Impact of COVID-19 on ACS finances

A natural question to ask, given the extraordinary impact of COVID-19 on the world, is, “How has this pandemic impacted the American Chemical Society’s finances?” At the Society Committee on Budget and Finance meeting on Aug. 15, ACS staff reported that the finances of ACS are strong, and performance for 2020 should meet or exceed the 2020 approved budget.

ACS has been well positioned and proactive in responding to COVID-19. Mandated office closures and social-distancing rules have drawn on the society’s strengths at using distance work and work-at-home experiences. Our extensive experience with virtual events and webinars helped in the rapid delivery of the first ACS Virtual Meeting and Expo to over 6,500 attendees. Services to members have been quickly enhanced to provide support during these unprecedented times, with offerings such as access to LinkedIn Learning courses and deferrals of dues payments. The important work of the society has continued at full speed.

Through August, ACS remained on pace to meet or exceed its budgeted net operating surplus of $41 million. This is a result of revenue growth of more than 5%. Leading the way on revenues are CAS (a division of ACS) and ACS Publications, both on track with their respective budgets for the year, aided by their subscription-based business models. Expenses through August are more than 2% lower than the same period in 2019. This is the result of careful cost management across the society, lower travel and in-person event expenses, and a cautious approach to filling open staff positions.

The solid results noted above include the impacts of the spring national meeting cancellation and the transition of the fall meeting to a virtual format. ACS national meetings provide important opportunities for chemists from around the world to present their research, learn about groundbreaking work, meet with vendors and suppliers, and create important professional networks. These meetings are budgeted to break even. COVID-19 made in-person gatherings impractical, but staff across ACS responded quickly to minimize any financial impact. While much of the anticipated revenue won’t materialize, expenses were closely managed, and potential liabilities were significantly reduced. Pricing for the fall meeting was set lower than in-person levels and allowed ACS to cover the costs of delivering the meeting virtually.

The impact of the volatile financial environment has been moderated within the ACS investment portfolio. This is due to a relatively high allocation to fixed-income assets, which helped offset the decline in the equity markets earlier in the year. The ACS portfolios, which are overseen by the Pensions and Investments Committee, provide important support to society operations, member and educational programs, and the grants that are provided through the Petroleum Research Fund.

Another action that ACS took was the issuance of $61 million of bonds in May. The proceeds of these bonds, which mature in 2050, have been used to fully fund the society’s closed defined-benefit pension plan. This provides solid assurance to plan participants that their benefits are safe, and it provides greater budgetary stability for ACS in the future.

The year 2020 has posed many unexpected challenges, some of which have not been previously experienced. Unfortunately, those challenges still exist, and others may arise. The society has begun to assemble its projected budget for 2021 with the same careful approach that has served it well in the past 6 months. Scenario planning is in progress so that strategies can be ready in response to a variety of conditions. The Budget and Finance Committee will review management’s proposed 2021 operating budget at its meeting in December and will present it to the board of directors for its approval shortly thereafter.

In 1966, Robert Kennedy observed, “Like it or not, we live in interesting times. They are times of danger and uncertainty; but they are also the most creative of any time in the history of mankind.” Hopefully, we will look back at 2020 and be proud of the work we have all done to weather this COVID-19 pandemic in the safest and most creative way that we could for ourselves, our families, our businesses, and our world. Chemistry will play a central role in overcoming this pandemic, and ACS will continue to support the chemistry enterprise effectively well into the future.

If you have any questions or comments, please do not hesitate to let me know at b_ffeedback@acs.org. Be well, be safe, and best wishes to you and your families.

Views expressed are those of the author and not necessarily those of C&EN or ACS.