1. Division IV Director Report

2. Why is IEEE different from other technical societies? The breadth of activities!

3. Membership 350,000 members 210,000 also belong to societies That means that 140,000 members belong to to IEEE for reasons other than society participation!

4. IEEE Technical Activities –Societies Regional Activities –Chapters –Sections (Some) Educational Activities IEEE- USA Standards HQ - The folks who run it (Green = income other than IEEE dues)

5. IEEE Funding Source History Annually From IEEE Budget Member Dues Inv. Income Conferences Non-member Pubs Packaged Products IEEE dues All Income Sources Society Dues Conference Income Non-member Pubs IEEE dues Investment Income Packaged Products

6. IEEE Reserves - History

7. Where IEEE money comes from ~$250M revenues per year $25-35M from IEEE dues $3M from Standards The rest are split between conference income and pubs sales Plus a smattering of other sources (society dues, regional confs, Proc of the IEEE, regional events, etc

8. IEEE Finances ($M) EntityRevenueExpense Spectrum13 (Dues)13 EAB3 (Dues)3 RAB8 (Dues)8 Geog. Units1 (Dues)1 IEEE Other23 (Dues)24 Publications4 (Dues)4 (Pubs distributes IEL income to S/Cs= 21) Standards1111 TAB/Soc.154153 IEEE-USA66

9. Infrastructure Current infrastructure costs are like 20-30% of NPS expenses

10. IEEE Conferences Included Services –Use of Logo –IEEE Advertising –Budget Review/Approval/Audit Services –Forward Funding (Advance Loan) –Fiscal Insurance –IEEE Publication of Conf Record, Journal, Transactions –Publication Sales by IEEE (ASPP, IEL, …)

11. IEEE Conferences Available Services Audit Contract Negotiation Conf Planning Registration Travel

12. Current Issues Should governance structure change? Should publications income be dependent on usage? Should TAB expand w/o bounds or should there be a S/C life cycle? There will be Division Director-Elect positions in all Divisions

13. Current Issues (con’t) Reserve funds are ~ $77M. "Non-Reserve" funds are $47M (invested in minimum risk vehicles) Reserves “should” be built to 50% of annual expenses (10 year process?) Affiliate fees to 50% of IEEE dues No business class travel for 2003 and 2004 (except health reasons or IEEE President(s))

14. History Prior to mid-1960’s: All income goes to the General Fund: All entities funded annually by IEEE

15. Brief IEEE Financial History 1967 - Investment fund initiated 1969 - Investment committee established 1970 - Societies requested financial assistance 1971 - Society surplus concept established 1973 - Additional Society revenue streams requested; Board gave credit for “short term” interest on surplus balance 1974 - Societies allowed to keep non-member single-sales revenue 1974 - Long-term investment pool created allowing Societies to share in investment gains

16. Brief IEEE Financial History (Cont.) 198? - Additional society revenue requested 198? - ASPP revenue distributed to Societies 198? - Book broker revenue to TAB 1993 - RAB reserve fund established 1994 - EAB reserve fund established 1996 - Practice of raising dues to only add money to reserves ended 1996 - Standards reserve fund established 1996 - Book broker revenue to Societies 1996 - Current financial model identified by volunteers & staff as a major issue

17. Brief IEEE Financial History (Cont.) 1996 - Practice of spending from prior years surplus began at 9% of investments level 1996 - Allocation study undertaken 1996 - Allocations frozen expecting “infrastructure charge” to begin shortly (did not happen) 1998 - “New” financial model proposed 1999 - Proposal withdrawn 2000 - Russell committee established 2000 - Corporate reserves went to 0, investment market declined, resulting in OU reserves being taxed

18. Brief IEEE Financial History (Cont.) 2001 - Findlay committee established; Allocation process implemented in 2002 budget; TAB allocation process implemented 2002 - Adler committee established (LRBPC); Process for overhead recovery evolved; TAB committee refined allocation model for Societies/Councils 2002 - Financial model implemented 2002 – IEEE BoD mandates balanced operations budgets

19. 2001 Budget Long practice of building 9% return on investments into budget continued Additional $10 Million of Initiatives Overall 2001 actuals –($29.3 Million) –Mainly due to stock market decline 2001 operations actuals –Positive to budget by over $11.0 Million –Expenses still greater than income –IEEE began responding to slowing economy

20. 2002 Budget Practice of investment spending paying for operations eliminated IEEE BoD mandated net zero or positive operations budget 2002 IEEE operations net improved by over $23 Million relative to 2001 budget BoD passed a net positive operations budget Continued reacting well to slowing economy

21. 2003 Budget Practice of not using investment spending to pay for operations continued IEEE 2003 operations budget –$0.8 million net operations surplus Continuing to react well to the economy