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Financial Consequences of the Covid Pandemic - Early Indications
By Natasha Afitska, Andy Friedman, and Alex Witt
Early indications from an analysis of annual reports of professional bodies confirm a shock to professional body finances, especially in the second quarter of 2020. This conclusion is based on an analysis of 18 organisations that had financial years ending in September and October and which directly addressed the effects of the pandemic. They were drawn from the 504 annual reports included in the 12th annual PARN/haysmacintyre Financial Benchmarking report for 2019/20 published in November 2021.
The shock was muted by government support but most significantly it acted as a stimulus for virtualisation of operations leading to a substantial and a likely continuing recovery from the initial set back. It has also oriented the distribution of income sources back to greater reliance on subscription fees with reduced income from event attendance and education and training.
All 18 professional bodies commented on their new or improved virtual software capabilities leading to high attendance at virtual events, though in addition to easier access and availability of more events, this was stimulated by substantially reduced charges. This encouraged a small rise in membership of 1%, but a large fall in the proportion of income from events and member networks, as well as from education and training including CPD. Along with this there was a fall in associated income from lettings, advertising and sponsorship. Income from publications rose as the proportion of total income. The overall position was alleviated somewhat by reductions in expenditure primarily on events with no venue hire and travel costs.
Will these early indications prove long-lasting?
The step up in virtualisation will undoubtedly be maintained and likely be further enhanced. Some mix with face-to-face events, which has already resumed since these annual reports were analysed, is likely to become the norm. However, with the rise of the Omicron variant professional bodies may be driven back to more complete virtual mode, though hopefully only for a short time. We suspect the long-term trend in diversification of income sources away from reliance on member subscriptions will be resumed with a return of income from events, education and training.
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