% 3.4% Candidate approvals U.S. 1,261 1,051 1,057 1,065 1, Candidate approvals International ARM U.S. 2,865 2,766 2,752 2,774 2,868 3,016 3,075 3,142 3,234 3,351 3,490 U.S. Duals: ARM/CPM or ARM/Candidate or ARM/ACoM International Total ARM Members 3,704 3,631 3,669 3,624 3,787 3,948 4,019 4,076 4,219 4,360 4,527 % Change 0.2% -2.0% 1.0% -1.2% 4.5% 4.3% 1.8% 1.4% 3.5% 3.3% 3.8% ARM approvals U.S ARM approvals International Total ARM Candidates (Canada) ACoM U.S U.S. Duals: ACoM/CPM or ACoM/Candidate or ACoM/ARM International Total ACoM Members Total ACoM Candidates (Canada) Associate Members 2,210 2,058 1,918 1,909 1,779 2,561 2,892 3,110 3,322 3,555 3,808 % Change 1.1% -6.9% -6.8% -0.5% -6.8% 44.0% 12.9% 7.5% 6.8% 7.0% 7.1% Student Members Academic Members Total Members 18,467 18,131 17,890 17,493 18,008 19,041 19,215 19,497 19,809 20,452 21,199 % change 2.1% -1.8% -1.3% -2.2% 2.9% 5.7% 0.9% 1.5% 1.6% 3.2% 3.7% AMO U.S. HQs International HQs Total AMO Headquarters % Change 1.6% 1.7% 2.5% 0.0% 4.3% -1.3% 0.7% 0.5% -2.0% 0.0% 0.0% U.S. Branches International Branches Total AMO Branches Total AMO Offices 1,133 1,144 1,134 1,130 1,117 1,120 AMO approvals U.S AMO approvals International Page 21

22 Membership Dues and Fees CPM Program CPM Dues CPM Emeritus/Lifetime Dues (no new Lifetime after 2001) % change CPM International Dues (range) CPM Candidate Dues % change CPM Candidate Application Fee % change CPM Application Fee % change CPM Fast Track Fee % change ARM Program ARM Dues % change ARM/CPM/Candidate/ACoM Dues Dual Designees % change ARM Emeritus/Lifetime Dues (no new Lifetime after 2001) ARM International Dues (range) ARM Application Fee % change ACoM Program ACoM Dues % change ACoM/CPM Candidate Dues Dual Designees % change ACoM Application Fee % change Associate Member Program Associate Member % change AMO Program AMO Headquarters % change AMO Branch % change AMO Application Fee % change AMO Reaccreditation Fee B $525 $545 $545 $545 $555 $555 $565 $565 $565 $ % 1.8% 1.8% 1.8% $105 $109 - $273 $109 - $273 $109 - $111 - $111 - $ $ $ $113 - $283 $113 - $283 $113 - $283 $115 - $287 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $184 - $372 $470 $490 $490 $490 $495 $495 $495 $495 $495 $ % 1.0% $150 $150 $160 $160 $160 $160 $160 $160 $160 $ % $200 $200 $210 $210 $210 $210 $210 $210 $210 $ % $630 $630 $630 $800 $ % B $195 $205 $205 $205 $210 $210 $220 $220 $220 $ % 2.4% 4.8% 2.3% $95 $95 $103 $103 $105 $105 $110 $110 $110 $ % 2.4% 4.8% $40 $40 $40 $40 $42 $42 $44-$110 $44-$110 $44-$110 $45-$113 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $68 - $131 $75 $75 $80 $80 $80 $80 $80 $80 $80 $80 6.7% B $195 $195 $195 $195 $200 $200 $200 $200 $200 $ % 12.5% $97.50 $97.50 $97.50 $97.50 $100 $100 $100 $100 $100 $ % 13.0% $75 $75 $80 $80 $80 $80 $80 $80 $80 $80 6.7% B $195 $205 $205 $205 $210 $210 $220 $220 $220 $ % 2.4% 4.8% 2.3% B $440 $440 $440 $440 $450 $450 $475 $475 $475 $ % 5.6% 3.2% $100 $100 $100 $100 $110 $110 $110 $110 $110 $ % $405 $405 $425 $425 $425 $425 $425 $425 $425 $ % $100 $100 $100 $100 $100 $100 Page 22

23 Business Line: Credentialing Membership activities, including applications, education, exams, and services associated with earning an IREM credential (CPM, ARM, ACoM, AMO) in the U.S., including credentialing marketing, recruiting, admissions, credentialing education and exam development and delivery, instructor management Programs within business line: Classroom Credentialing Education all courses that earn credit toward the CPM, ARM, ACoM, and AMO credentials delivered in the classroom, promoted to the public, and sponsored by either chapters or IREM Headquarters Self Paced Online Credentialing Education all courses that earn credit toward the CPM, ARM, ACoM, and AMO credentials delivered online as self paced offerings Corporate and Government Credentialing Courses all courses that earn credit toward the CPM, ARM, ACoM, and AMO credentials delivered as private in house classroom offerings, online offerings, or through licensing agreements to corporate and government clients; also includes enrollments resulting from corporate MOUs and government purchasing programs in public online and classroom offerings Credentialing Exams delivery, proctoring, and processing of all credentialing exams for CPM, ARM, and ACoM, including management plans and MPSA Credentialing Content Development development of credentialing course curriculum, student and instructor materials, and examinations for all credentialing programs Instructor Management management and support of IREM instructors, including instructor recruitment and training, course assignments and scheduling, course and instructor evaluations, instructor presentation skill development all with a goal of ensuring quality classroom delivery; also includes oversight of MPSA and management plan graders to ensure grading integrity and consistency Credentialing Marketing all strategies, campaigns, and tactics for marketing credentialing courses and membership recruitment for all credentialed member categories CPM CPM candidate and CPM admissions processing ARM ARM admissions processing AMO AMO admissions processing for new AMO firms, AMO reaccreditations, and AMO firm changes ACoM ACoM admissions processing Page 23

24 Business Line: Credentialing $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $ F 2018B Income $2,447,857 $2,430,655 $2,536,825 $2,566,755 $2,655,008 $2,683,350 $2,819,574 Direct Expense $955,474 $928,477 $1,030,007 $854,944 $791,834 $882,215 $937, Highlights Roll out new ACoM course and repositioned ARM course, both aimed at attracting career entry young professionals in both residential and commercial sectors resulting in significant increase in ACoM applications Target CPM recruitment campaigns to millennials and young professionals Continue and enhance CPM sponsor and Member ROI programs Launch refreshed ETH800 course with updated videos, delivery approach Conduct comprehensive review and revision of MPSA and certification exams, including both content and delivery vehicles Develop updated CID201 course that incorporates COM/licensure course No change to course royalties or tuitions; $100 surcharge on most registrations under 30 days out from course start Assess and realign chapter sponsorship promoter model in order to increase enrollments, articulate what chapters must do to earn commission, and maximize potential for success Continue to rebate $100 per online course enrollment when registrants identifies chapter Instructor fees increased: For CPM courses: from $800 to $840 per day For RES201: from $750 to $800 per day Page 24

25 BUSINESS LINE: CREDENTIALING Variance Fav/(Unfav) 2018 B vs 2017 F % Variance Fav/(Unfav) 2018 B vs 2017 F Program Name _ 2015 Actual 2016 Actual 2017 Budget 2017 Forecast (6+6) * 2018 Budget CLASSROOM CREDENTIALING Direct Income 706, , , , ,354 31, % Direct Expenses (353,432) (235,154) (301,952) (239,102) (248,602) (9,500) 4.0% Direct Contribution 352, , , , ,752 22, % ONLINE CREDENTIALING Direct Income 1,034,957 1,163,927 1,113,649 1,187,000 1,217,000 30, % Direct Expenses (425) (1,311) (2,350) (1,350) (1,650) (300) 22.2% Direct Contribution 1,034,532 1,162,616 1,111,299 1,185,650 1,215,350 29, % CORPORATE & GOVERNMENT COURSES Direct Income 181, , , , ,000 44, % Direct Expenses (26,573) (41,547) (59,700) (42,500) (46,685) (4,185) 9.8% Direct Contribution 154, , , , ,315 39, % CREDENTIALING EXAMS Direct Income 361, , , , ,140 10, % Direct Expenses (101,941) (113,836) (94,069) (83,939) (90,922) (6,983) 8.3% Direct Contribution 259, , , , ,218 3, % CONTENT DEVELOPMENT Direct Expenses (13,268) (14,047) (60,550) (43,700) (45,907) (2,207) 5.1% Direct Contribution (13,268) (14,047) (60,550) (43,700) (45,907) (2,207) 5.1% INSTRUCTOR MANAGEMENT Direct Expenses (49,241) (28,395) (78,920) (72,620) (42,260) 30, % Direct Contribution (49,241) (28,395) (78,920) (72,620) (42,260) 30, % CREDENTIALING MARKETING Direct Expenses (261,035) (307,347) (336,000) (350,000) (406,000) (56,000) 16.0% Direct Contribution (261,035) (307,347) (336,000) (350,000) (406,000) (56,000) 16.0% CPM Direct Income 233, , , , ,500 8, % Direct Expenses (25,293) (24,855) (26,000) (26,000) (26,900) (900) 3.5% Direct Contribution 208, , , , ,600 7, % ARM Direct Income 27,123 29,612 32,680 31,500 32,680 1, % Direct Expenses (14,260) (14,676) (15,600) (15,600) (15,500) % Direct Contribution 12,863 14,936 17,080 15,900 17,180 1, % AMO Direct Income 21,600 28,000 25,100 23,000 29,500 6, % Direct Expenses (7,583) (8,384) (8,100) (4,789) (9,300) (4,511) 94.2% Direct Contribution 14,017 19,616 17,000 18,211 20,200 1, % ACoM Direct Income ,400 3, % Direct Expenses (1,895) (2,282) (2,615) (2,615) (4,150) (1,535) 58.7% Direct Contribution (1,175) (1,682) (1,735) (1,735) 250 1, % Net Income/(Loss) 1,711,811 1,863,174 1,826,214 1,801,135 1,881,698 80, % * 6 months of actual results + 6 months of projected results Page 25

26 Business Line: Knowledge Products Development, delivery, marketing, and sales of all knowledge products exclusive of credentialing courses includes classroom and online seminars, publications, JPM, Income/Expense Analysis, webinars, tutorials, news and other content, third party contract work, and industry research. Programs within business line: Non credentialing Education online and classroom courses and virtual seminars that do not earn credit toward an IREM credential Journal of Property Management published bi monthly in digital and print, IREM s primary communications vehicle, complimentary to members, some paid subscribers Income/Expense Reports five statistical reports based on operating income and expense data submitted by members and nonmembers; available in print, e book, online lab formats, by metro areas, and through corporate licenses; CPMs and data contributors receive free digital reports or pay only $50 for print copies Publications books, white papers, reports on industry specific topics, available in print and digital formats Knowledge and Content Services both for sale knowledge products and complimentary and member service products, including webinars, forms and checklists, weekly newsletter, tutorials, thought leadership Knowledge Products Marketing strategies, campaigns, and tactics for marketing of non credentialing courses, webinars, and content services Contract Work development of education curriculum or delivery of other services under third party contracts with outside organizations, such as government and NAR Page 26

27 Business Line: Knowledge Products $800,000 $700,000 $600,000 $500,000 $400, Highlights Continue focus on developing meaningful content to position IREM as a thought leader in key arenas: real estate asset management, technology, leadership, and best practices Produce new asset management comprehensive book, plus four mini books supported by continued research undertaken by Dustin Read Produce revisions of Community Association Management and Shopping Center Management books Obtain services of economist to prepare trends analysis for I/E reports Full transition out of state CE approval process $300,000 $200,000 $100,000 $ F 2018B Direct Income $707,650 $544,396 $589,151 $650,023 $583,380 $597,511 $614,961 Direct Expense $538,038 $522,266 $675,460 $572,829 $549,318 $637,338 $630,143 Page 27

28 BUSINESS LINE: KNOWLEDGE PRODUCTS Variance Fav/(Unfav) 2018 B vs 2017 F % Variance Fav/(Unfav) 2018 B vs 2017 F Program Name _ 2015 Actual 2016 Actual 2017 Budget 2017 Forecast (6+6) * 2018 Budget NON CREDENTIALING EDUCATION Direct Income 86,895 92,560 92, , ,891 (5,797) 5.1% Direct Expenses (4,208) (1,361) (11,635) (24,360) (11,810) 12, % Direct Contribution 82,687 91,199 81,124 88,328 95,081 6, % JOURNAL OF PROPERTY MANAGEMENT (JPM) Direct Income 11,178 15,795 14,403 14,403 16,250 1, % Direct Expenses (221,228) (192,290) (209,698) (212,101) (210,700) 1, % Direct Contribution (210,050) (176,495) (195,295) (197,698) (194,450) 3, % STATE CONTINUING EDUCATION Direct Expenses (7,284) (2,862) (4,000) (1,300) 1, % Direct Contribution (7,284) (2,862) (4,000) (1,300) 1, % INCOME & EXPENSE Direct Income 356, , , , ,146 7, % Direct Expenses (161,598) (133,633) (145,605) (147,502) (155,535) (8,033) 5.4% Direct Contribution 194, , , , ,611 (250) 0.1% PUBLICATIONS Direct Income 94, , , , ,674 1, % Direct Expenses (63,800) (90,791) (88,377) (89,116) (95,198) (6,082) 6.8% Direct Contribution 30,778 13,200 31,162 39,567 35,475 (4,092) 10.3% KNOWLEDGE & CONTENT SERVICES Direct Income 9,988 18,865 15,275 13,874 18,000 4, % Direct Expenses (108,526) (127,577) (164,360) (162,959) (155,300) 7, % Direct Contribution (98,538) (108,712) (149,085) (149,085) (137,300) 11, % MARKETING KNOWLEDGE PRODUCTS Direct Expenses (5,673) (422) (11,000) #DIV/0! Direct Contribution (5,673) (422) (11,000) #DIV/0! CONTRACT WORK Direct Income 91,000 58,922 20,000 7,500 15,000 7, % Direct Expenses (512) (383) (1,600) (1,600) (1,600) #DIV/0! Direct Contribution 90,488 58,539 18,400 7,500 13,400 5, % Net Income/(Loss) 77,193 34,062 (16,966) (39,827) (15,183) 24, % * 6 months of actual results + 6 months of projected results Page 28

29 Business Line: Chapter Leadership Programs and services that support chapters and RVPs in the U.S. through the local member network Programs within this business line: Chapter Support Administrative support to IREM chapters, chapter volunteer leaders, and IAEs, including IAE work group, IAE symposium, chapter recognition program, chapter president and IAE training; also includes chapter website program Chapter Presidents Subsidy financial assistance through reimbursement of airfare or other travel expense to chapters that send incoming presidents to the IREM Global Summit in Chicago in October 2017 Chapter Visits scheduling and support of and communications with IREM chapters that are visited by IREM senior leaders; approximately 40% of chapters are visited each year RVP Travel financial and administrative support for RVPs to visit chapters within their region; also includes RVP training Page 29

30 Business Line: Chapter Leadership $250,000 $200, Highlights Continued high level support of chapters and regional vice presidents, including visits to chapters by national officers and RVPs and IAE professional development Transition to third party chapter website platform completed in 2017; chapters pay website vendor directly, so no revenue in this business line $150,000 $100,000 $50,000 $ F 2018B Direct Income $71,175 $75,275 $90,365 $86,598 $87,129 $4,600 $ Direct Expense $213,237 $222,398 $210,653 $213,869 $210,981 $135,763 $135,765 Page 30

31 BUSINESS LINE: CHAPTER LEADERSHIP Variance Fav/(Unfav) 2018 B vs 2017 F % Variance Fav/(Unfav) 2018 B vs 2017 F Program Name _ 2015 Actual 2016 Actual 2017 Budget 2017 Forecast (6+6) * 2018 Budget CHAPTER SUPPORT Direct Income 86,598 87,129 86,075 4,600 (4,600) 100.0% Direct Expenses (110,203) (106,236) (108,410) (26,295) (22,635) 3, % Direct Contribution (23,606) (19,107) (22,335) (21,695) (22,635) (940) 4.3% CHAPTER PRESIDENTS SUBSIDY Direct Expenses (28,015) (23,504) (28,800) (28,800) (28,800) 0.0% Direct Contribution (28,015) (23,504) (28,800) (28,800) (28,800) 0.0% CHAPTER VISITS Direct Expenses (35,174) (38,327) (32,230) (36,268) (36,030) % Direct Contribution (35,174) (38,327) (32,230) (36,268) (36,030) % RVP TRAVEL Direct Expenses (40,476) (42,915) (40,600) (44,400) (48,300) (3,900) 8.8% Direct Contribution (40,476) (42,915) (40,600) (44,400) (48,300) (3,900) 8.8% Net Income/(Loss) (127,271) (123,852) (123,965) (131,163) (135,765) (4,602) 3.5% * 6 months of actual results + 6 months of projected results Page 31

32 Business Line: Volunteer Leadership Programs and services that support the volunteer leadership team in executing corporate strategy, leadership development, and governance activities Programs within this business line: Strategic Planning strategic planning, research, and scanning, including the annual executive committee retreat in Chicago; research to support strategic decision making and monitoring; task forces and related activities to support the execution of the strategic plan Leadership Recognition and Support identification, support, and recognition of IREM volunteer leaders; includes officer spouse travel and related expenses Committee and Board Support administrative and governance support for IREM s committees and boards, including both virtual meetings and engagement as well as in person meetings that will take place during IREM Global Summit in October Leadership and Officer Briefings meetings conducted to oversee IREM governance, onboard and train new officers, conduct briefings and other business matters; includes both virtual and in person meetings Page 32

33 Business Line: Volunteer Leadership $600,000 $500,000 $400, Highlights 2018 plan and budget calls for in person meeting with US RVPs in Chicago mid year Executive committee retreat scheduled for Chicago in January Market research to advance strategic plan initiatives included at $20,000 level Costs for committee and board support increase slightly due to staff costs in attending Global Summit outside of Chicago $300,000 $200,000 $100,000 $ F 2018B Direct Income $ $ $ $ $ $ Direct Expense $310,251 $391,589 $420,172 $350,467 $476,372 $403,393 $453,252 Page 33

34 BUSINESS LINE: VOLUNTEER LEADERSHIP Variance Fav/(Unfav) 2018 B vs 2017 F % Variance Fav/(Unfav) 2018 B vs 2017 F Program Name _ 2015 Actual 2016 Actual 2017 Budget 2017 Forecast (6+6) * 2018 Budget STRATEGIC PLANNING Direct Expenses (47,565) (105,779) (98,040) (97,662) (103,515) (5,853) 6.0% Direct Contribution (47,565) (105,779) (98,040) (97,662) (103,515) (5,853) 6.0% LEADERSHIP RECOGNITION & SUPPORT Direct Expenses (84,832) (116,923) (126,395) (130,875) (130,123) % Direct Contribution (84,832) (116,923) (126,395) (130,875) (130,123) % COMMITTEE & BOARD SUPPORT Direct Expenses (160,512) (198,757) (109,147) (121,516) (140,829) (19,313) 15.9% Direct Contribution (160,512) (198,757) (109,147) (121,516) (140,829) (19,313) 15.9% LEADERSHIP & OFFICER BRIEFINGS Direct Expenses (57,557) (54,913) (59,560) (53,340) (78,785) (25,445) 47.7% Direct Contribution (57,557) (54,913) (59,560) (53,340) (78,785) (25,445) 47.7% Net Income/(Loss) (350,467) (476,372) (393,142) (403,393) (453,252) (49,860) 12.4% * 6 months of actual results + 6 months of projected results Page 34

35 Business Line: External Relations Programs and initiatives that foster external relationships with real estate management companies, industry associations and leaders, academic institutions, government bodies, and vendors Programs within this business line: Corporate Outreach participation in industry and corporate events and tradeshows, attendance at NAR national meetings and participation in NAR committees, Commercial Summit, and business development initiatives directed toward corporate and government clients Academic, Young Professional, Diversity Outreach three outreach programs: (1) academic outreach to colleges and universities, academic MOUs and advisory board roles, student and academic membership programs (exclusive of dues revenue), career support materials, and support of chapter college outreach programs and IREM student clubs through program overseen by Student and Academic Advisory Board; (2) diversity outreach to attract and engage an ethnically diverse market to IREM through Diversity Advisory Board; and (3) young professional outreach, aimed at attracting and engaging young property professionals (under 35) to IREM Government Relations an agency and regulatory program addressing notices, rules, and orders concerning federal law; a state and municipal affairs program addressing legislative and legal issues and encouraging statehouse visits; a federal advocacy program addressing legislative and legal issues, including an In District Visit program for grassroots lobbying of U.S. Congressmen, Federal Housing Advisory Board, and Federal Advocacy Board Corporate Marketing and Public Relations initiatives designed to promote IREM as an organization, the IREM brand, and the combined programs and services of the organization Vendor Relations vendor relationships and sponsorships that offer access to IREM members, including Industry Partners, corporate sponsors, online and JPM advertising, conference exhibitors/sponsors, buyer's guide royalties, REME Award sponsors, and I/E sponsorships and advertising Industry Awards REME Awards program recognizing innovative business practices by property management companies and practitioners, culminating in an awards presentations at IREM Global Summit Page 35

36 Business Line: External Relations $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $ F 2018B Direct Income $277,921 $342,220 $355,439 $276,849 $334,570 $398,000 $480,765 Direct Expense $256,620 $346,756 $348,887 $312,145 $341,309 $373,983 $671, Highlights In its third year, commercial summit shifts to New York City to attract more asset managers, capitalize on momentum gained from first two summits Young professional board task force funded for in person meeting, additional expenses Continued attention on promoting careers in property management: Collaboration with NAR and its commercial affiliates and other organizations College and university outreach, including HBCUs Diversity programs Outreach to high school students Engagements with young professionals to include 30 under 30 initiative as a continuing program Government relations continues shift to indistrict meetings as primary vehicle for members to connect with Congressional leaders; Federal Advocacy Board and Federal Housing Advisory Board address issues with federal government officials Local and state government affairs issues supported by statehouse visit program Expansion of corporate PR and communications efforts to position IREM as an organizational thought leader and its leaders as subject matter experts REME awards enters its fourth year Page 36

37 BUSINESS LINE: EXTERNAL RELATIONS Variance Fav/(Unfav) 2018 B vs 2017 F % Variance Fav/(Unfav) 2018 B vs 2017 F Program Name _ 2015 Actual 2016 Actual 2017 Budget 2017 Forecast (6+6) * 2018 Budget CORPORATE OUTREACH Direct Expenses (84,949) (80,977) (139,050) (122,250) (140,990) (18,740) 15.3% Direct Contribution (84,949) (80,977) (139,050) (122,250) (140,990) (18,740) 15.3% ACADEMIC, PROFESSIONAL & DIVERSITY Direct Income 36,473 43,890 56,360 56,000 61,765 5, % Direct Expenses (55,577) (48,734) (89,230) (82,950) (153,110) (70,160) 84.6% Direct Contribution (19,104) (4,844) (32,870) (26,950) (91,345) (64,395) 238.9% GOVERNMENT RELATIONS Direct Expenses (35,496) (44,685) (67,345) (54,265) (59,530) (5,265) 9.7% Direct Contribution (35,496) (44,685) (67,345) (54,265) (59,530) (5,265) 9.7% CORPORATE MARKETING & PUBLIC RELATIONS Direct Expenses (50,326) (73,858) (71,850) (76,650) (262,200) (185,550) 242.1% Direct Contribution (50,326) (73,858) (71,850) (76,650) (262,200) (185,550) 242.1% VENDOR RELATIONS Direct Income 240, , , , ,000 77, % Direct Expenses (47,010) (54,528) (3,100) (4,368) (14,548) (10,180) 233.1% Direct Contribution 193, , , , ,452 66, % INDUSTRY AWARDS Direct Income #DIV/0! Direct Expenses (38,787) (38,528) (31,900) (33,500) (41,500) (8,000) 23.9% Direct Contribution (38,787) (38,528) (31,900) (33,500) (41,500) (8,000) 23.9% Net Income/(Loss) (35,296) (6,739) (4,115) 24,017 (191,113) (215,130) 895.7% * 6 months of actual results + 6 months of projected results Page 37