Hard Decisions Are Being Made

In November 2018, the Board of Directors of the Entomological Foundation (EF) decided to investigate the dissolution of the organization, with all programs to be moved to the Entomological Society of America’s (ESA) Education and Outreach Committee (EOC).

This decision was based on the advice of our auditors. The Entomological Foundation has struggled with a lack of funds, and no clear pathway to generate an ongoing and sustainable stream of funding. The ESA EOC is a group with a near-identical mission to that of the Foundation.

We are merely seeking a better and more sustainable model than providing financial, staff, and volunteer support to two organizations with identical missions. Streamlining operations through a single organization will allow more volunteer effort and funding to be directed to the mission rather than being spent on overhead.

Staff will spend the next few months investigating the process and will provide the Board of Directors with options in the first quarter of 2019.

Here are some of the details of our funding history, and why we came to this difficult decision:

Nearly since its founding in 1991 with a large single donation, the EF has been in a precarious financial position. Despite efforts of a full-time staff and dedicated volunteer leadership to build a broad donor base, from its inception the organization has been overly-reliant on a small number of donors. Annual fundraising efforts (i.e., individual donations, silent auctions, etc.) have fallen short of the need. Indeed, many of the annual activities have been more expensive than the income they generated (e.g., the now-discontinued gala dinner at the ESA Annual Meeting).

The financial crisis, which was looming from the start, came to a head at several times. On at least two separate occasions ESA made large “one time” cash infusions to offset operating losses. In the late 2000’s, a commission developed a donor outreach program, which was funded by ESA. This did not have any long-term impact on the donor base. In 2014, the organization’s leadership made the difficult decision to lay off its staff and move the office to a temporary home out of state in an effort to minimize expenses. Recognizing the importance of the mission, ESA agreed to take over the management of the EF and the headquarters moved again in early 2015 to Annapolis, Maryland, where it remains co-located with ESA, with ESA donating staff time, overhead, and operating expenses – a donation with an estimated annual value of between $10,000 and $15,000.

The financial records that were inherited from the former staff paint a dire picture: After the initial donation that provided seed money to start the EF, at no time in its history have the Foundation’s annual unrestricted donations outpaced actual annual expenses. The records also indicate that the EF was approximately $150,000 “under water” when it came to ESA with that amount of money having been spent on operating expenses, using money out of restricted-use funds. These funds must be paid back if the organization is to remain in existence.

Based on a “best case” scenario that shows no further erosion in one-time small individual contributions to the EF through ESA, staff does not anticipate returning to a position of positive net assets until approximately 2030. It should be noted that this time-frame excludes payment to ESA for staff time and a percentage of indirect costs that would normally be billed to the EF on a quarterly basis. This forecast assumes that ESA would continue to be willing to subsidize these costs.

We should point out that this situation notwithstanding, there are some substantial individual and corporate donors who have buoyed the organization for many years. Prior to the November 2018 board decision, staff reached out to many of these donors individually and explained the current financial situation. We quite simply do not have enough of these large donors to sustain us. In fact, in reviewing our 2017 donations, we had a grand total of 93, with the vast majority being $50 or less. The median donation most years is between $25 and $50, and there are only 100-200 donors per year.

Until decisions are finalized about the long-term status of the Foundation, we are removing the donation link on our website. If you would like to make a tax-deductible contribution to support youth education in entomology, we suggest two options:

  1. For now, the Foundation remains a 501c3 tax-deductible option for donations and will still accept donations through the mail to: The Entomological Foundation; 3 Park Place, Suite 307; Annapolis, MD  21401. Any money that remains in the EF’s account at dissolution (if that is the outcome) will be used to support the projects that transfer to the EOC.
  2. The ESA can accept donations in support of youth education in entomology. Please make checks payable to the ESA; 3 Park Place, Suite 307; Annapolis, MD  21401 (with a notation that this money is to be used for youth education). Your donation will provide operating funds for the EOC in CY 2019.

We pledge to try and keep you updated as the process continues and thank you for your past support of the Entomological Foundation.

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