Presidential Message - Financial Challenges & Budget Cuts

We have all experienced so much in the first part of 2020.  It has been such a short time but seems like a lifetime.  And now, we are on the cusp of moving toward getting back to normal.  A new normal.

One great thing we have learned from this experience is how powerful coming together can be.  The Joint Leadership Council was formed last year to bring together many of us in the horse industry to work toward a common goal.  This effort has grown and allowed us to move in a positive direction covering issues we never imagined.

It is now more important than ever to continue in this direction and work together to bring our industry back to a place that is stronger than ever.

As we embrace the new normal, it is vital that we all follow the guidelines set forth by our state, local and equine organizations.  You can learn more at www.jlccares.com and www.usef.org/media/coronavirus-resources.

The future of our industry is dependent on how well we follow the rules and get our community back to a new normal.  The last thing we need is to face another shut down especially if it is due to the careless actions of any of us.

As with most of us, this world crisis has put an enormous strain on our daily lives both mentally and financially.  We have all been forced to make tough decisions for the security of our future.

Have you ever thought about where AMHA gets its resources to preserve, promote and perpetuate the Morgan breed?  Let me share with you a few facts.

The Morgan Horse magazine generated more than $725,000 of revenue in 2019.  This was an increase of more than $100,000 from the previous year.  The vast majority of this increase came from horse show advertising and the amazing work of our publications team.

This added revenue could have been used for many things in our breed.  However, with more than $85,000 and mounting in legal fees so far from the Bennett lawsuit, this added revenue has quickly disappeared. It is anticipated that the Rainy-Day Fund which peaked at $170,000 on January 1, 2020 will be completely depleted due solely to these legal expenses before the year ends.  It is very unfortunate these funds are not available to assist with the COVID-19 crisis. (For more information, go to:  www.morganhorse.com/about/litigation-updates/)

Advertising income from our shows helps to fund many of our programs and services throughout the year.  Many members of our community including trainers, breeders, officials, and commercial exhibitors also depend on the show industry for their livelihood.  Therefore, it is vital that we all get back to our way of life quickly and safely.

In the meantime, the AMHA Board of Directors has made many difficult decisions regarding the remainder of 2020—decisions necessitated by declining revenue due to the COVID 19 crisis and increasing expenses related to lawsuit defense. These steps are vital at this time as we plan for the future and the long-term viability of AMHA.

These actions cut expenses from the 2020 budget by approximately $120,000:

• Every budget line item has been reviewed and reduced to the fullest extent possible.
• All Board Meetings will be held virtually in 2020.
• All staff travel has been eliminated unless absolutely necessary.
• All open staff positions within AMHA will remain open.
• The Network will be printed and mailed only once in 2020.
• The following programs will be put on hiatus effective immediately: Open Competition, Star Awards, USDF All-Breed Awards, All High-Point Morgan Awards, and Distance Championship offerings.

Even with these drastic cuts, AMHA faces a much bigger loss in income-producing activities and is expected to still incur a loss of more than $100,000.  Due to the Rainy-Day Fund depletion by the Bennett lawsuit, AMHA has no means to cover this anticipated loss.  The next alternatives for consideration would be cuts to services and staffing that would change AMHA permanently.

On the bright side, two areas of our world are safe for the short term.  Thanks to the very astute actions of our great leaders in the past, both the AMHA Registry and the Grand National & World Championship Morgan Horse Show® are covered for now thanks to reserve funds.  The AMHA Registry Trust Fund is currently at approximately $225,000.  Although we do not expect the need to use the Registry Trust Fund, it is available for the protection and preservation of the Registry. 

The Grand National & World Championship Morgan Horse Show® Reserve Fund is currently at around $500,000. With an annual budget of almost $2,000,000, the show committee has added to this fund annually to protect the show from catastrophic situations like we are facing today. This money has always been accounted for and kept in reserve for a “rainy day.”

So, with the Registry and the Show safe for the near term and the safety net for the general operation of AMHA quickly being depleted, we are working hard to come up with ways to keep our Morgan world sound.

In the coming days, we will be announcing some exciting and creative ways for you to help.  Plans are in the works for several campaigns to both raise funds and to inform the public specific to the health of AMHA.  It is our goal to weather the storm together. 

Our number one priority continues to be the safety, well-being and health of our family, friends, and animals.  So, let’s all work to stay strong, stay safe, and stay together.

And as always, please remember we all share this passion for the Morgan breed. While we don’t all share the same activities or personal preferences, I hope we all can focus on the unifying fact that we all share a love for the Morgan breed.

C. A. Lee, III, AMHA President, #MorganStrong