Hey everyone, it seems like lots of us came back into the hive after the winter holidays fully energized and ready to make the hive better, which is awesome! We have had many votes proposed/passed this month:
- $800 for Hot Crafts Misc. tools
- $200 for Perler Bead Supplies
- $700 for Completing Bathrooms
- $4500 for Multi-Media High Fire Kiln
- $600 for KitchenAid Mixer
In several of those vote threads and discussions, there have been questions about the Hive’s available funds and the “opportunity cost” of using funds for these votes vs. other potential priorities. I just wanted to quickly put together an explainer of how any member can find that information so everyone can have a good idea of where the hive is at financially.
First off, HUGE credit to @JimD, our treasurer. every single month, he posts a great financial summary of our current accounts and a thorough explanation of our reserved and available funds in the #leadership_discussion channel on slack (most recent one here). He also maintains all of our books publicly, found in the Finances section on the main Page of our Wiki.
to copy his last post directly:
December 2022 numbers are now done. We end 2022 with a fantastic BEST EVER month! Consider the following as a BRIEF SUMMARY:
- Membership jumped up from 170 to a new ALL TIME HIGH, now at 182 souls (+7 Full, +3 Student, +2 PlusOne). Way to go team!
- Operating income from membership was $7,123.17. Other operating income was $143.82 consisting of two transactions ($18.82 in soda credits and a $125.00 KevinM donation for lamp gas usage.
- Fixed expenses were higher at ($6,733.14) primarily because our landlord timed cashing two rent checks during December. Fixed expenses included 2x rent ($5,750), insurance ($107.25), PayPal fees ($217.37) and warden expenses ($658.52)
- Discretionary expenses were ($762.85) consisting of member vote reimbursements ($735.48) and soda purchases ($27.37) this month.
- We started the month with $43,856.48 in operating funds and ended the month at $43,627.48. Of this ending balance, $31,699.91 is reserved as “encumbered funds”.
- Encumbered funds include a 6-month operating reserve ($19,410.00), lump-sum membership pre-payments ($983.70), the new “Build-Out Reserve” (@+$1k/month now ($5,202.00) and un-spent member vote reserve ($6,054.21).
- Our discretionary funds are now $16,870.14. We continue to be cash positive going forward.
- In other financial news, your hardworking COO (JohnC) and Treasurer continue efforts to improve the accounting structure and presentation of expenses. Stay tuned for further details…
The open finance site has been updated and (as a new feature) click on this current 2021/2022 summary to see the details.
The key items for our current account balances are:
- We maintain an emergency reserve equal to 6-months of our fixed expenses ($19,410) in case of significant financial instabilities (like an economy crash causing large drop in membership or some other emergency)
- We have begun to reserve $1k/month, with a current balance of $5,202 for future expansion into the dungeon (soft target of the end of this year or some time next year, join the Dungeon Masters meetings for more info)
- Jim maintains a log of other outstanding encumbered/reserved funds, which he details.
- At the start of January, we had $16,870 in “Discretionary” funds. These are the funds which are not reserved/set aside for purposes of existing budgets or reserved for financial stability of the organization. In other words, these are the funds we have available to put towards our mission and improving our facilities to accommodate that mission.
For consideration of votes, that last one is the most important, as it is the money we have available to spend without putting the organization in any risk. Obviously none of us want it to ever get low, but we theoretically could spend all of that at any time and be fine. We don’t do that, to ensure we can always fund improvements and repairs without dipping into the reserves, but we could safely.
Many folks like to think about this stuff on a cashflow, money in/money out per month basis. In those terms it looks like this (again, all from Jim’s fantastic reports):
- we bring in roughly $7100 per month in membership fees.
- we have roughly $3800 per month in fixed expenses (rent, insurance, warden budget
- together, that means we have around $3300 per month that gets added to our available funds.
- Given that we are now reserving $1000 per month for future dungeon buildout, that nets about $2300 per month that we can spend on votes for improvements without reducing our discretionary funds balance.
so when you evaluate votes, one way to think of it is “This $4600 vote is roughly 2 months worth of votes”. Obviously, we can handle larger votes and periods of high vote volume (like this month) because of our discretionary funds balance. But as a general rule, we should strive to pace our spending to match that roughly $2300/month (which we do a pretty good job of by slowing down vote frequency following big purchases like the move to our current building, the recent wood shop tools, the kiln that just passed, etc.).
by this logic, given that we have had $6800 worth of votes this month, if we slowed down the pace of votes to recover to where we were at the beginning of this month, it would only take till around March/April to be fully recovered. However, because we are in the position where we have the $16k of available discretionary funds, we absolutely can still afford to make repair and improvement votes (or use fund for other proposed uses that have been discussed, like hiring class instructors) as needed in that time, without putting the organization under strain or encroaching on the dungeon buildout plans.
Thanks everyone for your time and efforts that you put into maintaining and improving the hive. Because everyone has been so great over the last decade+ at contributing, we have a fantastic facility and wonderful selection of maker activates as the backbone of our community!
Thanks,
Kevin M.
Hive13 Board of Directors and
Hot Crafts Warden