Corporate Poverty

Corporate Poverty

This article is adapted from a presentation given by Gary A. Glynn, Class A (nonalcoholic) trustee at a general sharing session of the General Service Board, October 1994.

The subtitle for this sharing session on corporate poverty is: “spiritual and practical principles that assure AA’s future.” That got me thinking. I think in AA, spiritual and practical are the same thing. Imagine someone coming into service who wanted to have some influence in AA and promoted some practical-sounding idea that had no spiritual merit. The Fellowship would quickly put a stop to that. Such a person would have to find some idea with a spiritual basis – even if he didn’t believe it. So anything that is going to be of any practical use to us has to be spiritual as well.

At the same time, it looks to me as if AA, beginning with Bill W., has quickly dropped any spiritual-sounding ideas that don’t pass the practical tests of keeping alcoholics sober or keeping AA together.

So, is corporate poverty a spiritual and practical principle that will assure AA’s future? Of course, it is.

In the Seventh Tradition, when talking about how AA acted when it found out about the bequests that were coming its way, Bill wrote, “The pressure of that fat treasury would surely tempt the board to invent all kinds of schemes to do good with such funds, and so divert AA from its primary purpose. The moment that happened, our Fellowship’s confidence would be shaken. The board would be isolated and would fall under heavy attack of criticism from both AA and the public. Then our trustees wrote a bright page in AA history. They declared for the principle that AA must always stay poor. Bare running expenses plus a prudent reserve would henceforth be the Foundation’s financial policy.” He went on to say, “At that moment, we believe, the principle of corporate poverty was firmly and finally embedded in AA tradition.”

That sounds pretty simple: avoid schemes that divert us from our primary purpose and only have enough money around to meet bare running expenses and maintain a prudent reserve. I don’t think anyone in this room would object to those statements, so why are we sharing about them? The reason is that they mean different things to different people.

The Concepts try to help us a little more in making these principles concrete, but the Concepts can be confusing, especially about the power of the purse and our prudent reserve, which usually are at the center of debates about corporate poverty. In the first warranty, Bill tells us why a dictator wouldn’t last a year: “And in the brief time he did last, what would he use for money? Our Delegates, directly representing the groups, control the ultimate supply of our service funds.” Sounds here like the power of the purse is supposed to be immediate, doesn’t it? That’s on page 63 [of Twelve Concepts for World Service]. On page 65, in the second warranty, writing about what hard times might do to AA, Bill says, “Our present reserve and its book income could see us through several years of hard times without the slightest diminution in the strength and quality of our world effort.” Sounds here as if immediate wasn’t what he had in mind after all.

Throughout Bill’s writings, there’s the sense of his recognizing the balancing act he was asking us to take on. Too much, and we argue over perilous wealth and power and lose sight of our primary purpose of carrying the message. Too little, and we risk losing the ability to carry the message at all. So he spoke for both sides in different places.

What are the issues here? AA groups are formed and dissolved all the time, and a reserve of one or two months for a group seems adequate to a lot of people. I’ve been asked, “If one or two month’s reserve is okay for a group, why do we need ten or twelve at GSO?” For one thing, it is probably easier to form a new group than it is to form a new GSO. There is no alternative GSO to turn to if ours goes under. The services we provide have been built up out of many years’ collective experience and would be hard to recreate. Also, despite the eagerness of others to publish some of our literature, GSO needs to continue to publish regularly without the threat of interruption so the message of sobriety will continuously be available, both through the written message itself and the services supported in part by literature profits. Many of our projects extend over a considerable period of time, like financing new translations or planning a convention. I think the Fellowship takes the financial stability of GSO for granted and assumes it will always stay that way.

Bill wrote about how Alcoholics Anonymous got the outside world’s attention when the world realized AA was going to be self-supporting. He pointed out that most people viewed alcoholics as financially irresponsible. When I tell people who don’t know much about AA that we accept no outside contributions, and are self-supporting and solvent, the reaction is amazement and admiration. AA has such a solid reputation with the public. When we discuss the idea that it might be sound to lower our Reserve Fund to come closer to some supposedly more spiritual level of corporate poverty, we should recognize that we would also be coming closer to the point of running out of money if we run into hard times or if some of those “possible demands on the Reserve Fund” occur at inconvenient intervals. The lower our Reserve Fund, the higher the risk of some financial accident where we run out of money. What would we do if we ran out of money? A financial failure of AA would do incalculable harm to our reputation with the public, the Fellowship, and with some poor drunk who’s looking for a reason to believe AA doesn’t work.

If we ran out of money, we might have to borrow from a bank temporarily to keep the doors open. If we did that, we would lose some measure of financial independence. A strong Reserve Fund is one of the prices we have to pay to assure that no one but the Fellowship sets our financial policies. And continually debating whether the Reserve Fund is perilously large is part of the price.

One counter to that argument is that if there ever was a real emergency, AA groups would increase their contributions and rescue GSO. This argument says, in effect, that we should rely on our Higher Power operating through the groups to save us from our own imprudence. Maybe that would work. If we rely on that, we wouldn’t have to worry about the accuracy of our budgets, our accounting, or much of anything really. This may be the place to invoke Bill’s comment in the Ninth Concept about casting the whole idea of planning for tomorrow onto a fatuous idea of Providence. I don’t believe that because God looks after AA, it doesn’t matter what we do in the practical realm. It’s risky to ask our Higher Power to bail us out of trouble when we can avoid it ourselves by budgeting solidly, running GSO and the Grapevine in a businesslike manner, and keeping at least ten months’ expenses in our Reserve Fund. I know that some responsible people in service think nine or even eight months might be okay. The treasurer probably should be a bit more conservative than most of you.

I also think that if we ever had to go to the groups and say, for example, “If you don’t send us $500,000 of contributions within the next three months we’ll have to lay off half of our staff and cancel the Conference,” the reaction probably wouldn’t be, “Oh, aren’t they spiritual at GSO, practicing corporate poverty. Well, anyone can make a mistake. Let’s send them more money.” I think the actual and proper response from the groups would be that GSO didn’t know what it was doing and shouldn’t be trusted with any money at all.

But it is true that some groups are reluctant to contribute to GSO when they see a $9 million Reserve Fund. The problem with focusing on this amount is that the dollar amount low enough to counter that reluctance is so low that we would be running severe risks if we got to that level. That’s the main reason we’ve been displaying our financial numbers on a per-group basis as well as in total, like $156 per group for the amount in the Reserve Fund. This is not a trick; it’s a way to point out to the Fellowship how large we are. A large Fellowship will show large absolute dollar numbers.

Bill W. solved the question of whether a prudent reserve inhibited contributions. He wrote, “It is said that the impression is created that AA Headquarters is already well off and that hence there is no need for more money. This is not at all the general attitude, however, and its effect on contributions is probably small.” I wish I could get away with simply asserting that conclusion the way Bill did, but I don’t think I can.

I think the keys here are, first, we must be true stewards with AA’s money, acting as if we were poor even if we have a prudent Reserve Fund. No one is going to send us contributions if we are perceived as wasting money or spending it in marginally effective ways. I have said elsewhere that there were two ways to avoid going over the twelve-month limit on the Reserve Fund: spend more money or reduce literature income. I said, “We will not increase spending above ordinary amounts unless the Fellowship clearly indicates a desire for new services. We must control spending, despite the presence of a large Reserve Fund, with the same sense of stewardship that we would exercise if the Reserve Fund were small.” I believe that truly and think it’s a reasonable description of corporate poverty in practice. And in fact that’s what we did, reducing pamphlets and other literature prices in a way that makes it easier to carry the message and helps groups’ finances.

The other two keys to more contributions, and what I think is much more important – the number of groups contributing – are, first, explaining what the money is spent on, which we are now able to do with our new reports, and second, emphasizing the spiritual benefits of making contributions. Contributions are as important to the contributor as they are to the recipient. Contributions are very important for AA unity because making contributions gives the groups an opportunity to know that they are part of carrying the message of AA around the world.

Group contributions are important to us and they must always be at a high enough level so we hear the Fellowship directly, but I’ve never understood the equation that group contributions equal self-support but literature sales do not. I agree completely with Bill W. that book profits are “actually the sum of a great many contributions which book buyers make to the general welfare of Alcoholics Anonymous. The certain and continuous solvency of our world service rests squarely upon these contributions. Looked at in this way, our Reserve Fund is actually the aggregate of many small sacrifices made by the book buyers.”

What I’m trying to say is that corporate poverty is more a state of mind than the size of our bank account. We all know people and organizations that extravagantly spend money they don’t have, living beyond their means either by ignoring the facts of their finances or by assuming a rosy tomorrow. So you can in fact be poor and not practice corporate poverty. It happens to museums and opera companies all the time. The opposite is also possible, that we can maintain a prudent reserve without falling into the temptation of spending it just because it’s there. One fear I hear expressed is that GSO might ignore the will of the Fellowship because we have a prudent reserve. My experience at board weekends, the Conference, and AAWS and Grapevine corporate board meetings is that there is no danger of that. First of all, group contributions pay for three-quarters of services spending. But even more important, we listen because we know we should and must.

One advantage of having a sound prudent reserve is that it makes it easier for us to sign a lease for office space on good terms. A reserve fund is one of the few ways a nonprofit has to show a landlord that it is creditworthy. Another big advantage is that it lets us plan with better budgets. The year 1994 is a good example. We used best estimates throughout the budget. If we had had only five or six months’ expenses in reserve, we would have had to use more conservative budget estimates, which would have meant either cutting expenses or raising literature prices to balance our budget, which we never had to contemplate. I wouldn’t have been able to support reducing literature prices at mid-year, even though it was the right thing to do from a service point of view, if we had only had a six months’ Reserve Fund.

I started out by saying that if it wasn’t spiritual it wouldn’t work in AA and if it wasn’t practical, it wasn’t spiritual. A solid, prudent Reserve Fund and good business management skills are both spiritual and practical. It is neither practical nor spiritual to accumulate more or spend more than we need to. It is also neither practical nor spiritual to run out of money. As usual Bill has a good phrase for what we need. He called it fiscal common sense.

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