We quote:
“Hi fellas
On 3 June you asked :
‘Question: Why is the book not sold at "cost" anymore? Why is AA literature being sold at a profit?’
And what a profit!
The accounts for the year ended 30 September 2012 show at note 3 :
Literature income : £512,138
Literature
expenses : £177,958
That means our books and pamphlets are being sold at almost THREE TIMES cost!
That’s not just ‘making a profit’. It’s certainly not what Bill W. had in mind when he defended book profits in Concept XII. It is downright racketeering.
While we’re on the subject of the accounts – and I have attached them as filed at Companies House for you – how are we supposed to reconcile the following:
Page 6 – plans for future periods
That means our books and pamphlets are being sold at almost THREE TIMES cost!
That’s not just ‘making a profit’. It’s certainly not what Bill W. had in mind when he defended book profits in Concept XII. It is downright racketeering.
While we’re on the subject of the accounts – and I have attached them as filed at Companies House for you – how are we supposed to reconcile the following:
Page 6 – plans for future periods
[A
very sound aim. I have absolutely no problem with this.]
Page 10 – statement of financial activities
Page 10 – statement of financial activities
Total
funds carried forward : £1,908,601
So, one year’s ‘costs’ is £1,235,000 although this includes literature sales – hardly a ‘running cost’ as these sums generate a significant profit. Despite holding well over a year’s costs in reserve at the end of the previous year, the Board made a surplus in excess of a quarter of a million pounds in the latest year! It now holds almost TWO years’ running costs in reserve!
AA GB is unquestionably ‘continuing to accumulate funds for no stated AA purpose’, in clear breach of Tradition 7. There is also Concept XII which warns against becoming ‘the seat of perilous wealth’.
A solution? The way forward is clear. Cut the price of literature to much nearer cost.
This has the following benefits :
Reduces the unnecessary surplus.
So, one year’s ‘costs’ is £1,235,000 although this includes literature sales – hardly a ‘running cost’ as these sums generate a significant profit. Despite holding well over a year’s costs in reserve at the end of the previous year, the Board made a surplus in excess of a quarter of a million pounds in the latest year! It now holds almost TWO years’ running costs in reserve!
AA GB is unquestionably ‘continuing to accumulate funds for no stated AA purpose’, in clear breach of Tradition 7. There is also Concept XII which warns against becoming ‘the seat of perilous wealth’.
A solution? The way forward is clear. Cut the price of literature to much nearer cost.
This has the following benefits :
Reduces the unnecessary surplus.
Helps groups carry and ‘preserve
the integrity of the AA message’ (Foreword to 4th
Edition).
Makes local AA groups, rather than
huge book warehouses via Amazon, the cheapest place to buy our
literature, a fundamental part of a meeting’s attraction.
…......
Also have a look at note 14 – Fixed Asset Investments. Much of our funds are being invested by Morgan Stanley in… the well-known tax haven that is Luxembourg! If this were widely known, would it risk ‘being drawn into public controversy’ in breach of Tradition 10?
In fellowship
….......”
Our response:
“Hi ….....,
Thanks for the mail – and the analysis. Needless to say we agree with your position. We had a look at the attached report you sent us.
It does state clearly there that (under the Reserves Policy) “free reserves ….should exceed 1 years expenditure …. £1,200,000 … At present free reserves amount to £1,824, 367”.
This wording implies that the 1 year figure is a minimum – an invitation perhaps to the economically insecure to continue to build these up to what level? How much is prudent? £2,000,000 …. £3,000,000... and so on. Later on in the report it is in fact stated that “the future aim is to hold a reserve of 1.5 million pounds – equivalent to one years' running costs”. In our view at a time of economic austerity the aim should rather be to plan for economies not increases.
With regard to literature the report explicitly states that the “literature plays an important role in terms of personal recovery, carrying the message and financial stability”
Even further on under Achievement and Performance reference is made to the traditions but in fact misquotes them ie. “the Fellowship is self- supporting through the contributions of its members” where it should read “voluntary contributions”
Moreover it's interesting to note in this connection that the accounts (again explicitly) distinguish between “voluntary income” ie. that generated by contributions, covenants, conventions and conference, and “activities for generating funds” ie. literature sales. Clearly for accounting purposes book sales are not considered to be “voluntary” - yet more evidence of this continuing breach of our traditions!
When it comes to the profit generated by literature sales we were quite surprised at its scale: £334,180 or a mark up of 188 per cent (of cost). We're not sure what the average profit on a book generally is (this seems to vary quite a lot) but of course AA shouldn't be making a profit on these at all.
(An additional problem is that part of these book sales will be to “outside organisations” eg. treatment centres. In this case we are clearly failing to “decline outside contributions”)
The solution to this problem (where conference – or groups - continue to be unwilling to act – which is all too frequently the case!) is for AA members themselves to take direct action. We encourage people to access the free online literature on the GB and AAWS sites and members of the team make a point of mentioning these facilities at meetings. This free literature includes pretty well all of the pamphlets and leaflets as well as the Big Book and the Twelve Steps and Twelve Traditions. For those who are in the know the other books (As Bill Sees It etc) can also be found free online (although these editions are in breach of copyright).
It might be worth putting a question to conference on the matter. It has been done before but at least it keeps the issue alive.
We'd be quite happy to put your contribution on the site (suitably edited) since we agree that it's an important issue. Our failure to act according to our own principles presents AA in a bad light damaging both our reputation and integrity.
Thanks again for the mail”
(our edits and emphases)
Cheerio
The Fellas (Friends of Alcoholics Anonymous)
…......
Also have a look at note 14 – Fixed Asset Investments. Much of our funds are being invested by Morgan Stanley in… the well-known tax haven that is Luxembourg! If this were widely known, would it risk ‘being drawn into public controversy’ in breach of Tradition 10?
In fellowship
….......”
Our response:
“Hi ….....,
Thanks for the mail – and the analysis. Needless to say we agree with your position. We had a look at the attached report you sent us.
It does state clearly there that (under the Reserves Policy) “free reserves ….should exceed 1 years expenditure …. £1,200,000 … At present free reserves amount to £1,824, 367”.
This wording implies that the 1 year figure is a minimum – an invitation perhaps to the economically insecure to continue to build these up to what level? How much is prudent? £2,000,000 …. £3,000,000... and so on. Later on in the report it is in fact stated that “the future aim is to hold a reserve of 1.5 million pounds – equivalent to one years' running costs”. In our view at a time of economic austerity the aim should rather be to plan for economies not increases.
With regard to literature the report explicitly states that the “literature plays an important role in terms of personal recovery, carrying the message and financial stability”
Even further on under Achievement and Performance reference is made to the traditions but in fact misquotes them ie. “the Fellowship is self- supporting through the contributions of its members” where it should read “voluntary contributions”
Moreover it's interesting to note in this connection that the accounts (again explicitly) distinguish between “voluntary income” ie. that generated by contributions, covenants, conventions and conference, and “activities for generating funds” ie. literature sales. Clearly for accounting purposes book sales are not considered to be “voluntary” - yet more evidence of this continuing breach of our traditions!
When it comes to the profit generated by literature sales we were quite surprised at its scale: £334,180 or a mark up of 188 per cent (of cost). We're not sure what the average profit on a book generally is (this seems to vary quite a lot) but of course AA shouldn't be making a profit on these at all.
(An additional problem is that part of these book sales will be to “outside organisations” eg. treatment centres. In this case we are clearly failing to “decline outside contributions”)
The solution to this problem (where conference – or groups - continue to be unwilling to act – which is all too frequently the case!) is for AA members themselves to take direct action. We encourage people to access the free online literature on the GB and AAWS sites and members of the team make a point of mentioning these facilities at meetings. This free literature includes pretty well all of the pamphlets and leaflets as well as the Big Book and the Twelve Steps and Twelve Traditions. For those who are in the know the other books (As Bill Sees It etc) can also be found free online (although these editions are in breach of copyright).
It might be worth putting a question to conference on the matter. It has been done before but at least it keeps the issue alive.
We'd be quite happy to put your contribution on the site (suitably edited) since we agree that it's an important issue. Our failure to act according to our own principles presents AA in a bad light damaging both our reputation and integrity.
Thanks again for the mail”
(our edits and emphases)
Cheerio
The Fellas (Friends of Alcoholics Anonymous)
