Budget & Finance Committee

Susan Kendall ’81, ks’99, Chair Michael Cronin '75, gb'77 Vice Chair

Marcus DeFlorimonte gb'95, pmd Chip Flowers ks ’06 Michael Gaines gb’96

Cheryl LaMonica, gb’20, gmp Debbie Millin, gb’22, amp

The Budget and Finance Committee is pleased to submit this report. After several years of pandemicrelated disruption, activities at the Harvard Club of Boston significantly expanded during fiscal 2022 resulting in an improved financial position. This year the Committee welcomed a new member, Debbie Millin, and also thanked Jack Wolfe for his commitment and dedication to the Club on the completion of multiple terms of service on the Committee. After meeting frequently during the pandemic, in the past year the Budget and Finance Committee was able to resume its typical quarterly meeting schedule to monitor financial performance The Committee recognized the many accomplishments of Michael Jenkins, who retired as Chief Financial Officer in June 2022 We welcome the Club’s new CFO Sara LaWare, who arrived in August 2022. We look forward to collaborating with Ms. LaWare and her staff for many years.

Our report includes a summary of fiscal 2022 financial performance and year-to-date fiscal 2023 financial results relative to budget.

Fiscal Year 2022 (September 1st, 2021 through August 31st, 2022)

Anticipating a prolonged period of reduced activity, and possible additional temporary Covid-related closures, the Club maintained a conservative approach to budgeting for a second year and anticipated another operating loss. However, activity ramped up ahead of projections as the Club welcomed its members and function clients back to the clubhouse. Membership levels, entrance fees and dues all showed modest improvement and we remain grateful to our members for their commitment through the pandemic. Although total revenue did not rebound to pre-pandemic levels, the Club’s operating results impressively exceeded the original budget to produce a small operating profit for the fiscal year However, after recording two one-time non-operating transactions the financial statements show a $2 million loss in net assets First, as expected, the federal government forgave the pandemic-related Paycheck Protection Program loan ($1.9 million), however this was more than offset by a significant ($4.5 million) adjustment in actuarial and financial assumptions for the Club’s pension. The Club maintains a comfortable cash position with good liquidity to support operations. The Club did not access its line of credit with Eastern Bank or take on any additional short or long-term debt.

Fiscal YTD 2023 (September 1st, 2022 through February 28th, 2023)

In April, 2022 the Committee began the budget process for fiscal 2023, with a cautious but with a more optimistic outlook than the previous year. Mr. Jenkins and Mr. Cummings worked with the Committee to incorporate continuing improvement in Club activity while still maintaining a conservative approach to revenue and expense projections. Budget assumptions were adjusted to reflect a moderate increase in member dues and modest growth in membership levels. The budget was revised several times and on June 15, 2022 the Committee approved the Fiscal 2023 budget, which projected break-even operating results. The Committee unanimously recommended the budget to the Board of Governors, who approved it at their meeting on June 21, 2022. Financial results through February 28, 2023 (6 months) indicate strong performance of revenues, exceeding those from the same date last year, continuing the Club’s growth trends in both member and function activity. Membership levels are projected to continue improvement as we all benefit from the tireless work of the Club’s Membership Experience Team to enhance the value proposition for current and prospective members. Budget and Finance Committee initiatives for the upcoming year include enhanced reporting on key performance indicators (KPIs) and long-range planning. The Committee expresses its appreciation to Mr. Cummings, Ms. LaWare and the entire staff for their careful management of the Club’s finances.

In addition to lingering financial stress related to the Covid-19 crisis, the Club faces two major strategic challenges which will impact the Club’s financial health: 1. Membership growth and 2. Improvements and redevelopment of our property at 415 Newbury Street. The Budget and Finance Committee is grateful for the spirit of cooperation and open communication among the Board, Management and committee leaders and members.

We invite our fellow club members to provide input and feedback at any time during the year. Many thanks to all Budget & Finance committee members for contributing their considerable expertise and strategic thinking as we strive to deliver the highest possible value to our members while maintaining robust long-term financial health for the Club.

Respectfully submitted,

Susan L. Kendall, ’81, ks ‘99 Chair