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Adequate Reserves Provide Financial Stability

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Leadership by Saul Klein

RISMEDIA, September 17, 2010—The following should be the general theme of the mission of all real estate associations: to provide a consistent level of service(s) to the membership…day after day, month after month, year after year, business and real estate cycle after business and real estate cycle.

Services should not decline because of general economic conditions. That is why associations build and maintain reserves.

Part of the purpose of reserves, other than to provide financial stability for an association in a time of emergency, is to provide funds when the current income is inadequate to maintain the needed level of service; to help the association continue to offer services to the membership when the members need them most. To cut services in a declining market because of loss of membership and dues income is the sign of a poorly run association.

Plan for the future. Have adequate reserves for a “rainy day.” Generate income from sources other than dues, in small but consistent amounts. Run the association like a business, always keeping in mind that profit is not a dirty word and that the efforts to build reserves are the combined efforts of lots of people over many years and should not be the windfall of those who happen to be members in the year when things are good and the association is making money. Never rebate reserves to members. That is a disservice to all who were members over all the years of the existence of the association.

Tell us what you think at: leaderseries@point2.com

Saul Klein is CEO of Point2 Technologies Inc., author of MLS 5.0 – The MLS of the Future Whitepaper, a licensed real estate broker in California for the past 32 years and 1993 President of the San Diego Association of REALTORS®. He created NAR’s ePRO Technology Certification Program in 2001 and NAR’s Web 2.0 & Social Media Course in 2009. Klein has been providing strategic planning and leadership programs to the industry since 1994 and is a 1972 graduate of the United States Naval Academy at Annapolis.

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