A crucial goal of APA’s recent reorganization and restructuring is to strengthen its partnership with its district branches and state societies through sharing revenue with them. As the process gets under way, members of the Board of Trustees accepted at their meeting last month a series of recommendations on what procedures should guide the revenue-sharing initiative.

The effort took shape in October 1999, when the Trustees voted to reallocate $2.4 million of APA’s nondues revenue to district branches and state societies. At that time the Board appointed the Task Force to Develop Procedures for Revenue Sharing.

At last month’s meeting, which was held in Philadelphia just prior to the start of APA’s Institute on Psychiatric Services, task force chair and APA Vice President Paul Appelbaum, M.D., presented the task force’s recommendations on such issues as allocating the money, if or how the money’s use should be restricted, how APA will monitor the way in which district branches spend the allocated funds, and what obligations recipient district branches should have in the revenue-sharing partnership with APA.

The task force, which consists of members and district branch executives, was not charged with determining the specific amount of funds that will be dispersed; that is the purview of the APA Finance and Budget Committee as it establishes the Association’s annual operating budget.

Appelbaum presented five recommendations from the task force, all of which were adopted by the Board, some only after considerable debate.

The first of these was to set a guiding principle for the revenue-sharing process, which the task force urged "should be a partnership based on achieving mutually congruent goals." Thus the reallocated funds should be used by district branches and state societies for the following purposes:

• to build legislative and advocacy initiatives,

• to build or support their infrastructure,

• to foster membership growth or to retain current members,

• to conduct education programs aimed at either members or the general public, or

• to jointly seek additional funds from other sources.

Appelbaum noted that while many district branches told the task force that they preferred to have no restrictions on how they spend the monies, APA’s tax status imposes some limitations on how the funds can be spent, and thus some guidelines are necessary.

A contentious issue at the Board meeting was the task force’s recommendation for an allocation formula. The proposal it offered, and which the Trustees eventually adopted, calls for giving every state (as well as the District of Columbia and the Uniformed Services district branch) a minimum of $5,000. On top of that, remaining funds would be allocated based on a per-member basis. That scenario covers the district branches in all but three states, California, New York, and Missouri. Those states are the only ones with multiple district branches.

In Missouri, which does not have a statewide psychiatric association, the shared revenue would be divided equally among the three district branches.

In California, which has five district branches, and New York, which has 13 (and they vary tremendously in size and resources), a different formula was necessary. The task force recommended that the Area Councils in those two states be responsible for devising the allocation formula. Each would receive the state flat-rate amount and the per capita addition and would decide how much the state association would keep and how much of the remainder would be passed on to each district branch in the state.

This proposal elicited considerable criticism from the Area 2 (New York) and Area 6 (California) Trustees. Area 2 Trustee Herbert Peyser, M.D., insisted that the proposed formula "is not fair to us." He proposed an alternative formula in which the allocation would begin with a per capita distribution based on the number of APA members in each state. Then, for any state in which the per capita formula failed to provide at least $6,000, those states’ totals would be raised to the $6,000 minimum, which would be their allocation for that year.

Area 6 Trustee Maurice Rappaport, M.D., also protested the task force’s proposal. He stressed that California is facing "very serious problems, and we need all the help we can get." He noted that many trends begin in his state and then take hold in the rest of the country, so providing California with more of the revenue-sharing dollars "benefits all members" in the long run. He cited the annual legislative battle over prescribing privileges for psychologists as a prime example.

Trustee Al Vogel, M.D., whose Area 7 region contains some of the smallest district branches, pointed out that Peyser’s proposal would end up penalizing small district branches, "many of which are desperate for money" and have no staff to see to even routine business.

Appelbaum noted that under Peyser’s plan, 38 states would get less money than under the task force’s recommended formula, while 17 would receive more, with New York and California the biggest gainers. He stated that neither distribution formula is "right or wrong; they’re just two different ways of structuring the allocation," and each comes with advantages and disadvantages.

The Board elected to go with the proposal from the task force.

The third recommendation was that district branches and state societies must act in compliance with APA’s bylaws and must sign an agreement stating that they "understand and will abide by" legal constraints on how they can spend the funds.

In addition, they will be required to submit an annual report to APA explaining how they used the allocated money.

Finally, the task force proposed that it or another task force exist as a standing committee that will "monitor and evaluate the revenue-sharing program" and develop procedures for evaluating it after three years.

The Board voted to adopt all five recommendations.