SfN Council Approves Changes to Strategic Reserve Fund Policy
The COVID-19 pandemic caused the cancellation of 黑料社 2020, the elimination of in-person programming for 黑料社 2021, and significant declines in membership for 2020 and 2021. With the loss of these revenue sources, SfN found itself facing a significant financial deficit.
Fortunately, the Society was able to survive these financial shocks by leveraging its Strategic Reserve Fund, assets worth tens of millions of dollars. The Fund, established in 2003 and managed by the SfN Investment Committee, met its purpose in enabling SfN sustainability and longevity in the face of extreme circumstances.
Yet the pandemic revealed that a key assumption embedded in the structure of the Reserve Fund may be incomplete. “The Strategic Reserve Fund had been built around the idea that a crisis would disrupt one annual meeting,” said Investment Committee Chair Ray Dingledine. “What the pandemic revealed to us was that some crises can disrupt multiple annual meetings and revenue sources, and that SfN needs to be prepared for that potential future.”
Prompted by SfN Council, the Investment Committee examined the question “Is the Strategic Reserve Fund holding enough assets, or too much?”. The committee found that the Fund’s goal to meet at least 115% of the Society’s identified liabilities was correct. But, the definition of liabilities needed to be expanded to include two years of cash outflows (up from the previous one year of cash outflows) and all restricted assets.
This expanded definition of the Society’s identified liabilities puts the current assets in the Strategic Reserve Fund at approximately 96% of liabilities at the start of 2024, meaning that the Fund will have to grow to achieve its goal. To support the Fund’s growth and ensure SfN’s long-term stability, Council has approved a multi-pronged revenue modification strategy. At the same time, Council has also approved an increase in the annual draw on the reserves to $2.5 million to support the Society’s current programming needs.
By following this revised strategy, it is the express intention of SfN Council to ensure SfN’s survival and financial health in perpetuity, in service of its members.
