IBS-Bostrom Relationship Review and Headquarters Expense Analysis

1. International Biometric Society Bostrom Relationship Review July 6, 2014 This report is intended for the sole and exclusive use of IBS and is not to be copied or shared with other parties.

2. Randy Lindner, MHSA, CAE Bostrom President IBS Senior Advisor

3. Long term & positive relationship between IBS and Bostrom • Relationship began in 1994 • Both are highly professional and dedicated to quality and service as well as being mission-oriented • Jointly have positioned IBS as a global organization with a voice and representation from all member regions. • Dee Ann Walker is recognized by her professional peers as an experienced leader in the field of association management. • Dee Ann is supported by a team of association management experts in strategic planning, education development, finance, information technology, operations and administration.

4. Four common association staffing models • Volunteer-managed • In this model all activity, governance and support, strategic and tactical, is provided by volunteers, members of the profession • It is common among start-up and relatively small organizations • These organizations may supplement volunteers with very minimal part-time clerical support • Association Management Company • The current IBS staffing model of an Executive Director who is an association professional employed by an AMC is the most common AMC model • In addition, all other association staff are also employees of the AMC • This approach is sometimes called “full service”

5. Staffing models [Continued] • Hybrid management • Increasingly common forms of management are for associations to combine some form of self-management and other staff are provided by another service provider • Some of these service providers might be AMCs, CPA or IT firms, etc. • An example could be where the CEO is the only employee of the board and all other employees are outsourced to an AMC • Self-Managed • Where the staff are direct employees of the association and the association typically has its own offices • While this has long been considered the “traditional” model of association management, the AMC and hybrid models are experiencing rapid growth and increasingly recognized as cost efficient models that leverage a depth of expertise within the association world • Which model to chose depends upon a variety of factors: strategic, cultural, and developmental - - - and which model will best advance an association’s mission

6. Headquarters Expense: Is IBS receiving appropriate value for the fees paid? • We approached this question from two directions • We utilized a well-regarded industry source for non-profit operating ratios from the American Society of Association Executives (ASAE) as well as IRS Form 990s the a stand alone organization within your field • It should be noted that the accuracy of comparability is subject to the self-reporting of each of the organizations in these reports • Benchmark Organization • Weexamined IRS Form 990 tax returns for fiscal years (FY) 2011 and 2012 for the American Statistical Association (ASA) as it is similar in profession or structure to IBS • The following table International Biometric Society: Headquarters Expense Analysis - Data from FY11 and FY12 990 Returns displays comparative information for IBS and the ASA as well as ASAE operating ratios • The expense items included in the analysis are shown in the table entitled Headquarters Expense

8. Headquarters Expense

9. Headquarters Expense [Continued] • ASAE 2012 Operating Ratio Report – 14th Edition • ASAE reports nationwide data on associations • In the column labeled “IBS 11&12,” where Total Revenue equals $1,660,422 and Total Headquarters Expense equals $870,781, the Total Headquarters Expense as a Percentage of Total Revenue [a common industry indicator] was 52.44% while the amount reported for all associations in the ASAE Operating Report is 49.20% • This means that IBS is within 3.24% of the average ASAE association operating expense ratio.

10. Headquarters Expense [Continued] • IRS Form 990s • In addition to the industry aggregated data, we compared IRS Form 990s from the American Statistical Association (ASA) as an organization in a similar field with an international membership structure which is self managed. • As can be seen from the table, their combined FY 11&12 Total Revenues were $18,144,804. • Regarding the indicator of interest, Total Headquarters Expense as a Percentage of Total Revenue, to put IBS’s 52.44% into perspective, the ASA FY 11&12 ratio was 59.30%. Normally as association budgets increase, their expense ratios decrease due to volume of scale. • Thus the IBS is spending a smaller percentage of its total revenue on headquarters expense than the benchmark organization. • We believe that the headquarters expense fees are fair and reasonable for the current scope of services

11. IBS Fiscal Health Trends ASAE Operating Ratio Reserve Targets - 58% IBS Reserves FY 2013 - 237% (based on 2 year average operating budget) • IBS Growth in Net Assets – FY 2006 through FY 2013 (206%)

12. Questions?