Membership rebate fee scheme

1. Membership rebate fee scheme Jean Vieille District Vice President V3 - 28 April 2004

2. Membership rebate fee scheme • Workshop • 20 minutes ??? • Related to the new DVP board TF • Inputs from sections • Expected outcome • Input for Section Finance DVP Board committee

3. Agenda • 8 Issues • 6 Proposals • Drawback and advantages • Comments

4. Current section rebate scheme • ISA collects membership dues • Some sections collect funds for ISA • ISA return 20% to sections • 30% for students) • « Temporarily » reduced to 17% • Formative sections • Rebate accrued when bylaws are issued • 25 % of rebate goes to District • Actually only 15 % goes to the section • 12,75 % based on 17% • $10,8 • € 9 per member…

5. Issues • Insufficient income stream • No balance ISA HQ / Local section vs benefits / cost • (RM) Inadequate return on member expectations • Unfair financial mean to balance ISA budgeting • Unfair contribution from members not served by a local section • No incentive to perform • Limited flexibility/autonomy for sections to manage their finances • Wobbly District financing • (RM) The future membership growth of the Society is outside USA …– GROW OR CONTRACT? • Actually contracting in D12

6. 1: Insufficient income stream • A 9 Euros per member revenue is not enough to sustain section operations • Weak hope we get back to 20% • € 900 income for a 100 members section = President travel cost to attend one DLC or one PSM • Critically low for new sections • Well established section have other sources of income • (RM) volunteer support is increasingly difficult to find when committee’s view the inbalance of ISA investment

7. 2: No balance ISA HQ / Local section vs benefits / cost • ISA membership value comes from both Global ISA and Local sections • Does 20/17% actually represent the respective value of local vs local benefits? • Is ISA global value the same in US and abroad? • USA standards and training courses, InTECH, Directory of instrumentation? • Is the local value for Irish members the same than for France members ?

8. 3: Unfair financial mean to balance ISA budgeting • We use section normal source of income as a means to balance ISA budget • Even if decided by a democratic vote, we take the responsibility of breaking the financial balance of sections • We move the financial (RM) responsibility from global to local

9. 4: Unfair contribution from members not served locally (a) • Many members are attached to the « Nearest section » which is in no way close to their interests • Thousands kms away, not the same language • They pay for this section which does not bring them any value • Examples: Iceland/Sweden, Malta/Italy, Greece/Turkey!!!,

10. 4: Unfair contribution from members not served locally (b) • Many members attached to inactive “formative” sections • No local benefit at all • Rebate fee kept by ISA, never distributed • The future section will not get any accrued money since bylaws are not issued • Alexandria, Germany, Istanbul, Belgium sections totalize nearly 600 unserved members

11. 5: No incentive to perform • Sections get the same amount whatever they do for the I, S & A community • Actually inactive sections get their funding without returning any local benefit to members • Most performing sections are not financially rewarded • Many sections feel Rebate as their only ISA link • Use the name, get the money and forget ISA

12. 6: Limited flexibility/autonomy to manage section finances • Sections could raise more or less membership fee depending on their actual needs and market conditions • Sections are not explicitly allowed to raise their own membership fee • This contradict the legal autonomy of sections

13. 7: Wobbly District financing • District budget must be • an incentive to develop the district • A means to do it • No interest for sections to finance the District • Except for holding the DLC • Well performing sections do not need much from the District, though they give most • DLC and DVP travel funding sharply decreased • Section contribution becomes predominant, though they can decide not to fund the District

14. 8: The ISA Grow is Overseas

15. Agenda • 7 Issues • 6 Proposals • Drawback and advantages • Comments

16. Proposal • ISA membership rebate is cancelled • Sections decide their local fee • Global membership on a per district basis • Independent global / Local membership • 3 ways to collect membership fee • District funding

17. 1: Cancel ISA membership rebate • Cancel the Rebate system • The ISA membership fee corresponds to ISA global membership benefit only • Decreased from $85 to $71, this amount can be modulated by ISA without impacting sections finances • Isolated members won’t pay for what they don’t get • Less dependency of sections on ISA Global budgeting

18. 2. Sections decide their local fee • No restrictions or recommendation for local fee • Local fee can be adjusted to the needs and constraints • Performing sections in a constrained market may decide not to charge any additional fee • Sections not having additional income in an easier market may charge more • France membership for comparable organizations is €100, $120 (for a greater benefit?) • ISSUES • Competition between sections?

19. 3: Global membership on a per district basis • Adapt the ISA membership fee according the actual membership value • NA districts global membership benefits are higher than in overseas districts • Language, InTECH, many standards and training courses are definitely US oriented • Objective assessment of ISA value within the corresponding areas • Incentive for Global ISA to become more global • ISSUE • An initial decrease of membership fee income

20. 4. Independent global / Local membership • A member can decide or not to be affiliated to global / Local ISA • 3 kinds of members • Local only, • Global only « At Large », • Local and global • Easier to raise new sections, • Any local organization may become an ISA section • Better fit of ISA into national I,S & A landscape • ISSUES • Need to define and enforce clear rules

21. 5: 3 ways to collect membership fee • Sections get the total Global + local fee and pay ISA their share • ISA retributes the section for collecting the funds • ISA gets the total Global + local fee and pays the section their share (much like nowadays) • Section retributes ISA for collecting the funds • Members subscribe independently for Global and Local membership • No Global/Local reciprocal impact

22. 6: District funding • No longer a triple fixed allocation • Section contribution, DVP Travel, DLC • DLC as a separate budget item, fully financed by sections • District budgeting • based on DVP assessment and responsibility • Funded entirely from ISA global • Discussed, Presented by DVP board • Voted by executive committee • No longer rely on sections

23. Notes • This scheme is not fantasy. • It is inspired from the current way the APICS runs (50000 members) www.apics.org • This definitely US organization has 800 members in France, almost 10 times more than ISA

24. Agenda • 7 Issues • 6 Proposals • Drawback and advantages • Comments

25. Drawbacks • ISA membership will be even more tighten to the perceived (true) ISA membership value • Non performing local section won’t survive anymore • Feel like ISA lose control on sections • Fear that members subscribe local, not global • Risk of competition between sections if the membership fee is not the same

26. Overall advantages • Much easier to raise new sections • ISA will no longer compete with local organizations • (RM)Significant membership growth opportunity • Many local organizations are interested to join • Some of their members will join ISA • Definitely fair membership cost / value balance • Reduces staff overhead, or get paid for it • Simple to implement • A Definite incentive for ISA toward globalization

27. Agenda • 7 Issues • 6 Proposals • Drawback and advantages • Comments

28. Original comments • The following slides summarize the comments received from district leadership. • The documents attached bellow are original contributions

29. From Saudi Arabia The Saudi Arabia Section would support payment directly to the local Section if we do not have to follow up on all the logistics of finance and membership fee payments and that is because we are a small group. However, we strongly support increasing the rebate percentage to 30%-50% because most of the local members are getting their benefits form the local section rather than the global ISA. Saleh Alquaffas, Section President

30. From Italy (1) • I agree with you that the present way of interacting with Headquarters is not the most effective way. I also consider unfair the "rebate scheme" as it is. My view of the point is the following: • If a member is willing to get support form local sections, it means that the role of the local sections is important and must be recognized. Otherwise, it's right that the member join directly ISA without being "affiliated" to a local section or district. • In the first case, headquarters should leave most of the fee to the local section, which is "helping" ISA to have more associates. • In the second one, all the fee should be in the budget of ISA Headquarters.

31. From Italy (2) • As you said, this solution would also give reasons to local sections to perform well and to be useful for the associates. • With reference to the "fees". the situation in Italy is different from what you described in France. Even if similar "societies" have more expensive fees than ISA, we have seen that the increased fee of the last years caused a reduction of the associates not negligible. It is also a trend for most of the "no profit" organizations in Italy. • As a consequence, my idea would be, as you said to leave freedom to the local sections about the "fees". but not only in increasing the fee, but also in decreasing it.

32. From Italy (3) • If I were to make a proposal, I would say that: • for members belonging to local sections, 30 USD should go to headquarters as a support of local sections to the entire "society". The local section should decide the overall amount above this fee. • Obviously it is a totally different approach than the present one. However it should be considered that the benefits for European (and not English speaking countries) of belonging to ISA are reduced than the ones that US, Canadian and British can have: standards are different, measuring units are different, language is different. Maurizio Zecchini, Section President

33. From UK (1) I am generally in agreement with your proposals. Although I have been an ISA member for many years (13) I am very new to the politics of the ISA. I still consider myself to be a "rank and file" member. As such the issues that matter to me are: a) how does the ISA benefit me? i) improving the way that I perform my job function. ii) improving my profile within my chosen career so that I can work and support my family. These are the purely selfish reasons b) how can I contribute to to my chosen profession to assist fellow members achieve own personal objectives (probably similar to mine in (a) above)

34. From UK (2) • I was surprised how little of my subscription money was allocated to my local section. • Both (a) and (b) are initially very "local" issues. Therefore I personally would like to see a more focused funding system on local sections/districts. The ISA brand name is a very important factor that unites our community globally. Globalisation is very important to the survival of the ISA and the district and sections outside of N. America are key to that success. We know the issues that are important to our locations and therefore the members operating within those areas. A degree of automony with regard to funding is therefore essential. We cannot just "lift" North American views, standards, practices, culture etc and place it in local sections - it wont work in all cases. Peter Partington – D12 Standard chair (see also comments in the text from Ron Migliorini, section president)

35. From France (1) • In general, I should say that I agree with your analysis but I do not share many of your conclusions. More precisely, I would like to underline the following points: • 1- ISA is a global organization, more and more based on Internet services. I believe, it is unrealistic to consider the setting up of vernacular solutions specific to certain countries when everybody from everywhere in the world can access the same services via Internet. • 2- Section prosperity will never result from an increase of the percentage of rebate or from an increase of their local additional fees. Rebates should be considered as the minimum living wage allocated to the sections. It is certainly highly desirable to move them up again to 20% but it will not change the fundamentals of the problems.

36. From France (2) • 3- On the other hand, sections should be highly encouraged to develop local activities based on ISA products and services Sections should behave as Value Added Resellers developing a local business thanks to materials made at their disposal by ISA under favourable conditions (training courses, conferences, books, CD-Roms etc.). Sections should be governed by a kind a franchising agreement with ISA. Such an agreement could be revoked, if the sections were inactive. But, I am not suggesting establishing several entities in the same country competing one with the other. This would exacerbate conflicts and confusion, without benefit for anybody.

37. From France (3) 4- Clearly this means that ISA should be less bureaucratic and more business orientated. Of course, fiscal implications should be assessed country by country but I do not believe we can grow in France with a status of non for profit organization where our members are only individuals and where very large companies, such as Siemens, Rockwell etc., can have access to all the information provided by ISA via the subscription of only one of their employee. Sections should provide services of material interest to their members under privileged conditions but their members should be either individuals or organizations and the annual contributions should depend on the size of the organizations.

38. From France (4) • 5- Regarding the Districts, I assume their role should be to support the sections and to liaise with the central organization but I have not a sufficient experience yet to forge a relevant opinion about the ins and outs of these issues. I only believe that the discussion should be kept distinct from the discussions concerning the sections as I the missions are clearly of a different nature. I should suggest to launch a survey among the sections in order to better evaluate hat are their expectations regarding the District. Please consider my thoughts as a contribution of a new comer Jean-Pierre Hauet, Section President-Elect

39. From Ireland (1) • We experienced huge problems when the membership for ISA in Europe was held by a company in Belgium, it costed a fortune and many of the membership form and payments were lost, then there were many problems with the renewals and also with Intech delivery. The service we get now is many time better than what we had before. • With regards to the ability to charge for different fee in different countries then you would get accidental price wars where it could be cheaper to a member in Ireland than France, so people would ask to be linked to the Ireland Section. • This would bring other problems with weak sections becoming weaker and when the strong section has a weak membership person the whole section would suffer

40. From Ireland (2) • My opinion is that if we go seeking to change the current funding situation then we will end up with even less than we are currently getting. • Currently it cost ISA €2.5 Million in membership services excluding Intech, I know we in Europe do not get all of these services but we benefit for some, the standards, publications WEB etc. When you do your calculations the cost of a member to ISA is $78 dollars more than the income. The cost of the International Member is higher because of the cost of servicing that member is higher especially for Intech.

41. From Ireland (3) • Even if a Section was to get €50 dollars back from USA, it would not be enough to run a section, equally if the funding for sections change then the funding for districts will also change, we have a very low level of funding at present. It is good to discuss all options, but don't lose sight of the benefits verses the cost of replacing these benefits in a District or in each section. Declan Lordan – Section Education Chair - D12 Treasurer

42. THANK YOU