*Introduction and Background* Whereas the current ARRL financial management and reporting has certainly been successful in both monitoring the League's overall financial position (whether the League, as a whole, makes or loses money) and satisfying legal reporting requirements, I've never found the reports able to provide insight into understanding the League distribution of its income into the various League activities. It is my belief that presentation of the League's financial results in the following per-member cost format will permit both League management and the board to possibly better understand what we are doing with our resources, and more effectively manage them for our membership. *Methodology* Data from 1) the 2012 ARRL Detailed Income Statement, that was contained in the January 2013 CFO Report to the Board, was combined with 2) the results of a salary cost-allocation survey presented to the board in July 2012, to produce the following per-member income and expense estimates. This was refined using 3) CFO-Shelley-provided breakdowns of several line items in the Detailed Income Statement that permitted better allocation of some costs such as postage and stationery. This is then an estimate. The largest cost component is employee salaries. ARRL employee's time is not tracked to project activity with time cards. In 2012, management conducted a survey of employees, estimating the percentage of their hours spent on their various activities. The percentage numbers were given to the board in July 2012. These percentages were applied to the actual year-end salary and benefit numbers in the 2012 ARRL Detailed Income Statement. It is believed that the results are reasonably representative of actual results. The number of members used for the calculations was 160,278, the number at year end. It may have been appropriate to use the average over the year, but differences are insignificant. This memo presents data and discussion about its format. Comments and conclusions about appropriateness of any of the costs are not included. *2012 Income Per-Member* A member may ask, "What is done with my $39 per-year dues?" The first part of the answer is to point out that his $39 is part of the total of $96 per-member income received by the League. The per-member income breakdown is as follows: Dues & Subscriptions 35.73 Publications 22.06 Advertising 15.99 Investment Income 7.69 Contributions 6.04 Programs & Service Fees 3.82 VEC 2.62 QEX 1.14 Other 0.66 NCJ 0.34 Total Income 96.09 *2012 Expenditures Per-Member* The $96 per-member income is spent as follows: QST 24.66 Publications 21.45 Programs & Services 9.04 Membership Acquisition 7.19 International 4.81 Fundraising 4.46 Board Activity 3.11 Field Organization 2.74 VEC 2.73 Web-site & ARRL.net 2.62 Laboratory 2.50 Regulatory 1.70 Education 1.47 QEX 1.34 Staff Member Contact 1.04 Emergency Communications 0.87 NCJ 0.61 Public Relations 0.55 Total Costs 92.90 Therefore, in 2012, income exceeded expenses by approximately $3.19 per-member. *Cost Description* The per-member costs shown above have indirect costs included. The costs presented are what would be billed to an external customer for a no-profit contract to perform the work. For example, the Lab uses a heated building,office space, furniture, computer networks, payroll service, and guidance of upper management. As is done on government contracts, the indirect charges are apportioned proportional to the direct expenses, including both labor and other direct costs. The indirect, or overhead, burden accounts for $17.67 per member, and that amount has then been distributed to the cost centers listed above. This amounts to a 23% cost burden for each component. The particular cost centers listed essentially follow the categories given by staff in the Time Allocation Estimates that are the basis for this memo. It may have been more desirable to utilize other cost centers, such as DXCC, W1AW, etc. This uses the labor estimates provided by ARRL management in July 2012. *G&A and Overhead* For the analysis presented here, all indirect costs are lumped. Conventionally, indirect costs that an entire organization, such as a corporation, incurs, such as filing federal income tax returns, are considered to be "General and Administrative." Indirect costs that a particular facility or department incurs are usually called "Overhead." It is possible to track costs in a way where some overhead costs only impact some cost centers. For example, the Washington DC office expenses might be more appropriately used to only burden certain cost centers and not others, but the input data doesn't easily permit this, and it was not done here. *Comments on Some Costs* The Membership Acquisition Costs are likely higher than the $7.19 shown. 1) When directors or section managers travel to conventions and sit at a booth primarily selling and renewing memberships, this is billed to Board Activity or Field Organization. 2) When a staff person travels to a convention, and sits at a booth primarily selling and renewing memberships, this is billed to Member Contact. 3) Each issue of QST contains ads for League membership which are not cost-accounted to Membership Acquisition. 4) Although a very significant percentage of books is used for membership premiums, only the printing cost of the books is directly book-kept to Membership Acquisition. The costs of generating the books, and the labor used to mail membership premiums is not directly included. Fundraising Costs are likely higher than the $4.46 shown. 1) Development department travel costs related to board interface are billed to Board Activities. 2) Related QST ads and ad preparation costs are billed to QST. Some of the overhead costs may be directly attributable to cost centers. No report on the level of attention-to-detail was provided with the labor breakdown estimates. The International costs include IARU, ITU, and some overseas convention costs. League operating costs might be better understood.if these were separated. League operation might be better understood if Programs and Services costs such as DXCC, contests, and W1AW, were separated. Governmental relations, such as lobbying, might be broken out. *This is a First Cut* Most direct costs appear to be currently collected and book-kept in a way that allows them to be easily sorted into project cost centers. Labor costs do not follow this as no project-related time charge system is in place. A spreadsheet is now in place that allows the per-member numbers to be computed by entering data from the Detailed Income Summary. Refinement of this and any continued use is dependent on board support for the idea. *Example Use* I use this data in talks to convention forums and clubs. The first thing I point out is that League membership is not simply a QST subscription. If you observe the per-member dues plus advertising income is $50 a year, and that QST costs slightly less than half of that, being a League member is much more. A two-way interchange of ideas with the audience often proceeds from there. *Any Board Support?* Comments are welcome. 73, Dick Norton, N6AA