Circuits Assembly - March 2008 - (Page 51)

Trade Groups Table 5. Tax-Exempt Organization Wages, 2006 Org. AEA ACI ECA EIA iNEMI IPC IMAPS Jedec SEMI SIA SMTA Employee Costs as % of Revenue 45 37 31 571 42 34 28 29 401 34 30 Includes wages and benefits (but not taxes). 1. 2005 figures. of $14.8 million in 2005. ECA and AeA both spent more than $400,000; Jedec laid out nearly $300,000, and IPC wrote checks for some $618,000. Only SMTA declared no professional fees in 2006. Just what those professional fees went to ranged from software to outside staffing and everything in between. Many of the smaller firms outsource IT support, legal and accounting services, and even some marketing. Among the bigger entities, IPC, for instance, licensed and implemented an enterprise-level management information system, with other sums going toward its 50th anniversary festivities and its European representative, according to Kim Sterling, vice president of marketing and communications. SEMI’s expenses ranged from program-related line items such as magazine publishing and exhibitions to more mundane services such as accounting, human resources, management consulting and IT. When it comes to lobbying, electronics trade groups fall into two categories: those that do, and those that do not. More than half of those firms we looked at declared no lobbying expenses in 2006. The most active, AeA, spent $2.2 million, much of it on nine contract lobbyists around the country. Next was the SIA, at slightly less than $1 million, followed by SEMI at $402,000 and IPC at $316,000. (The $40,000 EIA declared in 2005 is somewhat misleading, as its head at the time was Dave McCurdy, a former U.S. Congressman.) Under certain circumstances, not-forprofit organizations can lose their tax-exempt status if the IRS determines they are engaged in “excessive” attempts to influence legislation or promote an individual’s candidacy for public office. Every firm that responded to CIRCUITS ASSEMBLY’s inquiries indicated they did not engage in activities designed to elect individuals to office. For example, AeA’s contributions were “all for influencing legislation,” said AeA’s Palafoutas. “We’re not allowed to give a dime to candidates. It’s illegal. It’s called jail.” Or as SIA director of communications John Greenagel succinctly put it, “SIA does not endorse candidates or contribute to political campaigns.” Likewise, Kim Sterling says IPC’s lobbying expenditures are “used to monitor and influence legislation and regulations and communicate to the industry. We do not support specific candidates.” SEMI’s Drumm says, “Our office works on advocacy issues important to our members, which include export controls legislation, H-1B visa quotes, R&D investment tax credit extensions, funding of science and technology programs, R&D, environmental/ health/safety legislation, IP protection and stock option provisions. These lobbying expenses are not involved with electing any candidate for public office.” Given the cyclical nature of the electronics industry, it behooves companies of all shapes and sizes to maintain ample reserves, either for unanticipated expenses or – in extreme cases – closing up shop (the “wrapping up account”). As SMTA president David Raby explains, “The general rule of thumb for a small, non-profit association such as ours is to maintain reserves to cover six months of operating expenses after considering significant seasonal revenues and costs such as SMTAI Orlando.” Although appreciably larger, AEA’s board has set the same target: six months. iNEMI president Jim McElroy was less candid, but noted the contingency fund built over the years from small annual surpluses is believed “sufficient to meet our needs.” Without a trade show or real estate mortgages, of course, iNEMI has less forward risk than some other tax-exempt firms. The picture of the industry’s tax-exempt organizations is one of health. While the largest of the firms are generally growing the fastest, even the smaller ones are showing plenty of life. Strides could still be made, however, in raising their operational transparency to the levels of their financial performance. ■ Mike Buetow is editor-in-chief of CIRCUITS ASSEMBLY; mbuetow@upmediagroup.com. circuitsassembly.com Circuits Assembly MARCH 2008 51 http://www.seho.de http://circuitsassembly.com http://www.seho.de

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Circuits Assembly - March 2008 Caveat Lector Letters Industry News Market Watch Talking Heads Focus on Business On the Forefront Screen Printing What Drives the Crowd? Mastering ESD Control in Automated Handling Systems Beating the RoHS Heat Trade Secrets True to Its Roots The Road Abroad - Strategic Alliance or Greenfield Facility? Tech Tips Wave Soldering Test and Inspection Process Doctor Pb-Free Lessons Learned Getting Lean Materials World Equipment Advances Apex Product Preview Ad Index Assembly Insider Technical Abstracts

Circuits Assembly - March 2008

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