ABA Treasurer's Report
Each year, the treasurer provides a report on the association’s finances. In these reports, I seek to provide helpful information about the association’s financial health.
As my three-year term as treasurer has just come to a close, in this departing report, I will cover the association’s finances through the first 10 months of fiscal year 2026 (unaudited), and provide reflections on my tenure and the association’s path forward.
Fiscal year 2026 through June 30 (first 10 months of the fiscal year)
Through June of fiscal year 2026, the association’s net operating deficit of $6.3 million is $13.6 million lower than budgeted and $1.7 million lower than prior year, as seen below.
Consolidated operating revenue of $133.6 million is $7.6 million higher than budget but $43.4 million lower than prior year. Consolidated dues of $36.1 million are $0.5 million lower than budget. The decline in total operating revenue from prior year is due almost completely to a significant decrease in grants revenue. In the spring of 2025, most of the association’s grants from the federal government were terminated by the new U.S. presidential administration. While the grants results explain the year-over-year decline in the association’s revenue, our overperformance relative to budget in fiscal year 2026 is also due to grants, as grants revenue is over $11 million higher than budget.
Consolidated operating expense of $139.9 million is $6.0 million lower than budget and $45.1 million lower than prior year. Grants expense is higher than budget, consistent with the revenue trends that are dependent on this spending. The higher grants activity than budgeted is more than offset by lower expense than budgeted within other reporting segments within the association. The significant decrease in expense from prior year is from less grants activity, due to the grants from the federal government that were terminated in the spring of 2025.
Consolidated total change in net assets includes the operating deficit of $6.3 million, as well as nonoperating (“below the line”) results. Below the operating line, the association had $40.1 million of investment gains, used $4.2 million of investments to support operations, had $3.2 million of nonoperating pension expense, and $0.2 million of other nonoperating revenue. As a result of the activity above, the association’s net assets increased by $26.7 million in the first 10 months of fiscal year 2026.
Audited financial statements for past fiscal years are posted on the association’s website.
Financial position (balance sheet) as of June 30
As of June 30, the association has total assets of $360.6 million and liabilities of $152.9 million, resulting in total net assets of $207.7 million. Of the $207.7 million of total net assets, $134.9 million are unrestricted Sections, Divisions, and Forums (S/D/F) net assets, $35.5 million are unrestricted General Operations net assets, $12.0 million are unrestricted Fund for Justice and Education (FJE) net assets, and $25.2 million are donor-restricted FJE net assets. Below is our association’s balance sheet.
Closing reflections
As I conclude my term as treasurer, I would like to highlight some of our association’s most notable financial accomplishments over the past several years, as well as some of the challenges we still face.
When I became treasurer in August 2023, the association had not raised general dues since fiscal year 2015, and in fiscal year 2020, average dues rates had been reduced by about 20% under a new membership model. After the new membership model was implemented with significantly lower rates; relatively flat membership; and retiring members who pay higher dues replaced by younger members paying lower dues, general dues revenue had declined from $51 million in fiscal year 2019 to $33 million in fiscal year 2024. In fiscal year 2025, a meaningful dues rate increase raised general dues revenue by $2.5 million (7.5%), while membership declined by only 1.5%. This dues rate increase was necessary to mitigate operating deficits and, importantly, let the association continue to invest in its membership product. Potential membership modernization structures are currently being studied, and I am hopeful these efforts will eventually yield increased membership and dues revenue.
Our total pension-related obligation, which stood at $95 million as recently as 2015, is down to $17 million as of June 30, consisting of an estimated $16 million ABA pension obligation to the pension plan and $1 million of outstanding loans to fund the pension plan. The loans to fund the pension plan will be paid off in full at the end of September. Over the past decade, we have been able to reduce by over $78 million (82%) what was once the most significant liability on our balance sheet.
As noted earlier in this report, perhaps the most significant challenge faced by the association in the last three years was the loss of a significant portion of our grants portfolio, resulting from grant terminations by the federal government in 2025. The loss of these grants has meant the association has been able to perform fewer good works for the world. But it also has resulted in financial challenges: Through our Negotiated Indirect Cost Rate Agreement (NICRA) with the federal government, we are able to allocate a portion of our general and administrative expenses to grants in recognition of the support these functions provide to grants. With fewer grants, the association is absorbing more expenses that were previously allocated to grants.
Despite some of these challenges, the association’s total net assets of $208 million as of the end of June are $42 million (25%) higher than the $166 million at the end of fiscal year 2023 when I became treasurer. While the increase in net assets is good news, it has primarily been due to favorable financial market conditions that have benefited our investment portfolio during this period through investment appreciation levels that likely will not be recurring in the future. To preserve the long-term financial health of the association, we must reduce the operating deficits we have been incurring.
Lastly, another important achievement was the approval of a strategic plan in fiscal year 2024, the result of a significant amount of hard work by many staff and members. While developing and approving the strategic plan was an accomplishment, it is imperative that we maintain a commitment across the association to the implementation of this plan. I am hopeful that commitment to the implementation of the strategic plan will improve the health of our association, financial and otherwise.
I wish my successor, Andrew Schpak, great success in his new role as your treasurer.
It has been a privilege to serve as your treasurer.
Fritz Langrock
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