Financing the IICRC
October 13, 2008
Many people inquire about how the IICRC spends “registrant” fees. They are under the impression that one person has total control over the finances. That’s just not so.
The IICRC Technical Advisory and Standing Committee chairs submit their proposed budgets for the coming year to IICRC Treasurer Ed Hobbs by July 4. He, in turn, faces the daunting task of trying to “crunch the numbers” with the help of the five-member financial committee.
After several months of work, Hobbs presents the proposed budget to the 26-member board of directors at the semi-annual board meeting in the fall. The board then approves or adjusts the budget for the coming year. Each committee chair is also required to submit a report of his or her committee’s activities for the previous six months.
Let me briefly explain the income side of the IICRC budget and from where the income stream is derived. Many believe the IICRC receives all the fees paid to course sponsors when students attend IICRC-approved classes. Actually, those fees go to the course sponsor to cover the costs of hosting the course, such as hiring the independent IICRC-approved instructor to conduct the course, advertising, and meals or snacks. The only fees the IICRC collects from a course is the test fee for administering and processing the exam. Other major sources of income come from technician renewal fees, Certified Firm fees and sales of IICRC standards.
Generally speaking, approximately 48 percent of IICRC funds are spent on overhead and operations, which include all the administrative costs related to exam processing and maintenance of the 45,000 IICRC technicians and 5,300 IICRC Certified Firms. In fact, since 1972 more than 120,000 technicians have been certified through IICRC, and even their records are maintained for future access. This maintenance includes postage; printing costs; legal costs; insurance policies; facilities and equipment costs; storage/ warehousing of inventory; bank fees; telephone costs and, of course, staffing.
Ten percent of the IICRC’s income is directed to marketing and public relations. Some of these expenses include production, printing and mailing of the newsletter, and attendance at numerous conventions and trade show throughout the year, such as the Connections events and Surfaces, where IICRC registrants have the opportunity to receive CECs as well as talk face-to-face with administrator Tom Hill, technical advisor Jeff Bishop, the president or one of the vice presidents, and occasionally other members of the board of directors or technical advisory committee chairs who may have special knowledge of a particular venue. We also purchase “matte” releases, short infomercials for newspapers and radio. Of course, the fee for our public relations firm comes out of this budget as well.
Every six months during the year IICRC holds two certification council meetings along with two board of directors meetings. In addition, once a year a shareholders’ meeting is held in conjunction with the fall board meeting. There are also two executive committee meetings held between board meetings. During the certification council meeting, the instructors and technical advisory committees meet to review, update and rewrite exams. During the board meetings the standing committees meet and conduct their business. Since those involved in these meetings are volunteers, the IICRC covers their reasonable travel expenses. A typical certification council and board of directors gathering numbers more than 100. The cost of these various meetings and other conferences accounts for another 10 percent of the IICRC expenses.
Developing and rewriting IICRC standards takes approximately 7 percent of the IICRC budget. There are numerous meetings, both in person and online, held throughout the year. When volunteers sacrifice their businesses to attend these meetings, IICRC reimburses their basic travel and lodging expenses. Another 5 percent is allotted for IICRC’s international operations. Currently we have administrative offices in the United Kingdom, Australia and Japan to handle affairs in those countries.
The final 20 percent of the budget is allotted for a variety of services and committee operations including technical support; government affairs; the Certified Firm referral system; instructor and school monitoring; dues and memberships; exam review and development; honorariums and new program development.
IICRC is a not-for-profit corporation. Every year an annual audit is conducted by an independent accounting firm. As I have stated before, as with other large corporations, there are checks and balances to assure the IICRC constituency that the organization is run ethically and proficiently with the best interest of its registrants in mind.