Previous Page: Meeting Cancellation Leads to Bankruptcy

The Decision to Cancel
The annual conference is a huge source of revenue for NCSEA, as it is for most associations. Typically, the association nets $600,000 from the meeting, which helps pay for operating expenses throughout the year. The 2008 meeting, however, generated about $400,000. “We ended up doing OK in San Francisco, considering the environment, but we didn’t do as well as we had hoped,” she says.

On top of that, the association’s reserve funds shrank considerably after the stock market bottomed out—losing about one-quarter of its value between September and October and nearly 40 percent by January 2009.

Given the 2009 travel restrictions, the drop in revenues, the loss of reserve funds, and the outlook for a protracted recession, NCSEA was in a no-win situation. “When we looked at it, there was no way we were going to be able to have a successful conference in New York City,” explains Eubanks.

NCSEA crunched the numbers and looked at every possible scenario, but it looked bad. Even before the economy tanked, Eubanks was worried about the prospects for the 2009 conference, given the expensive location and contractual requirements, both of which were put in place before she took over as executive director in December 2006. “I was concerned about whether we would make any money on that conference,” she says. “A first-tier city like New York doesn’t make any sense for an organization like ours,” adds Eubanks, who would have opted for a second-tier city.

If NCSEA held the conference for the couple hundred people that might show up, they were looking at steep penalties because the contract had both room-block and food-and-beverage minimum requirements. “The food-and-beverage requirement was way above what we normally do for a conference, so it was a very onerous burden,” she adds. Faced with the option of few attendees and harsh penalties, the meeting would have lost a lot of money.

“So we had to make the very painful decision at the end of the year to cancel that conference,” she says.

But that’s just part of the story.

Next Page: Going Bankrupt