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October 6, 2016
Dear Toastmasters Members,
I hope your club meetings are going well and that wherever you are in your journey you are learning, growing and fully participating.
During the Toastmasters International Convention held this past August, I became your International President. It is my privilege to serve you and the organization. It is a tremendous responsibility that I take very seriously as chair of the Board of Directors.
At our annual business meeting in August, the member clubs voted, in person and by proxy, to elect new members to the Board and make changes to the Toastmasters International Bylaws that will enable our future success and ability to support clubs and members worldwide.
There has recently been a good deal of discussion, from a handful of vocal members, regarding the dues increase, investments, use of funds and Toastmasters’ future. I offer updates on several topics to provide clarity and context.
Much of the groundwork for the Toastmasters of tomorrow began with the 2010 Strategic Plan. It called for significant improvements to our communication and leadership learning, global connectedness, brand consistency, club excellence, leader development and technology to support members and leaders at all levels.
Investments
Toastmasters has been consistently investing in programs directly related to the objectives set forth in the 2010 Strategic Plan. The most significant are Pathways, leader development and support, and our technology infrastructure:
The Toastmasters Pathways learning experience, for which more than $2 million has been invested to date, is the most critical to all members’ growth and development. The new experience will offer individuals real-world, transferable skills and offer corporations and other organizations a practical, economical avenue to build the skills of the workforce. The return on investment is anticipated to be highly favorable through increased retention and membership growth.
Club and district leaders are the foundation of Toastmasters, ensuring club quality and member achievement in all parts of the world. They lead the administration and growth of Toastmasters at the local level, contributing countless hours of their time to support others and grow themselves. Toastmasters has made significant investments in the support and development of these leaders to ensure that they have the tools to perform their roles and succeed. Since 2010, we have grown from 262,000 members and 12,500 clubs in 113 countries to 345,000 members and 15,900 clubs in 142 countries. As a result, we have extended our hours of Member Service availability at World Headquarters, increased the number of staff members dedicated to leader support and invest more than $3 million annually to properly train and support club and district leaders around the world.
Over the next three years, Toastmasters will invest more than $2.5 million in our information technology infrastructure. The association management system (AMS) we rely on to store all member, club and district data must be upgraded to scale with our growing organization. The AMS is the backbone of our operations. All transactions are conducted or tracked through this system, and it must be robust, scalable and secure so that members, leaders and World Headquarters staff are able to conduct business easily and safely. Initiatives such as this have the potential to reduce costs through enhanced self-service and support.
Toastmasters is a complex, global educational non-profit organization that focuses on the satisfaction, success and achievement of members with diverse needs, practices and cultures. To properly understand and support the growth, development and experience expected by our members and to maintain our global reputation, thoughtful, sophisticated planning, development and resource allocation are critical. Now more than ever, we make decisions based on thorough research that takes into account the experiences, needs and wants of members worldwide. To remain relevant, Toastmasters must appeal not only to communities and individuals, but to the many thousands of organizations that now and in the future will sponsor Toastmasters clubs.
Much of this complexity is managed by the professionals at World Headquarters. The investment in our leaders, initiatives and staff is necessary to support today’s demands and future needs.
World Headquarters Relocation
After 26 years, the building in Rancho Santa Margarita, California, no longer meets our current and future needs. The Board embarked on a multiyear process to determine the most beneficial location for World Headquarters by focusing on our long-term future and the need to be located in a dynamic, growing area that attracts a talented workforce in a more cost-effective environment. In August 2016, the club membership vote to change the bylaws gave your Board the discretion to place our World Headquarters in the most appropriate location. As a result, the Board has made the decision to purchase a building in the Denver, Colorado, area and move World Headquarters to this new location.
This is a decision that the Board took very seriously. The investment in the new location is significant – the purchase of the Colorado property is budgeted not to exceed $19.5 million. We have budgeted no less than $7 million from the sale of the California property. The purchase of new property in California, similar in size and geographic characteristics to the Colorado property, was estimated to be more than $32 million. The Colorado property will be partially occupied by Toastmasters; the remainder of the space will be leased, providing an additional income stream. The new property is estimated to provide adequate space for 25 to 30 years, which is consistent with our organizational strategy over time: the original World Headquarters in Santa Ana, California, was occupied from 1964 to 1990; the Rancho Santa Margarita property will have been occupied from 1990 to 2018.
Executive Compensation
In addition to questions regarding investments and the World Headquarters building, attention has been drawn to the salaries of key World Headquarters personnel. These salaries are publicly available per United States law. Claims that the compensation is excessive and a primary factor leading to the recent dues increase are false. Dues were increased to meet the constantly rising cost of providing continued service to our members.
The salary paid to our Chief Executive Officer is reviewed annually by the Board after consultation with an independent consultant that researches and compares the salaries paid to comparable CEOs in similar size and type of organizations. Toastmasters must compete in the marketplace for the services of a competent CEO irrespective of whether the competing organizations are for-profit or not-for-profit. If we simply used an online salary estimator, such as Salary.com, and compared to the lowest compensated charity-based CEOs to evaluate and determine fair compensation, we would not be able to attract, retain and motivate senior staff. The key is to find reasonable and competitive compensation within the talent marketplace. You can always find someone to work for less – the questions is, will that person be capable of leading the staff of a global organization and partnering with the Board to accomplish the strategic vision?
Current compensation for the executive staff is in the midrange of like positions, which is by no means excessive. Furthermore, the Board believes that we are fortunate to have Daniel Rex as our CEO. The salaries of our other executives are determined by the CEO using the same analysis provided by the independent consultant, and are approved by the Board through the annual budget.
Member Representation
Toastmasters’ bylaws were created and can only be modified by the membership during the annual business meeting. Through bylaws, the membership delegates certain authority and responsibility to the Board. This is articulated through policy and protocol. When the Board modifies policy, it does so on your behalf. You elected these fellow members and entrusted them to carry your best interests and the best interests of the global organization to deliberations and decisions.
It is the prerogative of any member to ask questions about Board decisions; however, it is not a member’s right to harass and bully other members by means of unsolicited communication. Toastmasters affords every member the opportunity to become part of decision-making through the election process. Our leaders at all levels are elected by their peers to represent the best interests of the clubs and the organization. If a member is dissatisfied with the organization, its rules or bylaws, the appropriate course of action is to stand for office, be elected by your fellow members and seek to bring about the change you desire.
Our organization has four core values: Integrity, Respect, Service and Excellence. I ask all members to demonstrate integrity by their actions, to respect fellow members’ opinions as well as their right to privacy. With regard to service, be prepared to take on a leadership role if you wish to contribute to the progress and development of Toastmasters for the benefit of our global membership.
From time to time you can expect to receive updates like this regarding recent decisions the Board has made, to provide you with greater understanding and clarity.
On behalf of the Board of Directors,
Sincerely,
Mike Storkey, DTM
International President 2016-2017
Toastmasters International
www.toastmasters.org