Delegates’ Budget Responsibilities

Delegates to Convention will be asked to participate in a vote to adopt the LWVUS Fiscal Year 2023 and 2024 biennium budget.

The board-approved LWV Education Fund (LWVEF) budget for the biennium is also presented, as the two organizational budgets (LWVUS and LWVEF) are interrelated. However, the LWV Education Fund Trust Agreement provides for its budget adoption by the LWVEF Board of Trustees, which has already taken place at the April 2022 Board meeting. Click the button below to see the budget summary.

BUDGET SUMMARY FOR FY 2023 & 2024

Overview

The budget presented reflects the activities associated with the operating plan to attain metrics of the six organizational strategic goals, the continued commitment to organizational change, the expanding Women Power Democracy mission impact work, and overall support for state and local Leagues. The consolidated biennium investment budget request totals $3,635,153.

Both LWVUS and LWVEF hold strong financial positions. While investment budgets have been requested and approved by Convention delegations for the last two bienniums, each of these bienniums has seen extreme out-performance in fundraising, resulting in operating net revenue that has increased the level of stability and organizational financial health for more than five consecutive years.

Total consolidated assets have increased from just over $10M at fiscal year end (FYE) 2017 to almost $23M at FYE 2021, most of which is now held long-term investments ($13.9M at FYE 2021) due to focused cash reserve and unrestricted net assets policies. Further, in each of those five years, unrestricted net assets held between 72% and 75% of those total assets, with restricted net assets and liabilities at no greater than 28% of the total organizational assets. This displays consistent focus on controlling financial position, ensuring the organizational assets remain as free from leverage as possible.

The consolidated organizational actual expenses have grown from approximately $8M in FY 2017 to approximately $21M in FY 2021; these increases in spending have been directed at the organization’s mission impact, including greater investments in the field. The percentage of total expenses invested in programs/mission impact has increased from 48% in FY 2017 to 76% in FY 2021, and that is expected to at least remain consistent in FY 2022. The League is investing in the most impactful places as its budget grows; this FY 2023 – 2024 biennium budget once again includes a solid investment in state and local Leagues (approximately $1.7M in grants).

While a balanced budget has been a focus in the past and may well be the goal in future years, the healthy reserve the organization currently holds dictates a responsible investment of those funds. The investment requested is slightly more than the last two consolidated biennium budget investment requests, and specifically reflects an effort to ensure ongoing program work is sustainable. Investment (reserve) spending is focused mainly on two things: 1) implementation costs of the Structure Taskforce recommendations ($1,436,400, including staff and benefits), and 2) non-recurring and/or one-time investments ($1,683,620), totaling $3,120,020.

The League Structure Taskforce is recommending a more formal League and member rights and responsibilities framing and two organizational structure proposals: a modernized membership experience and an investment in building state League power. The budget includes assets to help facilitate each of these proposals, which moves the League further on its transformation journey.

Specifically, it invests funds to:  

• Create a standardized, flexible membership structure, and develop systems to align the membership dues and data collection and distribution process, allowing for a more inclusive and uniform member experience. 

• Create a plan to expand state League capacity over the next decade.  

While these are longer-term solutions to historical challenges, Leagues will see some milestones or outcomes in this biennium from the Transformation Roadmap work, including:  

• Leadership development and training opportunities for Leagues, such as around the role of the president and work of nominating committees  

• Assessment and exploration of state capacity needs and solutions   

• Shared norms around the rights and responsibilities for Leagues and members  

• Expansion of racial equity lens on the systems, processes, and structure of League  

• Continued expansion of League partnership with Club Express to automate dues collection  

Structure Taskforce implementation costs will include three additional staff members, two being hired as soon as possible in FY 2023, and an additional staff member to help with more administrative implementation tasks in FY 2024. These staff will specifically focus on the two major proposals of the work. Current staff will be working on the more immediate milestones described above. 

Methodology

The League budgets expenses in the cost center in which they occur, enabling the organization to better track and have visibility into the budgeted and actual costs of activities and programs. The League also centralizes shared costs, such as rent and other operational expenses, under administrative services, and budgets the full costs of any given staff position in their respective “home” cost center.

LWVUS and LWVEF share resources (both labor and operating supports) and require equitable allocation between the two entities. A cost-sharing agreement was adopted between the two entities in April 2003 and has established a cost allocation based on direct labor costs. Besides direct grant labor costs, costs for major gift officers, and the VOTE411 staff, the FY 2023 and 2024 budget reflects a 50/50 split between entities based upon an average of actual expenses allocated during the past four fiscal years. Actual salaries will be allocated to the organizations based on percentage of time spent on activities of each organization, with particular focus on staff supported by private foundation and government grants.

The presentation of the expense budget is organized by function, with program areas listed individually. Much of the national organizations’ work and resultant social impact at the local, state, and national levels is carried out by volunteers; however, the in-kind value of such support is not codified or reflected in these budgets.

While comparative data from FY 2021 and FY 2022 includes activities from e.ThePeople, this corporate subsidiary of the LWV Education Fund has now been dissolved, and all prior work performed under that corporate entity is being performed through the Education Fund directly.

Revenue Overview

Consolidated Revenue is projected to increase over FY 2022 by approximately (~) $3.9M for FY 2023 and $3.7M for FY 2024. The majority is in in-kind revenue, which is expected to increase over FY 2022 but be less than the extraordinary amounts recorded in FY 2021 due to ~ $7.7M in pro-bono legal fees. As mentioned, the conservative revenue estimates will almost completely cover all ongoing expenses in the two fiscal years.

Individual Revenue is the most significant revenue component of the LWVUS budget but is now being rivaled by the continued increase in Corporate and Foundation Contributions on the LWVEF side of the house. Individual revenue is budgeted to increase in both fiscal years as we continue the implementation of an improved approach to direct marketing.

Corporate and Foundation Contributions are expected to remain stable but be slightly less in the non-election year. While we hope to continue many of the relationships developed with private foundations during the 2020 election crisis, we are budgeting conservatively.

Per Member Payment follows, and while membership numbers have remained consistent in FY 2022, revenue is expected to increase slightly in FY 2023 due to activation of the new Club Express system. The League will be receiving real-time payments for new and renewing members, in addition to the traditional post-membership PMP billings.

Major/Mid-Level Gifts are expected to increase for LWVEF for both fiscal years as we introduce two additional major gift officers, who will continue to work specific portfolios of donors with the assistance of wealth screening software. 

Operating Expenses

Development, the most significant individual expense category in the LWVUS budget is revenue-producing and is an investment in both the short and long term. Costs in this functional area are both to promote and educate donors on the mission work, as well as drive revenue. Development costs include staff time, consultants for specialized fundraising avenues (such as planned giving and direct marketing), mailing list rental costs, printing, and postage. Most of the increase from the previous biennium budget can be attributed to increases in printing costs due to paper shortages.

Administrative Services is a centralized cost center for shared expenses such as rent, telephone, some technology licenses, staff, and other resources necessary for staff to operate at the national level. Much of the technology budget is needed to continue the work on the Transformation Roadmap.

Mission Impact includes much of the core mission work of the League and is mostly housed in LWVEF; this work includes voter registration, mobilization, organizing, and VOTE411. Grants to state and local Leagues are also included in this functional area.

Advocacy and Litigation includes both lobbying and non-lobbying activities to help shape policies at the national, state, and local levels. The focus on protecting voters and voting rights, and redistricting reform under our Campaign for Making Democracy Work® and the People Powered Fair Maps™ campaign, continues into this next biennium. Large increases on the LWVEF side can be attributed to significant pro bono legal expense recorded as in-kind services.

Communications includes rapid response, social media, earned media, and digital marketing campaigns and maintenance, as well as maintenance to the LWV.org site.

Member Services continues a focus on sharing best practices and supporting communication of mission work. A subcomponent of this functional area is member/leadership development through Council, Convention, and the Shur Fellows program. This area also includes the diversity, equity, and inclusion work, which will be expanding this biennium.

Outcome and Evaluation develops the program impact and evaluation framework, and the associated data collection and analysis. This is an increasingly important function of the organization as it helps focus the mission impact work and enables informative feedback on organizational metrics.