Projecting the Cost of ATA’s Annual Conference

The conference pricing tool was designed to provide conservative figures for both revenues and expenses in accordance with good accounting practices.

How does ATA project the cost of the Annual Conference?

Before 2015, the budget for ATA’s Annual Conference was based largely on historical trends in terms of the costs, such as food, beverage, and audio visual support. The registration fee for the conference was often set based on how popular previous conferences had been in similar locations and what price the Board thought the membership would bear. However, the actual numbers sometimes deviated significantly from what was budgeted. When this happened, the result would be a financial loss for the conference. This was particularly the case once staff overhead costs were calculated at the end of the year.

In cases where the revenue of the conference was less than its cost, the difference had to be paid with money that ATA received from other sources, such as membership dues. For past conferences, membership dues covered much of the staff overhead costs. This allowed the conference to remain more affordable, but it also meant that members who attended the conference were being subsidized indirectly by the dues of those who did not.

In 2015, in an attempt to further improve ATA’s finances, the Board decided to stop subsidizing the conference with membership dues from those who chose not to attend the conference. (See “Money Matters: The Story Behind Numbers and Board Decisions,” by Ted Wozniak and Evelyn Yang Garland.1) Therefore, the Board made a concerted attempt to ensure that the Annual Conference would at least break even. To achieve this goal, they needed to determine the staff overhead costs and include them in the budget for the conference. They also needed a conference pricing tool to help improve the accuracy of the conference registration fee based on all of the costs.

How was the conference pricing tool developed and used?

In late 2015, ATA’s Finance and Audit Committee tasked an ad hoc team to project the net revenue for the 2016 Annual Conference. The team consisted of two of the authors of this article, Evelyn and John.

The team faced two challenges. First, no one ever knows precisely how many people will attend any given conference, so the team can only make a best guess as to how much food and beverage (F&B) will cost, and how much ATA will receive from conference registration. Second, there are many variables on the cost side, making the total cost a moving target. For example, some conference hotels may work with different unions, which may involve additional charges for various services during the conference. This adds to the total cost.

To tackle the first challenge, the ad hoc team decided to include multiple scenarios in their analysis. As experience suggested, the number of conference attendees normally fell within the 1,500–2,000 range. So, the team ran several analyses—one assuming 1,500 attendees, another assuming 1,600 attendees, and so on up to 2,000 attendees. These analyses would tell us which scenarios would result in the highest and lowest net incomes. Additionally, the team acquired historical data that showed attendance trends based on the conference location, which allowed the team members to make a more informed estimate of which attendance scenario was more likely to occur for the 2016 conference.

For the second challenge, a careful review of the cost data from past conferences revealed that among dozens of cost items, four accounted for 45%–55% of the total cost. These four major cost items were: the Welcome Celebration, breakfasts, coffee breaks, and audio/visual (AV). So, the team decided to focus on obtaining pricing information on these four items and then projected the total cost by adding a certain percentage to the total of these four items.

Having found solutions to both challenges, the ad hoc team built a mathematical model for projecting the cost of the Annual Conference. This model had one input variable—the number of paid attendees—and four major parameters: unit F&B price for the Welcome Celebration reception, unit F&B price for breakfasts, unit F&B price for coffee breaks, and total AV price. The team then ran the calculation, each time with a different input number (attendance scenario), and obtained a projected net revenue for each of the scenarios. The results were provided to the conference organizer (the president-elect), who set the pricing for conference registration after considering the projected numbers, input from the Board and ATA staff, as well as other factors.

How did the conference pricing tool perform?

The 2016 ATA Annual Conference in San Francisco (ATA57) currently shows a total revenue and cost of $1,064k and $781k (including overhead of $160k), respectively, for a net profit of $283k, similar to $287k for ATA56 in Miami. The net profit, however, will change upon the conclusion of the fiscal year ending on June 30, 2017, when the conference overhead of $160k is adjusted based on total annual expenses and total staff hours, salaries, and benefits. The final conference overhead is expected to range between $200k and $265k, leaving a net conference profit between $178k to $293k.

The conference pricing tool was designed to provide conservative figures for both revenues and expenses in accordance with good accounting practices. The total revenue was underestimated by a reasonable amount, as it should be. Major costs, including F&B, should ideally be overestimated in a conservative approach, but for ATA57, F&B costs were in fact underestimated. This can be taken into account when planning the activities at the next conference. If the total overhead comes in as expected, the end result will be very close to the projection. As expected, the projections for some individual items were off the mark, but overall the projections were as accurate as could be reasonably expected given the quality of the obtainable data and uncertainty inherent in the estimates and assumptions.

Additional Thoughts

The net surplus from the Annual Conference is encouraging. Given that the conference incurs the highest expenses and generates the most revenues among all ATA programs, a net surplus from the conference is a major contributor to ATA’s sound financial footing and can help expand the Association’s offering that benefit all members. Over the past couple of years, the Association has made great strides on its path to financial stability, and it should continue to stay the course.

Acknowledgment

A tool that is not used is useless. While the conference pricing tool proved to be quite good, it was the conference organizer, Corinne McKay, who used the tool in her decision-making and allowed it to help determine the registration fees for the conference. The entire Board believed in the importance of financial stability and encouraged the development and use of this tool. Our Executive Director Walter Bacak, Accounting and Finance Manager Kirk Lawson, and Meetings Manager Teresa Kelly played crucial roles in obtaining quality input data, and together with Ted Wozniak, our treasurer, they reviewed and improved the tool.

Note
  1. Wozniak, Ted and Evelyn Yang Garland. “Money Matters: The Story Behind Numbers and Board Decisions,” The ATA Chronicle (July/August 2015), 7,
    http://bit.ly/Chronicle-July-August.

Evelyn Yang Garland is an ATA director and a member of ATA’s Finance and Audit Committee. She is the owner and manager of Acta Chinese Language Services, a firm specializing in Chinese to/from English translation for business, legal, and government clients. In addition to managing the firm, she spends a significant portion of her time translating and editing, with a special interest in advertising and marketing projects. She is an ATA-certified English>Chinese translator and Maryland court-certified Mandarin interpreter based in the Washington, DC area. She recently led a team that translated a book by Chinese President Xi Jinping. Contact: egarland@actalanguage.com.

John M. Milan is a member of ATA’s Finance and Audit Committee. He is an ATA-certified translator (Portuguese>English), economist, writer, and lecturer, with over 20 years of experience in language services. He has an MS in microeconomics from Ohio State University, where he was a foreign language and area studies fellow, concomitantly specializing in Portuguese translation during his graduate studies. He also has degrees in international political economy and Spanish from Indiana University, and studied abroad in Madrid, Spain, as an undergraduate. He has been involved in the Carolina Association of Translators and Interpreters (CATI) for over 10 years. He served on CATI’s board of directors for eight years and as its president from 2013-2016. From 1996-2005, he was based in São Paulo, Brazil, lecturing as an adjunct professor of economics at a local university while also working as a freelance translator and consultant. Contact: john@milanlanguageservices.com.

Ted R. Wozniak, an ATA-certified German>English translator, is the treasurer of ATA. He has bachelor’s degrees in accounting and German and is a graduate of the Defense Language Institute. Before becoming a freelancer, he was an accountant, stockbroker, liaison officer in Germany, and an interrogation instructor at the U.S. Army Intelligence School. After pursuing graduate studies in Germanics, he became a German>English translator specializing in finance, accounting, and taxation. He is also the president of Payment Practices, an online database of translation company payment practices. He is the moderator of Finanztrans, a mailing list for German financial translators. Contact: ted@tedwozniak.net.

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