April 2, 2024
IES Membership Drops Again, Net Loss Narrows
Despite shedding a third of its members since 2020, society reports growth and solid attendance at IES events
The Illuminating Engineering Society (IES) has published its Annual Report for the fiscal year 2022-23 casting light on both the accomplishments and hurdles faced by the organization. Amid a backdrop of a shrinking membership base, the society highlights a series of strategic moves and operational enhancements aimed at fostering growth and engagement within the global lighting community. Notably, the report reveals a continued downtrend in membership figures, juxtaposed against a backdrop of narrowing net losses, signaling a complex yet hopeful trajectory for the society's future.
As the IES grapples with challenges, its latest annual report showcases strides towards expansion, educational outreach, and advocacy, underpinned by significant operational and fiscal refinements. These efforts reflect the society's commitment to improve its global reach and fiscal health despite the headwinds of membership decline and financial pressures.
The annual report covers the one-year period ending June 30, 2023, marking the first complete fiscal year under the leadership of IES Executive Director Colleen Harper, who joined the IES in March 2022. Soon after settling into her role, Harper took decisive steps to cut expenses and has repeatedly communicated the society's need to develop a new business model and create additional revenue streams.
Expansion and Engagement:
The IES has broadened its global footprint, establishing new sections in Canada, Mexico, Colombia and the Middle East. This expansion is part of a strategic push toward a more globally integrated community.
The IES has shed one-third of its members since June 2020, but according to IES President, Billy Tubb, “The Society grew in 2023 and attendance at IES events was back to pre-pandemic levels.”
Fiscal year ending June 30
Membership:
The report indicates a nuanced landscape in membership trends. While the society has seen slight growth in big-ticket sustaining memberships, including the inclusion of Sonepar as its first distributor as a Champion Level Member, there's an implicit challenge in the broader membership dynamics. The continued decline in overall membership, particularly among standard and associate members, highlights the need for targeted strategies to bolster engagement and value proposition for potential and existing members.
Fiscal year ending June 30
Education:
The society's educational output has been significant, with the revision or renewal of 28 standards, 19 webinars, and over 15,000 hours of Continuing Education Units (CEUs) provided, demonstrating the IES's important role in advancing lighting education and standards. The IES highlighted the launch of the first edition of LD&A International and the remarkable engagement with the society's educational portal, which had over 6,000 users.
Advocacy:
Another achievement highlighted by the IES was the formation of the Lighting Advocacy Congress by the IES Diversity, Equity, Inclusion and Respect (DEIR) Committee, IALD DEIR, and LightJustice. This initiative aims to propel diversity, equity, inclusion and respect within the lighting industry.
Operational and Fiscal Refinement:
In 2023, the IES reported a modest rebound in revenue to $5.44 million, a significant recovery from the previous year's downturn to $3.82 million. Despite this increase, the organization still faced a net loss of $1.87 million, albeit an improvement from 2022's net loss of $4.80 million. The narrowed loss suggests that cost containment measures might be taking effect, with expenses trimmed to $7.31 million, but further financial strategy refinement appears necessary to achieve profitability.
A noteworthy operational change is the IES Board's decision to shift the fiscal year from a July/June to a January/December calendar. This alignment with many of its partners is anticipated to streamline the budgeting process, enhancing operational efficiency. Additionally, moving the IES headquarters to a WeWork space and other operational efficiencies are expected to substantially reduce expenses. According to the report, “With the Wall Street office lease termination and other operational efficiencies beginning in 2024, the IES's expenses will drastically decrease to be more appropriate for a nonprofit of its size.”
Fiscal year ending June 30
LightFair impact:
With LightFair often drawing over 25,000 attendees in the 2010s, IES enjoyed ten significant revenue boosts each decade. In fiscal year 2018-19 LightFair generated $3.3 million of the IES' $7.7 million in revenue. However, with LightFair's revenue declining in the 2020’s and the event now occurring only five times per decade, IES is emphasizing alternative revenue streams to help improve its financial health. New one-third owner Messe Frankfurt replaces ANDMORE and gives hope to establishing a more positive LightFair trajectory in 2025 and beyond.
The Largest Revenue Source is also a $1M Net Loss:
Publishing, generating $1.78 million, stands as the largest revenue stream for IES, accounting for 33% of its total income through publications such as "LD+A, LEUKOS, Standards & Education." However, it also represents the largest expense, consuming 38% of resources and totaling $2.77 million, leading to a net loss of $1 million in the publishing category.
Assets on hand:
IES aims to secure its long-term financial stability by halting a trend of consecutive seven-figure net losses spanning over four years. As of June 2022, IES reported total assets of $12.3 million, a decrease from $17.6 million the previous year. Out of the June 2022 assets, approximately $9.2 million were in liquid investments or cash accounts.
The annual report promises, “The IES business model is rapidly changing, and the 2024 fiscal year will showcase significant diversification of revenue with additional standards-based education and events.”
Under the leadership of Executive Director Colleen Harper, the Illuminating Engineering Society has undergone transformative changes, since she took the helm two years ago. With a significant reduction in headcount, a strategic relocation of its headquarters to a WeWork space, and a focus on income streams beyond traditional LightFair revenues, the IES today promises a leaner, more agile organization focused on long-term sustainability and growth.
