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STATE OF THEAPPRAISAL INSTITUTE
November 2010
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FINANCIAL STATUSAs of August 31, 2010
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Statement of ActivitiesComparison to Prior YearAs of August 31, 2010
($ in 000’s) Favorable (Unfavorable)
2010 2009 $ %
Total Revenue $ 12,568 $ 11,564 $1,004 9%
Total Expense 12,113 12,338 225 2%Net Operating Surplus (Deficit) $ 445 $ (774) $1,229 159%Non-Operating Expense - TAF 178 (178) (100%)
Net Surplus (Deficit) $ 277 $ (774) $1,051
136% 3
Statement of ActivitiesComparison to BudgetAs of August 31, 2010
($ in 000’s) Favorable (Unfavorable)
Actual Budget $ %
Total Revenue $ 12,568 $ 12,977 $ (409) (3%)
Total Expense 12,113 13,082 969 7%Net Operating Surplus (Deficit) $ 445 $ (105) $ 560 533%
Non-Operating Expense - TAF 178
(178) (100%)
Net Surplus (Deficit) $ 277 $ (105) $ 382
364% 4
Total Membership*As of August 31, 2010
2010 2009 % Variance
Renewals and New Members 20,735 21,580 (4%)
Budget 23,150 24,029 (4%)
% of Budget 90% 90%
*Includes only dues paying members.
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New Members*As of August 31, 2010
2010 2009
Actual 1,378 2,343
Annual Budget 3,000 3,450
% of Budget 46% 68%
*Includes only dues paying members.
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Current Reserve PositionAs of August 31, 2010
Reserve Fund Balance $6,066,084
Number of Months 3.7
YTD Investments Earnings: $ 107,245
Rate of Return 1.9%
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PERFORMANCE SHAPSHOTAs of September 30, 2010
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Member Demographics
– Median age is 51
– 83% have at least a 4-year college degree
– 18% are female
– 7% are ethnic minorities
– 60% are commercial property oriented and 40% are residential property oriented
– 44% have been members for 20+ years
– 36% make more than $100k per year9
AI Image/Reputation
– Members and nonmembers have positive image of Appraisal Institute
– Members and nonmembers agree that AI plays a leading role in charting a positive course, direction for profession
– Appraisal Institute: best known for quality education programs (especially classroom)
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New Designated Members Trend Line
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New Members Trend Line
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2010 Goals
• 25,750 total members
• 3,750 new members
• 280 new designations conferred – 140 MAI and 140 SRA
• 45,400 students enrolled
• 1,350 educational programs delivered
• 14,000 publications sold
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2010 Recruitment & Designations Results
• As of Sept. 30, 2010– 24,016 members total– 1,557 new members (52% of 2010 goal) *
– 1,208 new Associate members– 191 new Trainees– 158 new Affiliate members
– 123 new MAI and 96 new SRA designated members in 2010 (78% of the 2010 target)
* The 2010 recruitment goal is 3,750 for marketing budget purposes and 3,000 for dues revenue forecasting purposes. Proportion calculated on the revenue target.
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LEGISLATIVE & REGULATORY UPDATENovember 2010
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Government Relations
• Federal Successes– Dodd-Frank Act: biggest reform in two decades– Defeated proposed increase of SBA appraisal
threshold
• State Successes– Helped enact 20 AMC registration bills – Defeated BPO expansion bill (Miss.)– Developed “model” bill to retain licensing fees
with state appraisal boards (2011 goal)16
Government Relations
• Recent Official Letters– Federal Reserve
• Supporting recognition of VA Fee Schedule• “Customary and reasonable fees”• And appraisal independence
– Securities and Exchange Commission• Supporting “Asset Backed Securities” proposed
rule • Recognizes “MAI Certified” appraisals
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Government Relations
• Recent Congressional Testimony– Before House Financial Services subcommittee– Commercial
real estate
market
conditions– In Chicago
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• Other Items of Note– Washington Appraisal Summit– CFA Institute Global Investment
Performance Standards– FASB Fair Value and Lease Accounting
Standards
Government Relations
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• What to watch for …• Dodd-Frank implementation• IRS penalties• BPO legislation in the states • Chapters in mandatory states: must be active
and on high alert
Government Relations
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Resources
• Resources– Dodd-Frank FAQs – Official Comment letters– Webinars on Dodd-Frank and other hot
topics
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Contacts
• Contacts– Bill Garber
• 202-298-5586, [email protected]
– Scott DiBiasio• 202-298-5593, [email protected]
– Brian Rodgers• 202-298-5597, [email protected]
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MARKETING RESOURCESNovember 2010
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Online Revenue Sharing
Continued source for enhanced chapter revenue in 2011:
• $15 per student/chapter if the chapter fulfills the minimum criteria for promoting online education.
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Professional Practice Center
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2010 Publications
• Visual Valuation: Implementing Valuation Modeling and Geographic Information Solutions (Aug.)
• An Insider’s Guide to Home Buying (Sept.)
• Real Estate Valuation in Global Markets, second edition (Dec.)
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2011 Publications
• Appraising Land Conservation Easements (Jan.)
• Quality Control in Appraising (March)
• Self-Storage Economics (April)
• Cost Approach to Value (June)
• Hotels & Motels, International Edition (Aug.)
• Business Enterprise Value Anthology, second edition (Oct.)
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COMMUNICATIONS UPDATENovember 2010
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AI Communications
• Media relations– Messages, interviews, bylined articles
• Speaking opportunities– Seminars, workshops, conferences
• Publications– Valuation, ANO, Residential Update, Journal
• Member communications– Member recognition program
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AI Media Coverage
Third Quarter 2010
– Total AI stories: 382
– Total AI media outlets: 289
– Total AI publicity value:$235,797
– Total AI impressions: 401,654,937Publicity value = vendor’s proprietary formula, weighing factors such as equivalent advertising value, placement, audience size, etc.
Impressions = number of times a story may have been read, seen or heard
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National SpeakingOpportunities
• Members have represented AI so far in 2010 by speaking on key topics at:– AARO Spring Conference – Environmental Bankers Association
member meeting– National Settlement Services &
Compliance Summits– Pan Pacific Conference
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National SpeakingOpportunities
• Members will represent AI later in 2010 by speaking on key topics at:– NCRIEF Annual Conference– California Assessors Association statewide
conference– GreenBuild 2010 Residential Summit– United Nations Economic Commission for
Europe green valuation forum
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Volunteerof Distinction
• AI’s member recognition program
• 1 member per region honored each month– Service to AI, profession, community
• So far: 29 members from 9 regions cited
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RECENT BOARD ACTIONSNovember 2010
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Aug. 12-13 Meeting
• Voted to appeal Foundation’s suspension of AI (later voted to withdraw as sponsor)
• Funded Chapters for 2011
• Set 2011 AI meeting dates, sites
• Approved project team re: Candidate member program
• OK’d 45-Day Notice item re: Reg. No. 1
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Aug. 12-13 Meeting
• Elected Rick Borges as 2011 vice president
• Elected 3 members to Audit Committee
• Sent 2 items to 45-Day Notice:– Core Competency Framework– International members
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Sept. 17 Meeting
• Announced AI’s new strategic vision
• First new business model since 1991
• Goals– Higher levels of excellence, competency– Increased value of membership– Awareness of AI designations– Increased demand for AI designations
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Sept. 17 meeting
• Discontinued free USPAP on Jan. 1
• Placed Associate members on 5-year cycle
• Transition AI Forum to AI Communities of Practice
• Changed procedures at BOD meetings
• Sent to 45-Day Notice: Guide Note 10
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Nov. 3, 5 Meeting
• Passed motions:– 2011 budget: no dues increase in U.S. – Created external relations project team– Added to board/officer conflict of interest
procedure– Changed “certificate programs” to
“professional development programs”– Only Designated members’ names on
professional development program registries39
Nov. 3, 5 Meeting
• Other motions passed:– Amended Regulation regarding chapter
government relations committees, panel– Funded research, project manager related
to new business model– Accepted IRWA’s proposal enabling MAI,
SRPA members to earn IRWA certification
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Nov. 3, 5 Meeting
• Passed 45-Day Notice items:– International members– Guide Note: post-disaster valuation– Minor language revisions to mirror Illinois
legislative language– Specific changes to Regulations No. 1 and 2– Core competencies
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Core Competencies
• Core competency approach will:– Position AI Designated members as
premier source for real estate valuation– Attract individuals to Designated
membership AI otherwise unable to attract– Recognize individuals with various
advanced skill sets • Complement, broaden shared expertise of AI
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Core Competencies
• Core competencies also will:– Expand field of individuals who could work
toward Designated membership status– Enhance reputation of Designated
membership; add highly qualified members– Offer additional options to assess the
strengths of AI Associate members– Provide temporary equivalent measure for
appraisers who lack college degree43
OTHER TOPICSNovember 2010
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2011 AI Meetings
• SPC: Jan. 31-Feb. 1, Chicago• Board Meeting: Feb. 2-4, Chicago• National Nominating Committee: May 3,
San Juan, Puerto Rico• Strategic Planning Committee: May 4,
San Juan, Puerto Rico• 2nd Quarter Board Meeting: May 5-6,
San Juan, Puerto Rico 45
2011 AI Meetings
• Joint Regional Meeting: Aug. 14, Las Vegas • AI Annual Meeting: Aug 15-17, Las Vegas• 3Q Board Meeting: Aug. 18-19, Las Vegas • Committee Meetings: Sept. 25-27, Chicago • Chapter Leadership Program: Sept. 26-27,
Chicago • Strategic Planning Committee: Chicago• 4th Quarter Board Meeting: Chicago
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2011 Annual Meeting
• First time since 2005• Aug. 15-17• Cosmopolitan hotel in Las Vegas
– Networking (social receptions)– Education (AI and state credit)– Celebratory events (awards)– Exhibit hall– Off-site entertainment events
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AI’s Withdrawalfrom Foundation
• What is the financial impact on AI?
• What is the effect on USPAP courses? On other AI courses?
• Will AI members still get free USPAP?
• What about AI’s designations?
• What happens to our reputation?
• Will AI ever return to the Foundation?
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AIRF, AIET
• AI Relief Foundation– Created after Hurricane Katrina in ’05– Helps AI members, others in need– www.appraisalinstitute.org/about/AIRF/
Default.aspx
• AI Education Trust – Formed 50+ years ago– Funds Lum Library, grants, scholarships– www.aiedtrust.org/
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• Questions?
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