Business Groups’ Feel Recession Pinch : Memberships: Chambers of Commerce, others are hurting as businesses trim memberships to cut costs.

Patrick McIntyre, owner of Anytime Signs in Chula Vista, is carefully scrutinizing the costs and benefits associated with each of his business and professional organization memberships. “Money is tight,” said McIntyre, who recently saved $300 in annual dues by severing Anytime Signs’ six-year membership in San Diego Convention & Visitors Bureau.

Anytime Signs isn’t the only company that is paring operating costs by eliminating or cutting back on dues payments. Nationwide, the recession has prompted a leveling off or a drop in memberships and dues at chambers of commerce and business and professional organizations.

Locally, the recession has had a dramatic impact upon dues-dependent organizations. Membership or dues have fallen or stalled at most organizations, including ConVis, the Greater San Diego Chamber of Commerce, the San Diego Economic Development Corp., the San Diego Hotel & Motel Assn. and the Oceanside Chamber of Commerce.

* The San Diego and Oceanside chambers of commerce, two organizations whose economic health is directly tied to the county’s stalled economy, recently were forced to lay off key officers. The Greater San Diego Chamber of Commerce’s economic crunch is being driven in part by a drop-off in dues from larger members, including HomeFed Bank, San Diego Gas & Electric and some local real estate development firms.

* The San Diego Economic Development Corp. has been scrambling to offset a drop in dues from larger members by drumming up financial support support from smaller companies.

* ConVis membership levels, which generally had weathered economic downturns, fell for the first time in recent history.

* Earlier this year, record levels of members fell behind on dues payments to the Oceanside Chamber of Commerce. Most of the members blamed the recession for the late payments.

The recession has forced most organizations to review annual budgets that were drawn in rosier economic times. Many organizations are adding substantive, new services that are designed to help attract and retain members.

The local dues and membership slide was exacerbated by the disappearance of Great American Bank and Aerojet General, two of the city’s largest locally based corporations. Great American, long one of the city’s most generous corporate givers, ran into severe financial problems before being seized by federal regulators. La Jolla-based Aerojet moved its corporate headquarters to Sacramento.

The Greater San Diego Chamber of Commerce and the San Diego Economic Development Corp. were further hurt when San Diego Gas & Electric shifted chamber and EDC donations to other organizations. SDG&E; withdrew from the chamber and dramatically trimmed its EDC contribution because the two groups opposed its ill-fated merger attempt with Southern California Edison.

But it is the recession that has had the biggest impact upon the county’s dues-dependent organizations. Dues and memberships began to stall at the Greater San Diego Chamber of Commerce in late 1990.

Then, a handful of larger corporations, including financial institutions and real estate development corporations, cut contributions in an attempt to bolster their profitability. Financially troubled HomeFed Bank, for example, cut its annual $9,000 contribution to the chamber to $5,000, HomeFed spokeswoman Monica Wiley said.

Most of the county’s larger businesses remain members in good standing, but the losses were especially painful because “just 20% of the members contribute 80% of the dues,” Chamber President Lee Grissom said. “And, only 300 members contribute $1,000 or more annually.”

The chamber responded to the dues drop with an austerity program that included layoffs and attrition that trimmed the chamber’s staff by seven positions. Grissom, who took a 20% salary cut earlier this year, let go longtime officer Bernice Leyton and vice president of military affairs Robert Hudson.

The “painful” staff reduction produced more than $155,000 in annual savings, Grissom said. The chamber also has mandated that each of the 600-odd meetings, seminars and programs that the chamber plays host to each year must pay for themselves.

The cost-cutting was prompted in part by the chamber’s decision to leave its lower-cost offices in the downtown Chamber Building and move into the newly opened Emerald Shapery Center.

Lease terms allow the chamber to delay rent payments for several years. However, the chamber assumed about $300,000 in debt to help cover expenses generated by the move, Grissom said. “The no-rent period is designed to give us a bit of breathing space,” Grissom said. “It’s an opportunity for us to improve our (cash) reserves for when the rent does begin to kick in.”

The decision to move into the more-expensive Emerald Shapery Center was made three years ago when the economy was rosier, according to Grissom, who, along with chamber board members, has described the Chamber Building as ill-suited for the chamber’s mission.

Some of the chamber’s financial woes are tied to the 1990 loss of SDG&E;, which was the organization’s single largest contributor at $25,000.

Although SDG&E; Chief Operating Officer Jack Thomas said that SDG&E; is reviewing ways to “develop relations” with the chamber and other nonprofit organizations . . . we are reluctant to take away money from someone else . . . in order to restore contributions” to organizations that previously received funds.

SDG&E;, which has increased its overall corporate giving slightly during the past year to $1.6 million, “has no fundamental differences with the chamber or the EDC,” said Thomas, who met last week with Grissom and Chamber Chairman Mel Katz.

The EDC also has felt the impact of dues cutbacks by large companies.

Struggling HomeFed Bank reduced its annual corporate contribution to the EDC to $1,300, down from $2,500, Wiley said. SDG&E;, reacting to the EDC’s opposition to the now-dead Edison merger, cut its annual contribution to $1,000, down from $5000, Thomas said.

Koll Development Co., which recently joined the Greater San Diego Chamber of Commerce, also cut in half its historical $5,000 annual donation to EDC, said Koll Development Vice President Charlie Abdee. With revenue falling, Koll has been “rethinking our dues, subscriptions and donations,” Abdee said.

EDC responded to the drop in dues by “hustling” for new members, EDC President Dan Pegg said. Consequently, paid memberships rose to 180 companies, up from 176 a year ago. However, dues fell to $219,000 from $230,000.

Pegg linked the dues drop to the fact that “you’ve got to hustle five $1,000 contributions to make up for one $5,000 member.”

At ConVis, dues income has “held up pretty well,” but membership levels, which historically have risen, fell by 100 to 1,500 members during the past year, according to ConVis Vice President Al Reese.

“That’s the first time in our history that we’ve seen a decline in membership,” Reese said. “We’ve never seen such a (membership) retention problem as we have during this recession.”

In most cases, it was the economy that drove companies to drop ConVis memberships.

Wendy’s of San Diego, a local company that owns 25 Wendy’s Old Fashioned Hamburger restaurants in San Diego County, is a case in point.

Although Wendy’s remains a member in good standing at “just about every chamber of commerce in the county,” the fast-food franchisee recently dropped its membership in ConVis, said Wendy’s spokeswoman Jan Stephans.

“We were looking for ways to cut costs,” Stephans said. But the decision to stop paying ConVis was “something we did temporarily,” Stephans said. “We intend to join again in a month or two.”

The Oceanside Chamber of Commerce cut almost $60,000 from its budget in early 1990 when the economy began to sour. Earlier this year, the chamber laid off its general manager and its economic development and tourism directors.

“We’ve cut everything that we can cut,” said Stebbens Dean, the chamber’s chief administrative officer. “We’re also talking about consolidating two of our facilities.”

The Oceanside chamber, which hit a record high of about 750 members more than a year ago, dropped to a low of 680 members during early 1991. Dean said that the number of delinquent members has leveled off in recent months.

Although membership levels at some organizations are beginning to stabilize, many officers and directors remain uncertain about what 1992 will bring.

“The real answer for us and other nonprofit organizations is when next year’s (dues) invoices go out,” and members decide which affiliations to keep, said Wayne Raffesberger, executive director of San Diegans Inc., which represents downtown interests.

While San Diegans Inc. has lost a handful of members in recent months, revenue from dues has remained fairly constant. But the organization is no longer considering a dues increase, because results from a recent questionnaire “suggest that it might be the wrong time,” Raffesberger said.

Organizations are responding to the recession by bolstering services in order to make themselves more attractive to members.

The California Hotel & Motel Assn., for example, has managed to “lure back about a third of the companies that wanted to quit . . . by expanding our programs,” Vincent said. Members now qualify for a “specialized” long-distance telephone rate through Sprint to its members. The association is also helping members to cut natural gas bills by making bulk purchases direct from natural gas suppliers.

The Greater San Diego Chamber of Commerce is readying a group health plan that will be “attractive” to smaller companies, according to Chamber President Lee Grissom. The plan will replace a similar--and very popular--program that was canceled when the provider went bankrupt, Grissom said.