J. Abbott Byrd, III, MD
This present report summarizes the SRS financial position as of December 31, 2017. It is too early in our fiscal year to make meaningful statements about 2018 because so much of our financial health depends upon the performance of IMAST and the Annual Meeting. Unfortunately, this report is somewhat mixed.
The good news is that our overall assets are up to $13.4 million compared to $12.3 million in 2016 and $11.9 million in 2015. This is due primarily to the excellent returns of our endowment portfolio in 2017 which was 14.8% after expenses producing $1.67 million. The breakdown of the $13.4 million is as follows:
- $5.6 million in the REO fund which is managed by Rockefeller
- $4.6 million in the legacy OREF fund which is managed by Vanguard
- $2.7 million in operating cash
- $500,000 other assets
The bad news is that the SRS experienced a General Operating Net Loss for 2017 of $688,401 against a projected loss of $131,000 per the 2017 budget. As one might expect there were multiple reasons for this. The largest one was the IMAST meeting in Cape Town, which resulted in a net loss of $281,000. The expenses for this meeting only exceeded budget by $38,000, with the majority of the loss resulting from decreased revenues from registration and exhibit fees. Fortunately, the 2017 Annual Meeting in Philadelphia enjoyed a net income of $243,000, though this was less than the budgeted net income of $288,000, which also contributed to the overall loss for 2017. The Journal operated at a net loss of $65,000 with receipt of royalties and the editorial stipend from Elsevier, minus payment of member subscriptions. The directed courses in Europe and Asia combined for a loss of $68,000, while the traditional Worldwide Courses, including a live surgery course, lost a combined $27,000. An additional bright spot was the two Hands-On Courses (cadaver based) which combined for a net income of $100,000 against a projected income of $77,000. In addition to these larger losses, there were other budgetary overruns resulting in the General Operating Net Loss as noted above.
In response to 2017’s loss, the SRS leadership team proposed and the Board approved a budget for 2018 that will only result in a projected $1,850 loss for the entire year. This has been accomplished primarily through a modification of spending and with the reasoned expectation that the recent IMAST in Los Angeles will prove profitable, as most past meetings have been. The final accounting for this meeting is in progress. It is also expected that the Annual Meeting in Bologna will be well attended and profitable. The investment strategy for the Endowment fund will remain the same with Rockefeller and Vanguard, though as most realize, returns for 2018 have not been nearly as strong as for 2017. Through May 31, 2018, the SRS investment portfolio is up 0.4% for a gain of $50,000 after expenses.
The Leadership team is quite aware that the decreased investment revenue makes it ever more important to closely monitor the financial health of the SRS and make further adjustments to the budget as necessary. This fiscal diligence will ensure that the SRS remains the leader in research and education that will allow its members to provide optimal care for all patients with spinal deformities well into the future.