News Column

A Year of Change at the USHCC

Page 2 of 1

At last year's United States Hispanic Chamber Of Commerce (USHCC) convention in Los Angeles, after a boisterous open-microphone session in which the chamber was assailed and defended by its members, chairman-elect J.R. Gonzales stood up and proclaimed, "We hear you, and we have to fix the system."

Since declaring those words last October, Mr. Gonzales has made some progress on his promise. He has appointed a task force to examine electoral problems – a point of contention in Los Angeles – and implemented some of its recommendations. He has hired a chief financial officer for the organization. And he has maintained communication with the state chambers that form the backbone of the National Coalition of Hispanic Chambers of Commerce, a group of reform-minded chambers that banded together after the Los Angeles event.

The reshaping of the USHCC will get a real-world test on October 1–4, when the organization holds its annual convention in Phoenix. New rules for board elections include standardized deadlines for deter-mining if chambers are members in good standing, definition of which local chamber staff members can serve as delegates, clarifi-cation of "Hispanic trade organizations" qualified to participate, and adoption of a neutrality code for USHCC staff.

The changes reflect the work of a task force Mr. Gonzales commissioned last year. Headed by USHCC vice-chair Scott Flores and consisting of at least two people from each of the USHCC's six regions, the task force geared up quickly after the fireworks in Los Angeles.

It presented recommendations to the USHCC board in March.

"We took a very hard look at the credentialing process. We opened it up to members from all the different regions, and had a long discussion and debate," says Mr. Gonzales. "The end product is a more user-friendly credentialing process. It's probably longer than before, but it spells things out more clearly."

Several of the changes deal directly with the state chambers that organized the reform coalition. For example, at last year's convention, Chairman Ricardo Calderon of the Texas Association of Mexican American Chambers of Commerce (TAMACC) was disqualified as a board candidate because of ambiguities in the rules over whether his membership in a local versus a state chamber made him eligible. The new rules clearly state that a candidate must belong to a local chamber holding membership in the USHCC. Also, according to a draft of bylaw changes obtained by Hispanic Business, the rules contain a caveat that a member chamber can be terminated from the USHCC by a board vote if the member does not enhance the mission of, or have a good-faith interest in, the USHCC's goals.

For its part, the coalition has maintained communication with the USHCC, quietly working to further its agenda. A spokesperson for the group agrees that progress has been made during the past year, and now the organization is in a wait-and-see posture. That is consistent with statements by coalition chairman David Lizárraga that "we're here to help [the USHCC], to support it, join it, and fix it from within, but first to understand that this organization does need fixing" (see "Gonzales and Lizárraga Speak Out," January/February 2003 issue).

"I would have to say the USHCC board and credentialing [task force] took a lot of time to debate the issues," says Loretta Armenta, president of the Albuquerque Hispano Chamber of Commerce in New Mexico. "There has been progress in that, especially in the clarification of what is a Hispanic trade organization. Progress has also been made on the issue of who constitutes a voting delegate."

To deal with questions of financial control raised at last year's convention, the USHCC board has hired George R. Lasnier as the chamber's first CFO.

"The CFO was in our organizational chart for a number of years, but we just recently implemented it," says Mr. Gonzales. "The CFO was hired by the board and is responsible to the board," although he works with staff at the USHCC headquarters in Washington, D.C.

The latest financial information made available by the USHCC shows continued decline of its finances (see accompanying story, "Imbalance in the Books"). However, says Mr. Gonzales, "the progress we have made [in 2002] has been significant; I am anticipating that by this time next year, the organization will be in the black."

Mr. Gonzales, who is CEO of Texas-based public relations firm JRG Communications, has brought more transparency to the organization's workings. For example, members can access the election rules on the Internet at www.ushcc.com/03_criteria.html. "It was one of the recommendations of the task force," Mr. Gonzales acknowledges. "In this administration's overall effort to communicate better with members, we placed it on the Web site, along with certified mail, regular mail, e-mail, and fax blasts."


IMBALANCE IN THE BOOKS

Deficits sum to $1.71 million during the last four years.

The latest publicly available financial information from the United States Hispanic Chamber of Commerce (USHCC) reveals that the organization had a deficit of more than half a million dollars in 2001. That follows three previous years of deficits, making a $1.71 million cumulative shortfall since George Herrera took over as CEO in 1997 (see table, "USHCC Finances"). As of March 31, 2001, the USHCC had a negative fund balance of $1.28 million.

According to Form 990s, the equivalent of a tax return for nonprofit organizations, revenues grew 21.2 percent in the last year of available data, and 125.1 percent in the last four, but total expenses grew even faster. The combination of operating expenses plus "other" program expenses has increased 163 percent during the four years, with "other" claiming the bulk of the increase (see table, "USHCC Finances").

The main sources of revenue in 2001 were the annual convention ($2.67 million) and television ($1 million) – a reference to the chamber's syndicated show Hispanics Today. Membership dues totaled $519,834, or 8.66 percent of all revenues.

Major program expenses included consultants and outside services ($1.64 million), advertising and promotion ($1.22 million), food and beverages ($343,261), and bad debt expense ($157,750). Costs for specific programs, such as the convention or the TV show, are not detailed in the Form 990. The USHCC's largest administrative expenses were salaries and compensation ($1.17 million), travel ($528,849), conferences ($267,366), printing and publications ($209,497), rent ($145,470), and legal fees ($134,551).

According to George Lasnier, the USHCC's new CFO, the "2002 Form 990 will contain the audited financial report for our fiscal year ending March 31, 2003." Because of the March 31 date, the 2002 report isn't due to the Internal Revenue Service (IRS) until August 15. The IRS automatically grants an extension for three months if a nonprofit requests it.

To review all five years of publicly available Form 990s for the USHCC, visit the Web at www.HispanicBusiness.com/go/ushcc.

USHCC FINANCES
Year Revenues Operating expenses Other expenses Surplus/deficit
1997 $2,663,790 $1,921,257 $582,485 +$160,048
1998 $2,426,508 $1,981,606 $642,839 -$197,937
1999 $3,376,626 $1,985,197 $2,191,273 -$799,844
2000 $4,945,320 $2,848,949 $2,229,708 -$133,337
2001 $5,997,035 $3,003,382 $3,581,587 –$587,934
Change +125.1% +56.3% +514.9%  
Source: United States Hispanic Chamber of Commerce 990 Forms.

© 2003 Hispanic Business Inc. Reprinting, copying, or transmitting all or part of this information requires written permission.

Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters