On September 14, the United States Hispanic Chamber of Commerce (USHCC) board will convene in Los Angeles to elect a new chairman. Whoever prevails among the three candidates – Ray Arvizu of Arizona, J.R. Gonzales of Texas, or David Lizarraga of California – the new leader will face daunting financial and organizational challenges upon taking office.
According to documents obtained by Hispanic Business, the USHCC has amassed consolidated debts of more than $1.3 million. Since 1998, it has posted yearly deficits summing to $1.5 million, including a $700,000+ loss for the 2001–2002 fiscal year. Even though income in the 1997–2000 period grew 86 percent, the USHCC’s operating expenses ballooned 103 percent. Requests by Hispanic Business to check these figures against the chamber’s official audit statements were denied or yielded no response from the USHCC and its auditor, Virginia-based Soza & Co. However, USHCC attorney Tom Stahl indicated that the chamber will reveal its finances to the membership at the upcoming USHCC National Convention in Los Angeles on October 16–19 (see accompanying story, “Accessing the Audit”).
Meanwhile, the chamber’s business ventures also have their troubles. The USHCC-sponsored television show Hispanics Today has racked up significant debts with its producer-distributor Trans World International, according to a source who requested anonymity. Its joint-venture magazine Hispanic Trends, announced at last year’s convention, has yet to appear (see “Advocate and Competitor?” January/February issue). After nearly two years of fund-raising, the USHCC’s equity investment fund is moving toward realization, but the chamber has no financial participation in the venture (see accompanying story, “Closing the Investment Cycle”).
On the membership side, the documents indicate that only 138 Hispanic chambers are paid members of the USHCC. That figure represents a little more than half the paid membership in the mid-1990s, when the total reached the 250–260 range.
Under the USHCC bylaws, a chairman is selected by the 24 board members, who in turn are selected by member Hispanic chambers in each of six regions. The bylaws also instruct the board to “make good faith efforts to have gender and ethnic origin diversity.” By way of rotation, this year’s election demonstrates that commitment: After the two-year tenure of outgoing chairwoman Elizabeth Lisboa-Farrow, from Washington, D.C., the new chairman will be one of three candidates, all of whom are Mexican-American men from western states.
J.R. Gonzales, the candidate from Texas, currently serves as vice-chairman of the USHCC, a position he assumed last year after Hector Barreto left to head up the Small Business Administration. Mr. Gonzales is president of JRG Communications, a public relations and marketing firm in Austin.
Besides events and political work, JRG Communications has expanded into organizational development and training. “We work with chambers and nonprofits on leadership and board development,” Mr. Gonzales says. Before his election as a USHCC board member, Mr. Gonzales was chairman of TAMACC (Texas Association of Mexican American Chambers of Commerce) for two years.
Ray Arvizu enters the race with the longest track record at the USHCC. He served as chairman in 1999–2000. His company, Arvizu Advertising & Promotions, handles accounts such as McDonald’s, MasterCard, Wells Fargo, the Arizona Diamondbacks, and Radio Unica. Besides his involvement with the USHCC, Mr. Arvizu is also a founder of the Association of Hispanic Advertising Agencies.
During his first term as chairman, Mr. Arvizu emphasized the chamber’s role in political advocacy. He worked to raise the Hispanic profile in government procurement and Corporate America, and much of the groundwork for the USHCC Private Equity Fund was laid on his watch.
David Lizarraga, the third candidate for the board chair, boasts a lifetime of nonprofit management experience. The founder of The East Los Angeles Community Union (now TELACU), he also serves as president of Millennium/LINC, an economic development project. Under Mr. Lizarraga’s leadership, TELACU has developed into a $100 million economic development engine, with its profit-making subsidiary ranking 47 on the Hispanic Business 500®.
At TELACU, Mr. Lizarraga worked hard to move the organization from government grants to fiscal self-sufficiency through savvy real estate development. Millennium/LINC duplicates that strategy, working to revitalize inner-city neighborhoods by bringing in franchise businesses such as 7-11 stores and Ford dealerships. Presumably, Mr. Lizarraga would bring his bottom-line approach to the USHCC.
Out of necessity, the chamber’s new leader will take a new direction that differs from those of his predecessors. Financial constraints alone call for organizational change. In 2003, the need for transparency looks certain to move from Wall Street into the boardroom at nonprofits such as the USHCC.
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