Symposium on Money Management
The Association
H. Don Mahan*
Any discussion of the economics of veterinary medicine and the money management by the individual veterinarian must include a realistic study of the role the association plays in the total business activity of that veterinarian. Question any assembly of veterinarians as to the role, function, and posture of their professional association, and it is most probable that the answers will be variegated and diversified. From such a survey it is predictable that the majority do not identify with the association's programs, nor do the majority show a factual acquaintance with the association's role in their day to day business lives. This broad divergence in interpretation is undoubtedly spawned in the casualness given the subject in the veterinarian's undergraduate education, and is fertilized with a continuing application of misinformation, misrepresentation, and lack of personal involvement. It is the opinion of this writer that the failure of associations to gain proper recognition from the membership as to the importance of a formal alliance is generally a result of misplaced appeals. The basic business training and instinct of the veterinarian has prepared him for certain business expenses. He recognizes and accepts the necessity of allocating a percentage of his gross income to maintaining an operating facility that is both efficient and aesthetic. He understands the value of competent and productive employees, and unhesitatingly assigns a commensurate proportion of the business gross to this vital department. He cheerfully responds to invitations of accepted advertising and promotion by participating in various community activities, and considers this business expense not only vital but worthy of its prominent budgetary priority. Added to these quasi-elective business expenses are the locked in, legislative, mandated expenditures, most of which are nonproductive dependents. The aggregate total of the cost of operating the average veterinary practice is approximately 65 per *Southern California Veterinary Medical Association, Pico Rivera, California Veterinary Clinics of North America- Vol. 6, No. I, February I 976
149
150
H.
DoN MAHAN
cent of the business gross. Currently, the veterinarian in California spends an average of .0025 of his gross business income for association expense! According to the United States Department of Commerce, underfinancing is a prime cause of business failure, and this is seen particularly in smaller, nonpublic companies and corporations. It is probable that the ineffectiveness, and the failure of the association to be more constructive in its role of promoting veterinary medicine are intimately .identified with its less than adequate financing. Prior to discussing the various activities of an association, together with a reasonable budget for those programs, it is important to clarify the role, responsibility, and purpose of a professional association. The association has been properly labeled a cornerstone of our free enterprise system. The late President Herbert Hoover observed, "The voluntary forces of America's trade and professional associations can accomplish more for our country than any spread of the hand of government." Supreme Court justice Louis D. Brandeis stated,"An association is an organization for muwal benefit, which substitutes kn"owledge for ignorance, rumor, guess and suspicion." Wherever and whenev~ society encourages active association participation and leadership, that society is enriched. An association is likened to strands of fiber woven into rope. As an individual strand it is held captive by its weakness, unable to sustain itself or to provide a meaningful service. But once joined with other strands, its strength and energy become forceful and productive. It has been suggested that the fruits of professionalism can only mature in a climate of harmonious membership alliance. As a matter of fact, where there is an absence of self-regulation, self-discipline, and voluntary compliance with a code of professional standards, there can be no profession.· · ~ontrary to the image held by some, an association is not a foreign entity, selfishly created for its own advantage and perpetuation. Viewed in its proper light, an association is a service utensil, brought into existence to provide certain functions usually beyond the resources of the individual. Under this definition, precaution should be taken to neutralize the association's influence in those areas in which the individual can better act alone. Some of the programs best suited to the broad, collective influence of the association are continuing education, public relations, legislative programs and representation, community services, and other activities demanding a membership alliance for maximum effectiveness. All of these activities, although often serving other than the material needs of the individual, are measurable assets of the business, and are deserving of their budgetary position in direct proportion to their contribution to the business income.
THE
AssoCIATION
151
ASSOCIATION'S ROLE IN CONTINUING EDUCATION Continuing education for the professional person is generally recognized and accepted as the laboratory ... for energizing and updating the professional person's delivery system fof his services. Few, if any, will dispute the absolute need for a sophisticated program of perpetuating learning. The rapidity of change, and the continuous and uninterrupted introduction of new and advanced knowledge, dictate a liberal consideration for continuing education in the veterinarian's business expense. The cost of continuing education has shown and continues to show a dramatic increase as a result of expanding and enhancing the broad spectrum of programming. As demands for expanded subject material and learning techniques are magnified, costs are obligated to increase proportionately. To meet the current demands of members for effective continuing education programming, and to keep pace with the constant growth and development of material and techniques for the next decade, associations will need to find financing several times that presently budgeted for this activity. This increased budget will be required to expand the learning processes geographically, both as a convenience and as a logistic necessity. Increased financing for training aids, essential for the production of today's educational materials, will be an indispensable and substantial burden upon tomorrow's continuing education budget. Persons skilled in administration and management, essential' requisites to any successful program, will need to be recruited and used in the direction and production of education programs in the future. Although it is necessary to successfully persuade a unification of all levels of organizations serving veterinary medicine, and develop a master plan for the broadest dissemination of continuing education, each level-local, state, and national- has an important and essential part to play in delivering continuing education to the membership. However, since the purpose of this article is to discuss the responsibility of the local association in fulfilling its obligations to the membership, this space will be limited to local planning and financing. The nucleus of any association endeavor is a committee, comprised of individuals having a particular interest in their assigned subject, clearly and succinctly charged with their responsibility and authority, and provided with a budget commensurate with this membership service. Although different options for financing continuing education are available to the local association, i.e., registration fee, association subsidy, etc., it remains the association's responsibility to underwrite the activity. Even with inestimable contribution made by the voluntary
152
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DoN MAHAN
committee, it really is not feasible to produce and bring to the stage an effective continuing education program, at the level even now demanded by the membership, without an appropriate budget. The cost of continuing education programming varies in proportion to the membership size. In an association with a membership the size of the Southern California Veterinary Medical Association, continuing education represents an association expense of approximately $25 per member, or about 12 per cent of the association's annual budget. Associations with fewer members can expect a proportionately greater expense to satisfy this important function of the association.
PUBLIC RELATIONS FOR A PROFESSION A professional association, by reason of its membership's self-imposed restrictions against use of advertising and marketing techniques popularly employed by much of the business world, is limited in its public announcements of its existence, and required to substitute parochial merchandising in the selling of its services. This confined approach of communicating between buyer and seller, although having its reward of respectability, could have a detrimental effect upon the interest of the public and the profession if it were not for the association, and its license, mission, and charge to transmit and disclose the existence and benefits of veterinary medicine. For this purpose, an ongoing, professional, and highly visible public relations program by the association is an important asset to the veterinarian. There are probably more definitions for "public relations" than for any other subject. Therefore it is not the intent of this writer to add to these multiple interpretations, but rather to suggest that public relations, when used in relationship to a professional association, comprises: (1) information given to the public, (2) persuasion aimed at the public, designed to alter or transform opinions and actions, and (3) efforts to unite the opinions and actions of the association with the public. For a public relations program to be meaningful, it must have the support of a responsible program; appealing to the interest of the public. The association is most able and best equipped to produce, administer, and direct this invaluable service for its professional member. Of all the programs listed under the average veterinary association's index of functions, none is more important to the direct economic welfare of the member, nor is there any program suffering more from under-financing than is public relations. It is not unusual for the average proprietary business to budget 15 per cent of its gross income for advertising, and this budgetary item often enjoys a sanctity and an inviolability not generally applied to other expenses. Under this philosophy, a veterinary hospital grossing $100,000 could reasonably commit
THE ASSOCIATION
153
$15 ,000 to its advertising budget and be well within good business management. In reviewing budgets of associations, "public relations" is most often not listed, and even when appearing as a budgetary item, fund ing is insignificant and not representative of this activity's potential contribution to the objective and constructive growth of veterinary medicine. In an age in which a multiplicity of interests are engaged in an accelerated contest for favorable recognition and acceptance of their products and services, it is to the advantage of the veterinary profession to use all available resources toward achieving greater visibility. Meaningful public relations seldom if ever occurs by chance but is rather a result of responsible planning and developing, which are best accomplished within a program supported by professional management and adequate financing to gain a desired conclusion. The local association is limited in its selection of public relations programs by its available funding. However, with careful designing of its program, and a commitment to a successful finalization , public relations can be the member's best investment. INVOLVEMENT IN THE LEGISlATIVE PROCESS
According to the ancient philosopher, Aristotle, "Man is by nature a political animal." In his search for material gain and recognition-education, money, and politics are probably the most influential forces determining man's success. Fortunately or unfortunately, politics decides the effectiveness of education and money. Probably politics is the only area devoid of neutrality. We enjoy it or we dislike it, we are for it or we are against it, we trust it or we distrust it, we are actively involved or we are inactively involved. Regardless of our approach to the realism of politics, we are inescapably a part of society's major activity. On the average, the professional person's political posture ranges from conservative to noninvolvement. On a scale of 10, his total activity in the political arena would probably measure somewhere between 1 and 2. Until recently, this political posture had minimal effects upon his professional life, and there was little cause to suggest a change in i!}terest. However, with the arrival of government by organized influence, and special interest politics, the professional person can no longer survive on the sidelines, nor can he survive in the business world of today by acting as his own legislative advocate. Representing the membership in legislative matters is a rather recent function of the association, but is an activity assuming greater priority and demanding more attention and resources from the association. This concern with becoming involved in legislative decision was a
154
H.
DoN MAHAN
result of witnessing harmful legislation introduced and enacted without benefit of counsel from the veterinary profession. Although a costly lesson to learn for not being interested and involved, some of the anti-veterinary legislation has probably been a blessing in disguise since it has prompted a change in the professional person's attitude regarding his responsibility in the political scene. The association has two m~or tasks to perform in its political activities. First, it has the responsibility to support candidates seeking political office whose political and business philosophy is most compatible with its membership. Secondly, the association is obliged to persuade the office-holder to give responsible attention to the association's opinion and recommendations. Regarding the support of friendly candidates, financial support is essential. In today's business of politics, money or the lack of it is the key to success or failure. Even in campaigns for minor offices, candidates can consume money like a giant rocket consumes fuel. If the profession is to have an equal voice in the important decisions resulting from our political process, it must be prepared to support its association with adequate funding of the organization's political activity. The association's responsibility does not end with the campaign and tallying of votes. It is obligated to keep a daily watch on the legislative sessions, and be prepared to submit factual and dominant persuasion in support of the profession's interest. In effect, the legislative function of the association is an ongoing, never-ending program. To maintain an acceptable legislative program is an expensive venture, but to ignore the need for this program, and to deny or question the program's value, is even more costly.
LESS VISIBLE BUT ESSENTIAL PROGRAMS Early in this article, the author suggested that the financial support given the association was deserving of equal consideration with other business costs, normally viewed as productive contributors to the business. In previous paragraphs, the reader has been provided with background on some of the association's responsibilities and programs, the contributions which these programs render to the member, and hopefully an appreciation and understanding of these programs' cost. Not mentioned, due to limited space, are the dozens of routine, but not unimportant, services which the association performs on a continuing schedule. The association is the communications center for its profession and for the public which the profession serves. From this center, vol umes of materials representing the policies, position, and the very char acter of the profession are disseminated to a large and varied reader
THE
AssociATION
155
ship. Additional information and persuasive appeals are broadcasted daily by telephone. The "clients" of the association represent a broad audience of varying interests, authority, and personality. Directing and operating this highly sensitive function demand skillful and imaginative personnel who are schooled in the advanced art of diplomacy. To recruit and maintain the level of employees demanded of this responsible representation requires substantial financial support for the association. On occasion, attempts are made to compare the membership dues in a professional association with those dues paid by members of trade and other organizations. This author is of the opinion that such comparison is irrelevant and lacks validity. Each alliance. is created for a specific purpose to represent the interest of its particular membership; therefore the funding required to achieve the purpose of one organization may differ dramatically from that required by another. Though there seems to be appealing evidence to substantiate an increase in membership support of the professional association, this increase should not be solicited on any basis other than the actual financial need for funding the official programs of the association. As stressed in this article, the association is a viable and intimate confrere of the veterinarian. It is an extension of his business function and effectiveness. It is the cornerstone of his enterprise, supporting and protecting his professional and business future. Southern California Veterinary Medical Association 8338 South Rosemead Boulevard Pico Rivera, California 90660
The Association
H. Don Mahan*
Any discussion of the economics of veterinary medicine and the money management by the individual veterinarian must include a realistic study of the role the association plays in the total business activity of that veterinarian. Question any assembly of veterinarians as to the role, function, and posture of their professional association, and it is most probable that the answers will be variegated and diversified. From such a survey it is predictable that the majority do not identify with the association's programs, nor do the majority show a factual acquaintance with the association's role in their day to day business lives. This broad divergence in interpretation is undoubtedly spawned in the casualness given the subject in the veterinarian's undergraduate education, and is fertilized with a continuing application of misinformation, misrepresentation, and lack of personal involvement. It is the opinion of this writer that the failure of associations to gain proper recognition from the membership as to the importance of a formal alliance is generally a result of misplaced appeals. The basic business training and instinct of the veterinarian has prepared him for certain business expenses. He recognizes and accepts the necessity of allocating a percentage of his gross income to maintaining an operating facility that is both efficient and aesthetic. He understands the value of competent and productive employees, and unhesitatingly assigns a commensurate proportion of the business gross to this vital department. He cheerfully responds to invitations of accepted advertising and promotion by participating in various community activities, and considers this business expense not only vital but worthy of its prominent budgetary priority. Added to these quasi-elective business expenses are the locked in, legislative, mandated expenditures, most of which are nonproductive dependents. The aggregate total of the cost of operating the average veterinary practice is approximately 65 per *Southern California Veterinary Medical Association, Pico Rivera, California Veterinary Clinics of North America- Vol. 6, No. I, February I 976
149
150
H.
DoN MAHAN
cent of the business gross. Currently, the veterinarian in California spends an average of .0025 of his gross business income for association expense! According to the United States Department of Commerce, underfinancing is a prime cause of business failure, and this is seen particularly in smaller, nonpublic companies and corporations. It is probable that the ineffectiveness, and the failure of the association to be more constructive in its role of promoting veterinary medicine are intimately .identified with its less than adequate financing. Prior to discussing the various activities of an association, together with a reasonable budget for those programs, it is important to clarify the role, responsibility, and purpose of a professional association. The association has been properly labeled a cornerstone of our free enterprise system. The late President Herbert Hoover observed, "The voluntary forces of America's trade and professional associations can accomplish more for our country than any spread of the hand of government." Supreme Court justice Louis D. Brandeis stated,"An association is an organization for muwal benefit, which substitutes kn"owledge for ignorance, rumor, guess and suspicion." Wherever and whenev~ society encourages active association participation and leadership, that society is enriched. An association is likened to strands of fiber woven into rope. As an individual strand it is held captive by its weakness, unable to sustain itself or to provide a meaningful service. But once joined with other strands, its strength and energy become forceful and productive. It has been suggested that the fruits of professionalism can only mature in a climate of harmonious membership alliance. As a matter of fact, where there is an absence of self-regulation, self-discipline, and voluntary compliance with a code of professional standards, there can be no profession.· · ~ontrary to the image held by some, an association is not a foreign entity, selfishly created for its own advantage and perpetuation. Viewed in its proper light, an association is a service utensil, brought into existence to provide certain functions usually beyond the resources of the individual. Under this definition, precaution should be taken to neutralize the association's influence in those areas in which the individual can better act alone. Some of the programs best suited to the broad, collective influence of the association are continuing education, public relations, legislative programs and representation, community services, and other activities demanding a membership alliance for maximum effectiveness. All of these activities, although often serving other than the material needs of the individual, are measurable assets of the business, and are deserving of their budgetary position in direct proportion to their contribution to the business income.
THE
AssoCIATION
151
ASSOCIATION'S ROLE IN CONTINUING EDUCATION Continuing education for the professional person is generally recognized and accepted as the laboratory ... for energizing and updating the professional person's delivery system fof his services. Few, if any, will dispute the absolute need for a sophisticated program of perpetuating learning. The rapidity of change, and the continuous and uninterrupted introduction of new and advanced knowledge, dictate a liberal consideration for continuing education in the veterinarian's business expense. The cost of continuing education has shown and continues to show a dramatic increase as a result of expanding and enhancing the broad spectrum of programming. As demands for expanded subject material and learning techniques are magnified, costs are obligated to increase proportionately. To meet the current demands of members for effective continuing education programming, and to keep pace with the constant growth and development of material and techniques for the next decade, associations will need to find financing several times that presently budgeted for this activity. This increased budget will be required to expand the learning processes geographically, both as a convenience and as a logistic necessity. Increased financing for training aids, essential for the production of today's educational materials, will be an indispensable and substantial burden upon tomorrow's continuing education budget. Persons skilled in administration and management, essential' requisites to any successful program, will need to be recruited and used in the direction and production of education programs in the future. Although it is necessary to successfully persuade a unification of all levels of organizations serving veterinary medicine, and develop a master plan for the broadest dissemination of continuing education, each level-local, state, and national- has an important and essential part to play in delivering continuing education to the membership. However, since the purpose of this article is to discuss the responsibility of the local association in fulfilling its obligations to the membership, this space will be limited to local planning and financing. The nucleus of any association endeavor is a committee, comprised of individuals having a particular interest in their assigned subject, clearly and succinctly charged with their responsibility and authority, and provided with a budget commensurate with this membership service. Although different options for financing continuing education are available to the local association, i.e., registration fee, association subsidy, etc., it remains the association's responsibility to underwrite the activity. Even with inestimable contribution made by the voluntary
152
H.
DoN MAHAN
committee, it really is not feasible to produce and bring to the stage an effective continuing education program, at the level even now demanded by the membership, without an appropriate budget. The cost of continuing education programming varies in proportion to the membership size. In an association with a membership the size of the Southern California Veterinary Medical Association, continuing education represents an association expense of approximately $25 per member, or about 12 per cent of the association's annual budget. Associations with fewer members can expect a proportionately greater expense to satisfy this important function of the association.
PUBLIC RELATIONS FOR A PROFESSION A professional association, by reason of its membership's self-imposed restrictions against use of advertising and marketing techniques popularly employed by much of the business world, is limited in its public announcements of its existence, and required to substitute parochial merchandising in the selling of its services. This confined approach of communicating between buyer and seller, although having its reward of respectability, could have a detrimental effect upon the interest of the public and the profession if it were not for the association, and its license, mission, and charge to transmit and disclose the existence and benefits of veterinary medicine. For this purpose, an ongoing, professional, and highly visible public relations program by the association is an important asset to the veterinarian. There are probably more definitions for "public relations" than for any other subject. Therefore it is not the intent of this writer to add to these multiple interpretations, but rather to suggest that public relations, when used in relationship to a professional association, comprises: (1) information given to the public, (2) persuasion aimed at the public, designed to alter or transform opinions and actions, and (3) efforts to unite the opinions and actions of the association with the public. For a public relations program to be meaningful, it must have the support of a responsible program; appealing to the interest of the public. The association is most able and best equipped to produce, administer, and direct this invaluable service for its professional member. Of all the programs listed under the average veterinary association's index of functions, none is more important to the direct economic welfare of the member, nor is there any program suffering more from under-financing than is public relations. It is not unusual for the average proprietary business to budget 15 per cent of its gross income for advertising, and this budgetary item often enjoys a sanctity and an inviolability not generally applied to other expenses. Under this philosophy, a veterinary hospital grossing $100,000 could reasonably commit
THE ASSOCIATION
153
$15 ,000 to its advertising budget and be well within good business management. In reviewing budgets of associations, "public relations" is most often not listed, and even when appearing as a budgetary item, fund ing is insignificant and not representative of this activity's potential contribution to the objective and constructive growth of veterinary medicine. In an age in which a multiplicity of interests are engaged in an accelerated contest for favorable recognition and acceptance of their products and services, it is to the advantage of the veterinary profession to use all available resources toward achieving greater visibility. Meaningful public relations seldom if ever occurs by chance but is rather a result of responsible planning and developing, which are best accomplished within a program supported by professional management and adequate financing to gain a desired conclusion. The local association is limited in its selection of public relations programs by its available funding. However, with careful designing of its program, and a commitment to a successful finalization , public relations can be the member's best investment. INVOLVEMENT IN THE LEGISlATIVE PROCESS
According to the ancient philosopher, Aristotle, "Man is by nature a political animal." In his search for material gain and recognition-education, money, and politics are probably the most influential forces determining man's success. Fortunately or unfortunately, politics decides the effectiveness of education and money. Probably politics is the only area devoid of neutrality. We enjoy it or we dislike it, we are for it or we are against it, we trust it or we distrust it, we are actively involved or we are inactively involved. Regardless of our approach to the realism of politics, we are inescapably a part of society's major activity. On the average, the professional person's political posture ranges from conservative to noninvolvement. On a scale of 10, his total activity in the political arena would probably measure somewhere between 1 and 2. Until recently, this political posture had minimal effects upon his professional life, and there was little cause to suggest a change in i!}terest. However, with the arrival of government by organized influence, and special interest politics, the professional person can no longer survive on the sidelines, nor can he survive in the business world of today by acting as his own legislative advocate. Representing the membership in legislative matters is a rather recent function of the association, but is an activity assuming greater priority and demanding more attention and resources from the association. This concern with becoming involved in legislative decision was a
154
H.
DoN MAHAN
result of witnessing harmful legislation introduced and enacted without benefit of counsel from the veterinary profession. Although a costly lesson to learn for not being interested and involved, some of the anti-veterinary legislation has probably been a blessing in disguise since it has prompted a change in the professional person's attitude regarding his responsibility in the political scene. The association has two m~or tasks to perform in its political activities. First, it has the responsibility to support candidates seeking political office whose political and business philosophy is most compatible with its membership. Secondly, the association is obliged to persuade the office-holder to give responsible attention to the association's opinion and recommendations. Regarding the support of friendly candidates, financial support is essential. In today's business of politics, money or the lack of it is the key to success or failure. Even in campaigns for minor offices, candidates can consume money like a giant rocket consumes fuel. If the profession is to have an equal voice in the important decisions resulting from our political process, it must be prepared to support its association with adequate funding of the organization's political activity. The association's responsibility does not end with the campaign and tallying of votes. It is obligated to keep a daily watch on the legislative sessions, and be prepared to submit factual and dominant persuasion in support of the profession's interest. In effect, the legislative function of the association is an ongoing, never-ending program. To maintain an acceptable legislative program is an expensive venture, but to ignore the need for this program, and to deny or question the program's value, is even more costly.
LESS VISIBLE BUT ESSENTIAL PROGRAMS Early in this article, the author suggested that the financial support given the association was deserving of equal consideration with other business costs, normally viewed as productive contributors to the business. In previous paragraphs, the reader has been provided with background on some of the association's responsibilities and programs, the contributions which these programs render to the member, and hopefully an appreciation and understanding of these programs' cost. Not mentioned, due to limited space, are the dozens of routine, but not unimportant, services which the association performs on a continuing schedule. The association is the communications center for its profession and for the public which the profession serves. From this center, vol umes of materials representing the policies, position, and the very char acter of the profession are disseminated to a large and varied reader
THE
AssociATION
155
ship. Additional information and persuasive appeals are broadcasted daily by telephone. The "clients" of the association represent a broad audience of varying interests, authority, and personality. Directing and operating this highly sensitive function demand skillful and imaginative personnel who are schooled in the advanced art of diplomacy. To recruit and maintain the level of employees demanded of this responsible representation requires substantial financial support for the association. On occasion, attempts are made to compare the membership dues in a professional association with those dues paid by members of trade and other organizations. This author is of the opinion that such comparison is irrelevant and lacks validity. Each alliance. is created for a specific purpose to represent the interest of its particular membership; therefore the funding required to achieve the purpose of one organization may differ dramatically from that required by another. Though there seems to be appealing evidence to substantiate an increase in membership support of the professional association, this increase should not be solicited on any basis other than the actual financial need for funding the official programs of the association. As stressed in this article, the association is a viable and intimate confrere of the veterinarian. It is an extension of his business function and effectiveness. It is the cornerstone of his enterprise, supporting and protecting his professional and business future. Southern California Veterinary Medical Association 8338 South Rosemead Boulevard Pico Rivera, California 90660
