Report of the Treasurer (2023)

Introduction

The Report of the Treasurer is presented in the Notices annually. Its purpose is to discuss the financial condition of the Society as of the immediately preceding fiscal year-end and the results of its operations for that year. One of the key responsibilities of the Treasurer is to lead the Board of Trustees in the oversight of financial activities of the Society. This is done through close contact with the executive staff of the Society, review of internal financial management reports, review of audited financial statements, and twice-yearly meetings with the Society’s independent auditors. Through these and other means, the Trustees gain an understanding of the finances and financial reporting of the Society.

Operating results for 2023 were very positive. Net operating income was $4.8 million as compared to $1.12 million in 2022. Of this, $2.73 million was attributable to the Employee Retention Credit, a refundable tax credit for eligible business and tax-exempt organizations that were affected during the COVID-19 pandemic.

Publications, Membership, and Meetings all produced increased revenues in 2023, with the total increase just over $1.08 million.

Short-term investments delivered $658K in returns, and spendable income from the endowments provided 8% more operating revenue than last year, an increase of $578K. Total spendable income from the endowments provided 21% of total revenues in 2023 as compared with 22% in 2022. Our endowment spending policy directs 4% of a four-year rolling average of assets toward operations, and these funds provide extra capacity as well as stability during difficult times.

AMS long-term investments enjoyed strong returns in 2023. The stock market made a notable recovery following a challenging year in 2022. The 2023 return was 16.8% as compared with the 2022 return of -15.4%. At year-end 2023, the balances were $232,877,485 reflecting a gain of $33,459,604. Additionally, 2023 was the best year for AMS fundraising on record, with a year-end total of contributions and bequests of just over $6 million.

Other financial metrics confirm that the AMS is in good financial health: the current ratio (ratio of current assets to liabilities) is 1.21, the ratio of debt-like obligations to assets is a very low 0.12%, and the AMS ended 2023 with 160 days of cash and short-term bond vehicles on hand. (The typical goal for professional associations is 90 days.) Most importantly, the AMS spent about 87% of its revenue on programs and just 13% on administration and fundraising. All these indicators compare favorably to nonprofit averages.

The rest of this report discusses in more detail the operating revenues and expenses of the Society as well as its assets and long-term investments.

Operating Revenues and Expenses

Overall, revenues were 16.8% or $5.5M higher than FY 2022. Income from Publications constituted 57% of total gross revenues. Publications revenue rose modestly in 2023 largely driven by increases in MathSciNet and eBook sales. MathSciNet continues to be the AMS’s largest single income source, contributing 34% of gross revenues. Book revenues in 2023 reflected a broader trend in the publishing industry of increased sales of eBooks versus printed books. Individual eBook sales were nearly twice as high as 2022 ($698K vs $360K in 2022). The increase reflects shifts in technology, consumer preferences, and favorable eBook pricing.

Meetings revenues increased by 181% compared with 2022 ($1.5M vs $536K) as we returned to in-person attendance at the Boston JMM. While revenues lagged budget projections, it is worth noting that registration fees in 2023 were $1.38M compared with $534K in 2022. While JMM was an enormous success as judged by attendance, the meeting ran at a loss. Net expenses exceeded revenues by $483K.

Membership exceeded 2022 revenues by $32K. While individual dues dropped by $6K, institutional dues increased by $38K. This reflects the ongoing work by the Membership Department to increase a sense of connection between the AMS and member organizations. Programs demonstrated significant growth in grant expenditures ($1.84 million in 2023 as compared with $1.09 million in 2022) as travel returned to prepandemic levels but also experienced increased costs in grant program management ($1.7 million in 2023 versus $772K in 2022).

Miscellaneous revenues increased by $4 million in 2023. As mentioned earlier, this was largely driven by the $2.7M in revenues from the Employee Retention Tax Credit application. Grant revenues and Math Jobs also contributed to the positive year-end variance.

Total operating costs in 2023 were $33.2 million compared with $31.4 million the prior year. Personnel costs are the largest component of AMS operating expenses, averaging 70% annually. Total personnel costs rose 5% in 2023. This increase was largely driven by salaries as turnover in the prior year and open positions resulted in lower pension plan contributions. Health insurance expense was also lower in 2023 as the number of participants enrolled in our healthcare plan fluctuated.

As anticipated, the AMS saw increased equipment rental charges as a result of the in-person JMM. Equipment rentals and expendables cost $351K in 2023 versus $195K in 2022. Service contracts and software/cloud services contracts were $74K higher in 2023. Building costs were 9% higher than the prior year due to planned repairs and capital investments in the Providence and Pawtucket facilities.

Other expenses increased by $473K from 2022 to 2023. A significant portion of this is attributable to the professional fees paid to ADP for the ERTC CARES ACT filing. ADP’s fees for this service were approximately 1% of the total credit.

Net income for 2023 exceeded forecasts by $4.7 million, ending the year at $4.8 million in revenues over expenses.

Long-Term Investments and Net Assets

2023 was the best year for fundraising on AMS on record. At year end, the Development Team had raised $6,046,170 in donations. Of this, $4.8 million came from two unrestricted bequests. Another $534K was contributed to temporarily restricted funds. These contributions included large gifts in support of Communications of the AMS, PUI Faculty Travel Grants, Undergraduate Student Grants and the JMM Undergraduate Reception. Permanently restricted funds received $658K in contributions. The largest of these gifts were to the AMS Book Fund, the Tomastik Prize in Differential Equations, the Leighton Fund for Young Scholars, and the Catherine Roberts Next Generation Fund.

The S&P 500 gained 24.23% in value during 2023 and a broad index of bonds increased by 5.03%, leading to an overall return of 16.8% for the AMS portfolio which is currently invested in a diversified mix of about 60% equities and 40% bonds. Endowment revenues continue to provide a stable source of operating income for the AMS. The AMS uses a 4-year moving average of portfolio value and a set spending rate of 4%, allowing the Society to smooth the effects of periodic market volatility on the amount available to spend each year. In 2017, endowment revenues contributed 15% to gross revenues. In 2023 that figure was 21%. Income from the endowment allows the AMS to continue to deliver top-notch programming content and membership support in spite of economic volatility.

Summary Financial Information

The following Statement of Financial Position, Statement of Activities, and Statement of Functional Expense are from the audited financial statements of the AMS, and the Statements of Invested Funds are from the internal financial records of the AMS. Any member may contact the AMS to request the full audited statements of the Society. As Treasurer I would be happy to answer any questions members may have regarding the financial affairs of the Society.

Respectfully submitted,
Douglas Ulmer
Treasurer of the AMS