QUERY Investing in the field (was Capitalize System Dynamics

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""Bob Cavana"" <Bob.Cavana@vu
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Posts: 14
Joined: Fri Mar 29, 2002 3:39 am

QUERY Investing in the field (was Capitalize System Dynamics

Post by ""Bob Cavana"" <Bob.Cavana@vu »

Posted by ""Bob Cavana"" <Bob.Cavana@vuw.ac.nz>

WAS Please Capitalize System Dynamics

hi all,

my comments relate to:

(2) John Sterman's & Carl Betterton's suggestion that ""folks involved in the
field and on this list help us celebrate the 50th anniversary of the field
by making a voluntary donation to the System Dynamics Society. ""

i find this request somewhat bewildering, without further details.

the minutes of the 2006 general business meeting of the SDS Policy Council in Radboud University, Nijmegen, The Netherlands show that in the report of the VP
Finance: ... ""He noted the Society is healthy with a $400,000+ cash balance and that the 2007 Budget just approved shows about a $20,000 surplus with the major income items conference registrations, membership fees, and product sales and the major expenses salaries and conference expenses.""

If members are expected to make further donations to SDS what will this money be devoted to? With a cash balance of over US$400,000 the SDS looks to be in a very healthy financial state!!

Now if these donations were being requested to help, for example, the development of system dynamics (or SD projects/activities/membership etc) in poorer parts of the world, then we could understand where these donations might end up, rather than just adding to the already impressive cash resources of the SD Society.

I think we need a greater 'vision' for these 50th SD anniverary donations.

all the best,

Bob

A/Prof Bob Cavana
Victoria Management School
Posted by ""Bob Cavana"" <Bob.Cavana@vuw.ac.nz> posting date Sun, 25 Mar 2007 08:52:35 +1200 _______________________________________________
""Louis Macovsky"" <dynbiosys
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Posts: 5
Joined: Fri Mar 29, 2002 3:39 am

QUERY Investing in the field (was Capitalize System Dynamics

Post by ""Louis Macovsky"" <dynbiosys »

Posted by ""Louis Macovsky"" <dynbiosys@verizon.net>

IF there is a question of how or where to spend Society money, I firmly believe the answer is to fund teachers and their programs to teach SD in K-12. This would include, as put in another recent discussion thread, funding high school students, undergraduates, and graduate students as interns in governmental offices.

Lou
Posted by ""Louis Macovsky"" <dynbiosys@verizon.net>
posting date Sun, 25 Mar 2007 10:26:00 -0700
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John Sterman <jsterman@MIT.ED
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QUERY Investing in the field (was Capitalize System Dynamics

Post by John Sterman <jsterman@MIT.ED »

Posted by John Sterman <jsterman@MIT.EDU>

Bob Cavana asks excellent questions about the need for additional financial resources and the ways in which such resources might be used by the System Dynamics Society.

The financial position of the society is as healthy as it is through the hard work of many members, who volunteer countless hours, and of the Society home office staff, especially Roberta Spencer. Roberta and the other staff keep expenses low and generate revenue through activities such as sales of the beer game. We are also fortunate to have the support of a number of sponsors, including a large number of companies in the system dynamics field, some universities, and some individuals. We are very grateful to them for their support.

Nevertheless, the Society is financially constrained in a number of ways.

First, we cannot afford to run the conferences at a loss. Because the majority of the members are in Europe and North America, conferences run outside these locations have historically attracted much lower attendance and generated much less revenue. Despite this we have run our conferences in China, Thailand, and New Zealand. It would be highly beneficial for the field if we could run conferences outside NA and Europe more often, or in addition to the regular conferences, but at present we cannot afford to do so.

Second, the Society is growing. As it does, the load on the home office grows as well. However, at present financial resources do not permit us to add the staff needed to keep service high or respond to the requests of members for additional services. Given the substantial research in system dynamics on the dynamics of organizational growth and service quality, it would be ironic indeed if the growth of the field was limited due to staff shortages, particularly in light of the long discussion on this list regarding the growth of the field.

Third, greater financial resources would allow the Society to expand our existing programs to offer student discounts for the conferences and subsidized conference attendance and membership dues for those with limited financial means.

We run a tight fiscal ship, with high efficiency. But the growth of the field and our ability to reduce the cost of participation in Society activities is constrained by our limited financial resources. Donations to the Society are a high leverage point to increase the growth of the field.

John Sterman
Posted by John Sterman <jsterman@MIT.EDU> posting date Sun, 25 Mar 2007 11:14:43 -0400 _______________________________________________
Rod MacDonald <Rod@isdps.org&
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QUERY Investing in the field (was Capitalize System Dynamics

Post by Rod MacDonald <Rod@isdps.org& »

Posted by Rod MacDonald <Rod@isdps.org>

Hello Folks,

I think the note from Carl Betterton and John Sterman about making a donation to the System Dynamics Society in honor of the 50th anniversary is an excellent idea.

I have worked in nonprofits for many years and have sat on numerous nonprofit boards. The most difficult form of fund raising is for money to cover general administration along with reserve funds for a rainy day. Funds targeted for special purposes are desirable,
important and can be solicited from a relatively large donor base.
When the solicitation for the Dana Meadows Student Award was set up I found it easy to give money for this purpose as well as to ask friends and family to consider donating to this worthy cause.
I believe that many people from outside the Society membership helped to secure the funds so that the Dana Meadows Award would be ongoing.

The $400,000 reserve that the Society currently has is great and should be attributed to everyone who has contributed their time and efforts to the Society, our members, policy council, our board
officers past and present and the Society staff. The Society is in
good financial shape. However, a string of bad luck and the Society could be in trouble. The future of the Society will not be secure until we are capable of operating the organization off of the interest generated by our savings.

The Society does not help the poor, feed the hungry or work to cure cancer. We are a 501(c)3 organization that falls into the scientific and educational category. I do not believe asking outsiders to
support us is feasible or something I would be comfortable doing.
Therefore, funding needs to come from members. Funding that would go into a rainy day fund and/or work toward raising enough funds to make the Society secure.

I encourage members to consider making a general donation. Not for any specific purpose, but just because you desire a Society that is even more financially secure.

Sincerely,

Rod MacDonald
Initiative for System Dynamics in the Public Sector Rockefeller College of Public Affairs and Policy University at Albany Posted by Rod MacDonald <Rod@isdps.org> posting date Mon, 26 Mar 2007 07:14:28 -0400 _______________________________________________
Sean Morgan <Morgan@JantzMorg
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QUERY Investing in the field (was Capitalize System Dynamics

Post by Sean Morgan <Morgan@JantzMorg »

Posted by Sean Morgan <Morgan@JantzMorgan.com>

Hi Folks,

I would like to add one more point to the comments on the Society's financial resources.

For the Society to flourish it needs to be self sustaining. Currently it lives hand to mouth, for while $400,000 may seem like a lot of money, it is in fact not nearly enough to generate a reasonable flow of operating funds. Assume for example that the Society's investments earn a long-term average of 7% annually (one could estimate higher or lower depending upon how conservatively the portfolio is managed, but this is probably in the ballpark for a 50/50 mix of stocks and bonds). At that rate, the $400,000 only generates $28,000 for the Society, which might cover postage, office supples, and the phone bill. However, were the principle $5 million, that same 7% return would generate $350,000 -- a number that would probably meet the Society's basic needs.

Our goal should be to build the Society's financial resources to a point where it can be truly self sufficient ($5 million would be a good place to start). At that point, it would have the financial strength to do many of the exciting things that we all feel are important. But for that to happen, we first need to arrange to keep the lights on.

-- Sean
Posted by Sean Morgan <Morgan@JantzMorgan.com> posting date Tue, 27 Mar 2007 12:33:15 -0400 _______________________________________________
Jean-Jacques Laublé <jean-jac
Senior Member
Posts: 61
Joined: Fri Mar 29, 2002 3:39 am

QUERY Investing in the field (was Capitalize System Dynamics

Post by Jean-Jacques Laublé <jean-jac »

Posted by Jean-Jacques Laublé <jean-jacques.lauble@wanadoo.fr>

Hi everybody.

A remark about the financial resources of the SD Society.
It is generally not considered as a good practice to leave, in an organisation, resources whose destination is not clearly defined.
Are these resources assigned to eventual hard times in the future or can they be eventually used for some special occasions etc..?
What sort of risk does a Society like SD incur?
If the resources are assigned to eventual hard times a good practice is to take them outside the society in a special structure, so that if hard times happen the money is still there and has not been used in the meanwhile. Any unused resources will always be used with the time or may eventually disappear. It is better to have a lean organisation than a fat one.

Only people that have experienced hard times know that it can exist.

If the money is contained in a special structure, it can always be decided that it will be used for a special event, but this use will be decided and not happen without purpose.

I say that because I have worked in a fat society for years and when the environment became harder we first burnt the fat (it took more than 15
years) before trying to change the way we were working.
We did not feel that it was necessary to change our methods because our reserves permitted us to wait and see. We hoped that the future would change for our benefit without making any effort. In fact our financial reserves gave us a false sensation of security.
If the money (the fat) had been contained in an outside structure or even distributed to the shareholders we would be now in a complete different situation than we are now.
We are now lean (and at last more efficient), not by choice but by force.

A saying in French tells that the necessity is a good adviser.
Regards.
Jean-Jacques Laublé .

Strasbourg France.
Posted by Jean-Jacques Laublé <jean-jacques.lauble@wanadoo.fr> posting date Wed, 28 Mar 2007 18:24:18 +0200 _______________________________________________
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