How has the economic downturn affected AIGA?

“  History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas.” —President Barack Obama, Address to Congress, February 24, 2009

We are all aware that we are in the midst of an unprecedented economic downturn that is likely to have a powerful effect on the demand for design services. This is going to challenge each of us, from individual designers and design firms to AIGA itself.

The Design Leaders Confidence Index for the fourth quarter of 2008 is nearly the lowest it has been since we began tracking this data four years ago (it was slightly lower in the third quarter of 2008). Results show that 70 percent of respondents believe that the economy is worse now than it was on October 1. However, participants express some optimism about the coming six months: 30 percent believe the design economy will be moderately better by July. Another 35 percent feel it will be the same, and the remaining 35 percent feel it will worsen.

Here is what I am hearing: Agencies and in-house departments are laying off personnel; studios are busy, but often on contracts that are being reduced in scope or budget, with high demands and low margins; there is not a lot of hiring; new business development pipelines have plenty of capacity; and everyone is anxious. Still, we are absolutely confident that the economic recovery will include a critical role for design, as a driver of innovation, transparency, clarity and market differentiation.

AIGA is developing services to help designers prepare for the economy’s beginning to grow again—in particular, several training partnerships that will help designers take advantage of this slow period by improving their skills and becoming more competitive. We have also reinforced the AIGA Center for Practice Management by launching a new series of affordably priced webinars, offered exclusively to AIGA members, to help them get through the management challenges of this slowdown. We believe strongly—and many management experts concur—that the mantra of any professional designer must be: train, train, train, learn, learn, learn.

AIGA is determined to use members’ collective voices to relentlessly reinforce the relevance, respect, leadership and opportunity that design deserves.

However, AIGA, too, has been affected and needs to meet members’ expectations in a leaner form, with reduced staff and financial resources, working smarter where we cannot work harder. This is not to say that AIGA is in danger—we have a solid financial foundation, with reserves of more than $1 million and the number of designers who continue to maintain their memberships exceeds 21,000. Yet we expect sponsorship to be more difficult to attract, and that attendance at conferences and participation in the competitions may weaken.

Six months ago, AIGA was in such secure financial shape that we felt we could weather any storm. With the precipitous decline of the financial markets, our ample working capital—including the revenues from last year’s design conference and members’ prepaid dues—was suddenly half its earlier value even though it was invested prudently, conservatively and in a balanced portfolio. If AIGA liquidated its equities now to fund short-term operational requirements, it would lock in a substantial loss in value. Our strategy at this time is to make cuts in a number of areas such as printing new and existing materials, developing exhibitions, and expanding communications and public relations. Every AIGA activity has been, and will continue to be, evaluated aggressively for its effectiveness.

We know the pain many members are experiencing. AIGA is by no means immune: the CEO and COO have taken salary reductions; the contribution to staff retirement benefits has been cut by 75 percent; employer contributions to staff health benefits have been cut by 50 percent; and four staff positions were eliminated. Yet we know that we will gain the help of members to work hard to bring the profession out of this crisis with renewed strength.

AIGA will emerge stronger, but not unchanged, from this experience. We are currently—and eagerly—engaged in a process to gain members’ input on the future direction of the organization through the biennial member survey, discussions at chapters, and at the board and leadership retreats.

AIGA members have clearly stated that now is a time to think about what we can do together to promote our future strength as designers; they do not see the need to focus on what we must give members to recreate what was.

It is clearly also a time for transformation—for bold action and big ideas—and AIGA is adapting to members’ interests by advancing the profession in terms of relevance, leadership and opportunity. Watch this space for more, as we are listening to your comments and will address them and review them with the board and chapter leadership before summer.