C.A.R Strategic Planning Presented by Joel Singer September 2012

CAR’s Strategic Planning Approach Zero-based Objective-Focused Actual Resource Allocation

CALMLS RERS 100% REBT, Inc. 100% CREIEC REBS C.A.R. CREPACIMPAC CREPAC Federal Scholarship Foundation Housing Affordability Fund Education Foundation zipLogix 64.4% REBOS 50% NHD X X REBT, LLCSAREC X X REMT 100% X X Organizational Chart X

CREIEC REBS C.A.R. CREPACIMPAC CREPAC Federal Scholarship Foundation Housing Affordability Fund Education Foundation REBT, Inc 100% zipLogix, LLC 64.4% California Holding Co. Inc Current Organizational Chart

2012 Projections and Long- Range History

Membership 158,000 Dues Revenue$ 17.5 million Non Dues Revenue*$ 8.4 million Net Deficit$ (1.6) million 2012 Revised Projection * Investment income included. * No REBS transfer

$ Millions C.A.R. & Subsidiaries Combined Revenue 36

REBS. Revenue $3.8million Net Surplus $243,700 REBT, Inc. Revenue $354,200 Net Surplus $307,200 Before Transfer zipLogix (64.4%) Revenue $6.3 million Net Surplus $1.5 million 2012 Projection for Profit Entities

Combined Revenue REBS & Subsidiaries $ Millions

REBS & Subsidiaries Combined Net Income $ Thousands P2011 1,523 1,541 (351) 1, ,045 (1,081) 360 (177)

REBS Transfer to C.A.R. ($ Million) Total Dividend Transfer to CAR 1996 to $27.6 Million. No REBS transfer in 2012

Million REBS Inc. and Subsidiaries Projected Cash Balance – December 31, 2012

Initial investment $398,000 Total dividend $ 8.5 million excluding tax distribution since inception Total dividend and tax distributed to REBS $14.6 million since inception Current equity 10 million (C.A.R. Portion $6.5 million) zipLogix

2013 Budget Analysis Revenue Expenditures Membership

2013 Budget vs Projection * Note: 2012 projection includes the proposed augmentations and no REBS transfer

2013 Core Program Budget Expenditures vs Projected Expenditures by percentage 2012 Projected Expenditures 2013 Core Program Budget Expenditures

10 Largest Core Program Expenditures in 2013 & 2012

Number of Budgeted Staff Positions Number of Staff In 2012 added four Field Representatives, one Membership and one Sales Rep. In 2013 eliminated one Field Representative, one Political Analyst and one Contact Center; two new staff added for new programs

Member-to-Staff Ratio

Dues Per Member & Total Dues Collected California Association of REALTORS ® $ Millions 115

Dues Per Member (Current Dollars vs. Inflation-Adjusted Dollars) (Base Year = 1990) 1995 IAF + $ PAF + $ RAA + $49 In 2013 the member benefit provided per member is $187 vs $115 actual dues

Membership Dues Reduction in 1995 The Membership Dues was reduced in 1995 from $77 to $64 Same year the Issue Action Fund (IAF) $10 was implemented

Political Assessment included in Membership Dues In 1995 Issues Action Fund (IAF) $10 In 2000 Political Action Fund ( PAF) $10 In 2011 Realtor Action Assessment (RAA) $49

RevenuePercentage Dues Revenue as Share of C.A.R. & Subsidiaries Total Revenue

Member Benefit Dollars Provided In 2013 the member benefit provided per member is $187 vs. $115 actual membership dues

New Member Services Added Last 10 years Forms Advisor/Tutor ZipForms ® Digital Ink ZipVault ePUBS C.A.R. Online Redesign Consumer Advertising Campaign Customer Contact Center Field Program Housing Affordability Legal Hotline Expansion Strategic Defense Communication Video Content Statewide Ombudsman Young Professionals Network Local Candidate and Campaign Field C.A.R. Electoral Services

REALTOR® Advertising Media: Radio Television Online Video Social Media Core Program Cost$2,007,500

Cycle 1: ,346 (peak) to ,655 (trough) % Cycle 2: ,025 (peak) to ,500 (trough) % Cycle 3: ,254 (peak) to 9 Years 3 years 7 years 9 years 6 years Membership Comparison

Liquid Reserves

2013 Proposed Core Budget Summary

2013 New Programs Summary Approved by SPF Committee

2013 New Programs Summary Not Approved by SPF Committee

2013 New Programs (One-time Impact) Homeownership Matters/IDA Program Real Estate Research Symposium Trends Database Upgrade REALTOR® S.W.A.T. Market Opportunity Conferences Strategies for Thought Leadership Conference Enhanced Local Association Services

2013 New Programs (Ongoing Impact) MLS-Connect CE Credit Thought Leadership Initiative Enhanced Survey Research Initiative Lender Ombudsman Financing Resource for REALTORS® Industry & Broker Relations Program Property Management & Investment Section Statewide Ombudsman Program Local Association Mobile App Champion of Home Heroes REALTOR® Rating 360 (Peer-to-Peer) Pilot Program Microtargeting Strategies Local AOR Incentive Program

REALTOR® Action Fund: Fundraising Program $524,500 CREPAC Local Candidate Field Program $375,300 REALTOR ® Receptions $197,100 C.A.R. Electoral Services $39,500 Federal Governmental Relations $25,100 for Officers travel to lobbying trip Communications $20,000 for design of membership value campaign materials Total Funded by RAA - $1,181,500 Programs Funded by REALTOR® Action Assessment (RAA)

Worst Case Dues Adequacy Scenario $ (Thousand)

Worst-Case Scenario Reserves

CREPAC IMPACCREIEC CREPAC Federal Political Action Committees

Membership Dues $184 $115 (62.5%) Support Programs $69 (37.5%) Support Political Activities Membership Dues and Assessments

Percentage of Members Making RAF Contributions

C.A.R. Membership Dues Housing Affordability Fund (HAF) $10 and up Voluntary Contribution Voluntary Contribution Membership Dues Assessments & Voluntary Contributions REALTOR® Action Fund (RAF) $1 to $5,000 C.A.R. Member Dues $184 IAF $10 RAA $49 C.A.R. Dues $115 PAF $10

Political Activities Fund Political Activities Fund (PAF) $10 IMPAC-Local Matching 10% of RAF IMPAC- State Matching 5% of RAF Remaining Balance Political Activities Fund support

Issues Action Fund (IAF) $10 Issues Action Fund IMPAC/CREPAC/LCRC Program Cost Remaining Balance Allocate 30% to Local IMPAC Allocate 70% to State IMPAC

REALTOR® Action Assessment REALTOR® Action Assessment (RAA) $49 Program funded by RAA CREPAC 45% LCRC 30% CREIEC 25%

REALTOR® Action Fund (RAF) $1 to $5,000 Personal Contribution REALTOR® Action Fund LCRC 30% $1 to $200 Personal CREPAC Federal 70% $1 to $200 RAF $1 to $200 RAF Personal $201 to $5,000 to CREPAC/FED

REALTOR® Action Fund (RAF) $1 to $5,000 Corporate Contribution REALTOR® Action Fund LCRC 30% $1 to $200 Corporate CREIEC 70% $1 to $200 RAF $1 to $200 RAF Corporate $201 to $5,000 to CREIEC

CREPAC State $2,687,979 CREPAC State $2,687,979 CREIEC $1,493,322 CREIEC $1,493,322 RAF Receptions $175,000 Fed Gov’t Relations (Officer’s Lobbying Trip) $25,100 Fed Gov’t Relations (Officer’s Lobbying Trip) $25,100 Campaign School $50,000 Campaign School $50,000 RAF Fundraising/RPC $663,500 RAF Fundraising/RPC $663,500 Program Costs $1,384,713 Program Costs $1,384, REALTOR® ACTION Assessment Allocation LCRC $985,592 LCRC $985,592 IMPAC Local $806,394 IMPAC Local $806,394 PAF Field Program $4,313 PAF Field Program $4, % of RAA after program costs 30% of RAA after program costs C.A.R. Electoral Services $39,700 C.A.R. Electoral Services $39,700 Member Mob Phone App $35,000 Communications Membership Value Campaign materials $20,000 Communications Membership Value Campaign materials $20,000 CREPAC Local Candidate Field Program $372,100 CREPAC Local Candidate Field Program $372,100 Based on 2012 Budget

CREPAC State $2,709,405 CREPAC State $2,709,405 CREIEC $1,505,225 CREIEC $1,505,225 Fed Gov’t Relations (Officer’s Lobbying Trip) $25,100 Fed Gov’t Relations (Officer’s Lobbying Trip) $25,100 Program Costs $1,181,500 Program Costs $1,181, REALTOR® ACTION Assessment Allocation LCRC $812,822 LCRC $812,822 IMPAC Local $993,449 IMPAC Local $993, *70% of RAA after program costs *30% of RAA after program costs Based on 2013 Proposed Budget CREPAC Local Candidate Field Program $375,300 CREPAC Local Candidate Field Program $375,300 C.A.R. Electoral Services $39,500 C.A.R. Electoral Services $39,500 Communications Membership Value Campaign materials $20,000 Communications Membership Value Campaign materials $20,000 RAF Receptions $197,100 RAF Fundraising/RPC $524,500 RAF Fundraising/RPC $524,500

Political Fundraising $ Millions 6.6 California Association of REALTORS ®

Political Contribution Revenues

Political Action Committee- Fund Balance As of August 31, 2012 California Association of REALTORS ® Million

FOUNDATIONS Scholarship Endowment $1.2 million Education Endowment $96,929 Housing Affordability Funds Funds Available $2.9 million Foundations As of July 31, 2012 $4.2 million

$ Millions Housing Affordability Fund Since Inception, as of July 31, 2012

$ Millions Housing Affordability Fund

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