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Seroing Ainerica's State Legis/ators for 25 Years

uAl"ss Plan.

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AMERICAN LEGISLATIVE EXCHANGE COUNCIL

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1998

BUSINESS

PLAN

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Th& document contains confidential and proprietary information belonging exclusively to ALEC

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Table of Contents
Executive Summary .. ... .. . . . . . . . .. .. . . . . . . . ... . . . . . . . .. ... . . . . . .. .. .. .. . . . . . . .. .. .. . . . .. .. ..... . . . . . . . .. . . .. . . . . . . . . .. . . . . . . . .. .. . .. . . . . .1
ALEC Overview . . . . . .... . . . .. ..... . . . . . . . .... .. . . . . . ... .... . . . .. .. ... .... . . . . ..... . . . . .. . . .... .. . . . . . . ...... . . . .. .... . . .. . . . . . . .... .. . . . .. ..4

' Legal Description

- Governance Structure
' - Management

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Market Analysis . . . ... . . . . . . .... . . . . . . . ... .... . . . .. .. . .. . . . . . . . .... .. . . . . . .. ....:. . . . . . . .. .... . . . . .. . ... . . .. . . . ....... . . . . . . . .... . . . . . . .... ..7
- Market Definition
- Strengths
- Programs & Services
Mission and Goals . .. .. . . . . . ..... .. . . . . . .. .. .. . . . . .. . ... . . . . . . . ....... . . . .. . . .... . . . . . . .. .. .... . . . . . ..... .. . . . . . .. .... . . .. . . . . . . .... . . . . . .12
- Mission Statement
- Goals
- Objectives & Strategies
Development Plan . .. . . . .... .. . . . . .. .. .. .. . . . ....... . . . .. .. ... . . . . . . . .. .... . . . . . .. ....... . . . . . .. . . .. . . . . . . . ... . . . . . . . ....... . . . . . . . .... . . .16

- 1998 Plan

- 25th Anniversary Campaign
- State Leadership Teams

- Membership Levels/Benefits
- Annual Meeting Sponsorship Levels/Benefits
Financial Plan .... . . . . . . .... . . . . . .. ....... . . . .. .... . . . . . . .. .... .. . . . .. . .... .. . . . ...... . . . . .. . . .... .. . . . ......... . . . . . .... . .. . . . . . . . .... . . . ..25
- Budget & Accounting System
- Balance Sheet
- Internal Controls
1998 Budget Summary .... .. . . . .. .... . . . . . : .... . . .. . .. ....... . . . .. .. .. .. . . . . . . ...... . . . . . ....... . . . . . . . .... .. . . . . . . .. .. .. .. . . . ..... . . .27
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Executive Summary

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The American Legislative Exchange Council
The American Legislative Exchange Council (ALEC) was established in 1973 by a small group of
Democratic and Republican state legislators who shared a common commitment to the Jeffersonian
principles of free markets, limited government, and individual liberty .
ALEC's credo is that the private sector should be an ally, not an adversary, of state legislators .
Through ALEC, legislators and the private sector work in a dynamic partnership to develop public
policies that harness the immense power of free markets and free enterprise to encourage economic
growth, increase the nation's competitiveness, and improve the quality of life for all Americans .

Today, ALEC has grown to become the nation's largest individual membership association of state
legislators, with 3,000 members in all 50 states, and 280 private sector members and contributors .
ALEC brings the states and the nation together through conferences, seminars, publications, and
its nine policy Task Forces . Each provides a unique opportunity for legislators to communicate
across state lines, share experiences and ideas, and work in unison with the private sector to create
effective public policies .
Legal Description
ALEC is classified by the Internal Revenue Service as a 501(cX3) non-profit public policy and
educational organization . The business location of ALEC is 910 17th Street, NW, Fifth Floor,
Washington, D .C.
Governance/Management
ALEC is governed by a National Board of Directors, which is comprised of twenty-one (21) state
legislator members . A Private Enterprise Board, comprised of a similar number of representatives
of private sector members of ALEC, supports the activities and advises the National Board of
Directors . In addition, a National Chairman's Council was established in 1996 to provide the Board
of Directors with advice concerning the financial management of the organization .
In terms of staff, the Executive Director serves as the chief administrator and directs all the
activities of the organization as prescribed by the Board of Directors . In addition, an in-house
management team, comprised of Department Directors, provides oversight regarding the program
functions of the organization .
Market Analysis
With 3,000 state legislator members from both political parties, joined by 280 private sector
members, ALEC is uniquely positioned as a legislative network that crosses geographic, political,
and economic lines . As a policy organization dealing with state-federal relations and devolution,
ALEC's influence reaches into all levels of government . No other organization in America has as

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many valuable assets, in both people and ideas, in as many key decision-making positions as does
ALEC .
Programs & Services
ALEC's success and effectiveness in influencing public policy is due largely to the programs and
services it offers to its members . ALEC offers education, shared experiences, analysis, research,
and a resource center to help its members develop model legislation and effective public policies .

Task Forces

ALEC's nine policy Task Forces provide a forum for legislators and the private sector to discuss
issues, develop policies, and draft model legislation. The nine Task Forces are : Criminal Justice ;
Civil Justice ; Education; Energy, Environment, Natural Resources, & Agriculture ; Commerce &
Economic Development ; Trade & Transportation ; Telecommunications & Information Technology ;
Health & Human Services ; and Tax & Fiscal Policy. Each Task Force is co-chaired by a public and
private sector member of ALEC .
Publications
ALEC publishes a wide array of books, white papers, and newsletters on the issues and policies
being debated in the states . In 1998, ALEC will greatly expand its communication capabilities by
opening and maintaining an in-house website page on the Internet . ALEC publications include The
Source Book of American State Legislation, Legislative Issue Briefs, the State Factor, Special
Reports, such as the Report Card on American F,ducation, and FYI . These publications and
additional information on ALEC events and activities will be made available on the website .
Conferences
In 1998, ALEC will hold two major national conferences, providing workshops on current issues
with leading experts, public figures and elected officials . The two national conferences planned for
1998 are the Annual Meeting, August 18-23, in Chicago, and the States and Nation Policy Summit,
December 2-6, in Washington, DC.
Resource Center
All ALEC members have access to the Resource Center for their information and networking needs .
ALEC's staff provides data, research, analysis, model legislation, scholarly articles, reference lists,
and expert testimony on a wide spectrum of issues .
Media Relations
ALEC provides its members with a variety of media relations services, including guest
commentaries and news releases . In 1998, ALEC will expand its media relations operations to
include special television commentaries broadcast weekly to a national audience on NET, a talk
radio outreach program, including an Annual Meeting Radiothon .

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Mission Statement

The mission of ALEC is to advance the Jeffersonian principles of free markets, limited government,
federalism, and individual liberty among America's state legislators,
Development Plan
Responses from our members (both public and private) indicate that ALEC enjoys a good reputation
in policy development, member services, and conferences . We fully intend to continue this trend .

It is vital that ALEC focus on realizing its strong potential for future growth in private sector
membership. Expanding the private sector membership base is critical for two reasons : (1) to

ensure that the views of a broad spectrum of the business community are expressed during our

policy development process ; and (2) maintain financial stability . Our development goal in 1998
is to increase by 40 the number of private sector members and foundations that belong to or support
ALEC .
In addition, in 1998 ALEC will launch a special pilot project in five states to develop State
Leadership Teams to improve member services, coordinate educational campaigns, and provide
new leadership opportunities for ALEC members .
Financial Plan
Maximizing our financial resources through sound investment strategies, and implementing
procedures to manage revenue and expenses according to budgeted parameters is the goal of ALEC's
financial plan in 1998 . Through sound business practices, ALEC will continue to meet its financial
obligations, and build the necessary financial reserves for future growth and expansion .
Conclusion
ALEC enjoys an established track record of membership services, productive meetings and
conferences, and cutting-edge policy development . The level of support and satisfaction from our
members is strong and encouraging . We intend to continue our advances in member services,
membership recruitment, policy development, and improved financial management procedures. In
this manner, ALEC can take full advantage of the historic opportunity it faces during its 25th
Anniversary .

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ALEC OVERVIEW
Legal Business Description

ALEC is classified by the Internal Revenue Service as a 501(cX3) non-profit public policy and
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educational organization incorporated under the laws of the state of Illinois . The business location
is 910 17th Street, N . W., Fifth Floor, Washington, D .C. 20006 .

Governance
ALEC is governed by a National Board of Directors, which is comprised of twenty-one (21) state
legislator members . The Board of Directors is chaired by a National Chairman who is selected by
the Board of Directors to serve a one-year term . A Private Enterprise Board, comprised of a similar
number of representatives of private sector members of ALEC, supports the activities and advises
the Board of Directors . In addition, a National Chairman's Council has been established to provide
the Board of Directors with sound advice concerning the financial management of the organization .
The National Chairman's Council is comprised of the National Chairman, up to four former National
Chairmen serving on the Board of Directors, the Chairman of the Private Enterprise Board, and up
to six private sector ALEC members nominated by the National Chairman, and confirmed by the
Board of Directors .

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1998 Board of Directors
Officers
National Chair
First Vice Chair
Second Vice Chair
Treasurer
Secretary
Immediate Past Chair
Board Members
Speaker Harold Brubaker (NC)
Sen . George Gunther (CT)
Sen . Philip Hoffman (MI)
Rep. Donna Jones (ID)
Sen . Ray Powers (CO)
Sen . Dean Rhoads (NV)
Rep . Tom Uher (TX)
Rep . Susan Wagle (KS)

Speaker Bobby Hogue (AR)
Rep. Carolyn Oakley (OR)
Sen . Ray Haynes (CA)

Sen . Brenda Bums (AZ)
Rep. Steve McDaniel (TN)

Rep. Bonnie Sue Cooper (MO)
Sen . Jim Dunlap (OK)
Sen. William Hewes, III (MS)
Sen. Owen Johnson (NY)
Rep . Donald Ray Kennard (LA)
Sen. William Raggio (NV)
Assemblyman Robert Straniere (NY)
Rep . Dale Van Vyen (OH)

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1998 Private Enterprise Board
Officers
Chair
First Vice Chair
Second Vice Chair
Treasurer
Secretary
Immediate Past Chair

Allan E . Auger, Coors Brewing Company
Michael K . Morgan, Koch Industries
Harry Winters, United Parcel Service
Les Goldberg, American Express

Edward D . Failor, Sr., Iowans for Tax Relief
Ronald F . Scheberle, GTE Telephone Operations

Private Enterprise Board
Jane Cahill, U .S . Generating Company
Marie Chelli, Joseph E . Seagram & Sons, Inc .
Richard Costigan, Pfizer Inc

Barry Coughlin, Ford Motor Company
John Del Giorno, Glaxo Wellcome Inc.

Scott Fisher, Philip Morris Management Corp .
Kip Howlett, Chlorine Chemistry Council
Jeffrey Lane, Procter & Gamble
Kurt Malmgren, PhRMA
Frank Messersmith, Skelding, l .abasky, Cony, et al
Roger Mozingo, R .J. Reynolds Tobacco Company
Pete Poynter, BellSouth Telecommunications, Inc .
J . Patrick Rooney, Golden Rule Insurance Company
Ray Thompson, Amoco
Jerry Watson, NABIC
1998 National Chairman's Council

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Officers
Chair
Vice

Speaker Bobby Hogue
Chair Rep . Bonnie Sue Cooper

Members
Sen. Ray Powers
Speaker Harold Brubaker
Sen . William Raggio
Sen. Owen Johnson
Sen . Jim Dunlap
Rep . Dale Van Vyven Victoria Hughes, Charles G . Koch Charitable
Al Auger, Coors Brewing Company Foundation
Joanne Beyer, Allegheny Foundation Victor Porlier, Council on Culture
Ronald F . Scheberle, GTE & Community

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Management
The Executive Director serves as the chief administrator, and directs all the activities of ALEC
according to the policies set by the Board of Directors . In addition, a management team, comprised
of six Department Directors, oversees the program functions of the organization . While most of the
management team is in place, a Director of Development is needed to complete the team .
Candidates for this positioned are being interviewed . Resources permitting, additional support staff
may be needed in Public Affairs, Development, and Policy .

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Management Team
Executive Director
Director of Finance
Director of Membership/Conferences
Director of Policy
Director of Public Affairs
Director of Project Development
Director of Programs
Office Manager/DIS

Duane A . Parde
Beverlee A . Lee
Brad Boutilier
John Shanahan
Noel Card
Roop Mohunlall
Lining Burnet
Denise Winston

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MARKEYANALYSIS
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Market Definition

For 25 years, ALEC has been providing America's conservative state legislators with policy analysis,
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research and model legislation intended to promote the Jeffersonian principles of free markets,
limited government, federalism and individual liberty . Today, ALEC is the nation's largest
individual membership organization of state legislators ; forty percent of all state legislators in
America belong to ALEC.
Strengths
With 3,000 state legislator members from both political parties in all 50 states, joined by 280 private
sector members, ALEC is uniquely positioned as a legislative network that crosses geographic,
political, and economic lines . As a membership/policy organization dealing with state-federal
relations, ALEC's influence reaches into all levels of government and business .
No other organization in America has as many valuable assets, in both people and ideas, in as many
key decision-making positions as does ALEC . Among the leadership of America's state legislatures,
ALEC members have an impressive presence : 48 Speakers and Speaker Pro Tems ; 28 Senate
Presidents and Senate Pro Tems ; 31 Senate Majority and Minority Leaders ; and 41 House Majority
and Minority Leaders . In addition, twelve sitting governors are alumni of ALEC, as are more than
80 Members of Congress .
ALEC is the perfect conduit to advocate policy solutions developed in the states to the national
level . Since its founding in 1973, ALEC has amassed an unmatched record of accomplishing
ground breaking changes in public policy . Why? Because unlike most other think tanks and public
policy institutes, which are largely academic in nature, ALEC members are the decision makers in
their respective states . When ALEC develops policy proposals and model legislation, they are
introduced by our members, laws are passed or repealed, and real change occurs .
Today, ALEC is the most effective delivery mechanism for conservative policy alternatives at the
state level . In this regard, the last complete legislative cycle was by far the most successful in
ALEC's history for its model legislation . The number of bills introduced in the states consistent
with ALEC model legislation totaled 1,647, with 365 achieving enactment, for a success rate of 22
percent .
As we approach a new century, ALEC is positioned to play an even more important role in shaping
our nation's future. Indeed, ALEC's potential is virtually unlimited . Devolution of power from the
federal government to the states is a political reality . Regardless of whether the federal government'
is run by liberals who want to mandate programs to the states, or by conservatives who want to
return control of programs to the states, one thing is clear : The role of state legislators in managrng
the public policy challenges of the 11 st century will only increase .

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Programs and Services
ALEC is the most dynamic public-private partnership in America today . Because ALEC legislative
members are dedicated to economic growth and less government intervention in the marketplace,
they see business as an ally rather than an adversary . With the nation's economic competitiveness
challenged as never before, ALECs public-private partnership, dedicated to encouraging economic
growth, is setting the nation's agenda for the 21 st century .
National Task Forces
ALEC's nine National Task Forces serve as public policy laboratories where model legislation and
policies are discussed and approved for dissemination to legislators across the country . The Task
Forces also commission and publish research, write issue papers, and sponsor workshops at ALEC
meetings . Unique to the Task Forces is their public-private partnership, a synergistic alliance that
identifies issues and then responds with common-sense, results oriented policies . State legislators
welcome their private sector counterparts to the table as equals, which allows both groups to work
in unison developing policies that benefit all Americans . ALEC's nine Task Forces are listed below :
• Civil Justice

• Commerce and Economic Development
• Criminal Justice

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Education
Energy, Environment, Natural Resources and Agriculture
Health and Human Services
Tax and Fiscal Policy

• Telecommunications and Information Technology
• Trade and Transportation

Conferences
ALEC will convene two national conferences in 1998, with workshops on current issues featuring
leading experts, public figures and elected officials . These conferences are a great opportunity for
state legislators and business leaders to meet and exchange ideas and policies that effectively
promote the free enterprise system .

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/ 25th Annual Meeting, August 18-22, Chicago, Illinois
attended by 3,000 state legislators, senior business executives, and renowned
policy experts, the Annual Meeting is the largest gathering of common sense
conservatives held each year.
• States and Nadon Policy Summit, Decem6er 2-5, Washington, DC
Hundreds of newly elected and veteran state lawmakers will meet to be briefed by
experts on the issues facing the country prior to the start of the new legislative
sessions .

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Publications
ALEC's publications are the showcase for innovative and in-depth analyses and policies produced
by ALEC's National Task Forces and members . The issue papers, books and model legislation
provide legislators and policy makers with a comprehensive legislative agenda to advance policies
based on Jeffersonian principles .

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/ FYI
A news magazine published 16 times per year containing news briefs and in-depth
articles on state and national issues . Beginning in 1998, FYI will include conference
pre-registration and member renewal information .
/ The State Factor
White papers on the critical issues facing America's lawmakers . Recent issues
include tort reform, electric utility industry restructuring, and telecommunications
deregulation and taxation .
/ The Source Book ofAmerican State Legislation

Published every other year, the Source Book contains 344 model bills on a wide
range of issues.

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/ Issue Brief.e
Concise briefing papers on 258 key topics .

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/ Issue Analysis
Brief policy analyses on specific issues important to ALEC members .

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/ ALEC Alert
Briefing papers on a critical and timely issue .
/ Legislative Update
Summaries of bill introductions and enactments in the states, by issue
area .

, / Report Cards and Special Studies

State-by-state analysis of critical issues, including crime and education .

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/ ALEC Website
A home page containing issue updates, publications, and a calendar of events .
The website can be reached through the Internet at http ://www .alec .org . ALEC's
website will be expanded and managed in-house in 1998 .
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Resource Center
Members have access to ALEC's Resource Center for information and networking needs . ALEC's
expert staff provide data, research, analysis, model legislation, scholarly articles, reference lists and
expert testimony on a wide spectrum of issues .
Media Relations

ALEC provides its members with a variety of media relations services, including guest
commentaries, news releases, and special announcements . These services encompass :
/ View from the States
Commentaries prepared which discuss a timely issue as part of a special project .
Distributed nationally or to targeted states or regions .
• Media Member Services

News releases for members are routinely prepared and distributed announcing
special awards and appointments, and general news releases on ALEC events .

• News Conferences

ALEC holds a number of news conferences each year either highlighting a policy
issue or event .

/ NET Commentaries
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Weekly three minute television commentaries on important state and national issues
featuring ALEC members and staff.

/ Talk Radio Outreach
Outreach project to talk radio, including an Annual Meeting Radiothon .

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Internet PrQjects
Beginning in 1998, ALEC will greatly expand its Internet capabilities, thereby making our

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to more than 60 million Internet users in the United States . This will not only widen accessibility
to ALEC activities geometrically, but also allow for updates and additions to our publications

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publications, special reports, Task Force schedules, and conference information instantly available

throughout the year in a timely and cost efficient basis . We will also expand our e-mail and fax
back services to improve our ability to deliver information electronically at reduced costs .

To accomplish this goal, ALEC must make major investments in Internet infrastructure and
consulting to develop and maintain its website . This investment will not only create short-term
savings in printing, publication and postage costs, but will also reap significant savings in the future .
We will be working with our members in the telecommunications and information technology
industry to develop our Internet projects.

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The goals for this program in 1998 include :
1) The development and maintenance of an ALEC in-house website by the end of the year .
2) The Source Book of American State Legislation will be instantly accessible to the
public through the ALEC website or through the Heartland Institute's PolicyFax system
(which would be linked with the ALEC website) . The Source Book would cease to
be published as a book, offering savings of approximately $85,000 over the normal
2-year publishing cycle . In addition, with Issue Briefs on the website it would preclude ever
publishing this in book form again . All ALEC publications and policy 'statements could be
updated instantly .
The majority of state legislatures are now connected with the Internet . ALEC members, or
interested parties, will be able to receive information electronically directly from their offices at
the push of a button . Among other services, as the Internet project develops we will add dedicated
web pages for conference information and Task Force activities .

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MISSION and GOALS
The mission of the American Legislative Exchange Council is to advance the Jeffersonian principles
of free markets, limited government, federalism, and individual liberty among Americq's state
legislators.
Goals
1998 marks ALEC's 25th Anniversary . Throughout the year, ALEC will grow as a highly visible
organization recognized as the nation's premiere non-partisan, public-private membership
association of conservative state legislators and America's leading corporations, associations and
foundations . We will have hosted two successful major national conferences, conducted more than
20 productive Task Force meetings, hosted 2 national issue summits, published 25 policy papers,
reports and issue updates, implemented a pilot program to improve member services by creating
leadership teams in five states, and vastly expanded our .Interrtet communications program and
media relations operations . We also will have increased revenue, met our financial obligations, and
placed the organization in a positive financial position for future growth and expansion .
Objectives and Strategies
To meet these goals, the following objectives and strategies need to be achieved by December 31,
1998 . The means to achieve these objectives and strategies are presented in the 1998 budget, and
are identified by a corresponding business plan (BP) number .

A . Development . Develop and maintain revenue streams to support the budgeted activities
of ALEC, and provide resources for future growth .
A 1 . Increase the private sector member base by 40 corporate and foundation supporters .
A2. Identify foundations to support projects that are essential to the furtherance of
ALEC's mission,
A3. Work with ALEC leaders, Task Forces and utilize conferences to attract new
private sector members .
A4 . Work with ALEC members and staff to identify new fund raising opportunities .
A5. Increase corporate member base by targeting companies that are active in other
state government affairs organizations, but not ALEC .

A6 . Increase the corporate donor base by networking through existing member trade
associations .
A7 . Add additional professional and support staff in Development to improve
ALEC's fund raising potential .
B. Public Affairs . Conduct an on-going communications program that integrates all
departments of ALEC to promote policies based on Jeffersonian principles among
elected officials, the private sector, and the general public, and ALEC's institutional goals
and objectives .

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B 1 . Increase the size and scope of FYI by expanding the standard page count from 16
to 24 pages, increasing the numbei of editions from .12 to 16, increasing advertising
revenue to meet budgeted parameters, and including conference pre-registration
sections and member renewals in the publication .
B2 . Expand the publications fulfillment service to generate more subscriptions and
promote ALEC's visibility .

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projects for meetings and conferences, special events and member services, and
proactive/general media campaigns.

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B3 . Maximize media outreach through a comprehensive media relations operation, media

B4 . Develop a communications program using the Internet, e-mail, and fax back services
to greatly expand ALEC's ability to deliver information electronically at a reduced
cost (i .e., Source Book) .
B5 . Create and maintain an ALEC website in-house .
B6. Write speeches, talking points, and scripts for ALEC events which effectively
communicate ALEC's mission and policies.
B7 . Develop video productions to provide promotional and policy information to
members and prospects at meetings and events, including the 25th Annual Meeting,
States and Nations Policy Summit, and a special video "Serving America's State
Legislators ."
B8 . Manage general printing operations to achieve cost savings .

C. Membershin . Enlist state legislators from all parties and members of the private sector
who share ALEC's mission .
Cl . Recruit and enlist state legislators that share ALEC's Mission .
C2. Develop and provide services to ALEC members, including managing state
scholarship accounts, maintaining accurate member rosters, scheduling membership
events, generating attendance and participation in ALEC events, and promoting the
benefits of belonging to the organization .

C3 . Continue to enhance the quality, accuracy, and flexibility of the database in order to
provide improved services in terms of generating and maintaining current data on
the status of members, dues, and addresses .
C4 . Develop and utilize demographic and related survey responses to provide
improved services .
C5 . Create leadership teams in 5 states to improve member services and enhance
leadership opportunities .
C6. Develop and enhance the capability of communicating with/and among the
Board, the State Chairs, Task Forces, and individual members.
C7. Implement an alumni membership program and enhance communications with those
who hold elected offices, including Members of Congress and governors, to improve
ALEC's visibility .
C8. Work with the State Chairs and ALEC Development staff to recruit/retain private
sector members (2 new per state) .

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D. Task Forces. Conduct a policy making program that unites members of the public and
private sectors in a dynamic partnership to support research, policy development, and
dissemination activities, and prepare the next generation of political leadership through
educational programs on the principles of Jeffersonian democracy .
Dl . Ensure that each Task Force holds productive meetings, with an average of 20
legislators attending each meeting .
D2 . Identify key issues that are not addressed in current model legislation or policy
statements and work with the appropriate Task Force to ensure that such issues are
addressed during the year's meetings and appropriate positions are ultimately
adopted on the issues .
D3 . Work with members to identify 2-3 major issues per Task Force and develop
comprehensive educational projects, and work to ensure funding for the projects .
D4 . Ensure that Task Force staff are knowledgeable in their respective issue areas, able
to respond to member requests, participate in media events, give speeches, testify at
legislative hearings and prepare substantive articles and papers as part of ALEC's
communications program . Become the nation's best source of information on the
status of state laws and bills relating to the major issues in the projects .
D5 . Develop and approve Operating Budgets and drafts of the Programming Budgets
during each Task Force's summer meeting, and finalize the plans early each fall,
D6 . Work with Task Force members and with the Development Department to recruit
and maintain private sector members (5 new per Task Force) .
D7 . Work with the members and Membership Department to identify effective
legislators who are currently not on Task Forces and follow proper procedures to get
them nominated and appointed to a Task Force .

D8 . Ensure adherence to the Task Force Operating Procedures, particularly with regard

to Chairman and Executive Committee responsibilities, membership requirements,
and meeting procedures . Educate members on the Procedures .

E. Conferences . Plan and conduct substantive, well attended meetings and conferences

which will promote ALEC's mission, and make a positive financial contribution to the
organization.

El . Implement a zero-based budget system for all meetings and conferences, with
a goal of operating quality events with at least a net positive margin of 15% .
E2 . Act as the central meeting and conference booking agent for all travel and
accommodations to obtain maximum discounts and cost savings .
E3 . Create and maintain a master calendar of events/activities to facilitate early
planning for events, and ensure that dates for ALEC events do not conflict with

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those of other state organizations .
E4 . Develop and implement sufficient internal and external controls to ensure that
all cost centers are on budget and are being tracked for use in on-going and
future meeting planning and budget projections .

E5 . Work with the Illinois Host Committee and Development staff to recruit new
members and sponsors for the 25th Annual Meeting .
E6 . Work to ensure maximum attendance/registration at ALEC conferences and events
in order to meet budgeted parameters.
E7 . Conduct a successful marketing campaign to ensure that exhibitors participate in
ALEC conferences and events in order to meet budgeted parameters .

E8. Assist the Membership Department and Task Forces in planning and completing
effective and fiscally prudent state and/or regional Focus Events to enhance
membership recruitment/retention and in promoting ALEC policy initiatives .
F . General & Administrative . Implement an internal financial control and reporting system
that obtains certainty in expenditures, and provides timely and accurate information to
management to enhance their decision making ability .
Fl . Develop and maintain programmatic annual budgets .
F2 . Develop and maintain monthly budget performance reports which show how every
department is meeting its financial targets.
F3 . Work with the Board of Directors and the National Chairman's Council in
managing ALEC's financial operations .
F4 . Continue to integrate and maintain ALEC's budget and accounting systems .
F5 . Maintain a system of financial controls, including a purchase order system (P .O.),
that obligates funds against budget and informs management of purchases before
funds are obligated .
F6 . Manage ALEC's finances in a prudent manner to generate interest income .
F7 . Follow amortization/payment schedules to meet all outstanding loan obligations .
F8 . Develop and maintain a cumulative cash contribution analysis .

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DEVELOPMENT PLAN
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ALEC enjoys a good reputation in policy development, member services, and in hosting productive,
well-organized meetings and conferences . We fully intend to continue this trend, and leverage
ALEC's strengths to recruit new members, and maintain a strong base of support for the
organization .
In 1998, we will undertake an aggressive private sector membership recruitment/retention campaign .
Expanding the private sector membership base is critical for two reasons : (1) to ensure that the
views of a broad spectrum of the business community and concerned foundations are expressed
during policy development deliberations ; and (2) financial stability for the organization . With a
current private sector membership base of more than 280 corporations and foundations, there is
tremendous potential for ALEC to recruit new private sector members among Fortune 500
companies and foundations with policy concerns at the state level .
Leadership Teams

In addition to recruiting new private sector members, we also plan to undertake a special pilot
program in five states in 1998 to enhance the services and leadership opportunities provided to
ALEC's public sector members . The concept for this plan, called State Leadership Teams, is to
provide a cadre of members in selected states to advance ALEC's Mission by :

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1) Providing a structure for ALEC members to be effective advocates through improved
communications and educational programs .

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2) Establishing a mechanism for recruiting, organizing, and training ALEC members
to be future leaders in an era of term limits.

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3) Enhancing ALEC's leadership structure in the states .

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The Leadership Teams would be comprised of 7 to 10 members in each state . The teams would
consist of the ALEC State Chair, a Membership and Meetings Coordinator, the Private Sector State
Chair, a Legislative Policy Coordinator, a member of House Leadership, a member of Senate
Leadership, a Public Affairs Coordinator, and an ALEC Board member, if applicable .
Preliminary work on establishing Leadership Teams has been undertaken in California, Michigan,
and Oklahoma . In addition to these states, we plan to add Ohio and Colorado to the list of states
for establishing Leadership Teams in 1998 . The five states identified for this pilot project in 1998
are : affected by terms limits ; the percentage of legislators that belong to ALEC in each state is at
or above the national average ; have a Board member in each state ; and ALEC members hold key
leadership positions in the respective legislatures . A more detailed description of the Leadership
Team plan is provided on page 20 .

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Private Sector Development Plan
ALEC's private sector development plan is geared to enhance, promote, and support the fact that the
policy decisions that impact the economy and lives of all Americans are increasingly being made
at the state level, and that ALEC provides free market oriented state legislators and the private
sector a unique forum to work together to solve the complex challenges facing the states and the
nation.
The goal of the development plan this year is to increase by 40 the number of corporate and
foundation members/supporters of ALEC . In this connection, we have implemented a five-step
approach to maintain and expand the membership base . This effort covers : Member
Retention/Renewal ; New Member Recruitment ; 25th Anniversary Campaign ; Foundations ; and
New Policy initiatives .
1) Member Retention/Renewal . ALEC currently enjoys a private sector membership base
of 280 companies and foundations . These companies are being contacted with regard to
renewing their membership, and other sponsorship opportunities . The response rate to
this effort has been positive .
2) New Member Recruitment . A campaign to recruit new private sector members using the
Task Forces as recruitment vehicles will be launched, as well as a program to enlist the
support of the State Chairmen in identifying and recruiting new members .
∎ Task Forces . We are promoting the activities of the Task Forces to potential new
members along industry lines and issue areas . As such, we are working with the
members of each Task Force to identify prospective members and invite them to
attend a Task Force meeting or related events . The goal in this effort is to attract
5 new private sector members per Task Force .
∎ State Chairs . Membership information, complete with target lists of prospective
private sector members has been distributed to all the State Chairmen . The goal of
the State Chairmen's effort is for each state to recruit 2 new private sector members,
or 100 overall .

∎ Prospects. 50 companies have been identified that are active in other state legislative
organizations, but not in ALEC . Given the demonstrated interest of these companies

in state affairs, this group represents an ideal class of candidates for membership in

ALEC . Efforts to expand our private sector member base by networking through

existing member trade associations will also continue .

3) 25th Anniversarv . ALEC has an excellent opportunity to utilize its 25th anniversary, as well
as the approaching new millennium, as an opportunity to raise financial support not only for
the Annual Meeting, but for long-term institutional improvements and information

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management modernization . Therefore, we have developed a three year fund raising
concept based on securing financial gifts of $25,000 each from key prospects, and to increase
the overall contribution level of current donors to $25,000 in general support, or unrestricted
donations . This plan, The 25th Anniversary Plan for the 21s9 Century, is outlined on the
following page .
4) New Policy Initiatives . We have undertaken efforts to increase private sector participation
in ALEC through new policy projects . For example, we currently plan to host a special
summit on Public Pension Fund Reform in February of 1998, as well as a series of special
focus events on electric industry restructuring during the 1998 legislative sessions .
5) Foundations . ALEC currently receives financial support from 17 foundations . These
resources are important to support policy projects that are essential to ALEC's mission . For
1998, we have prepared grant requests to support activities in connection with the Education
Task Force, the Balanced Budget Amendment, welfare reform, and labor issues . We will
also work closely with members of the National Chairman's Council on securing increased
participation and support from foundations . ALEC's improved financial condition should
also improve our ability to approach foundations for financial support .

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The 25th Anniversary Plan for the 21st Century
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Concept

ALEC has an excellent opportunity to utilize its 25th anniversary, and the approaching millennium,
as an opportunity to raise financial support for needed capital improvements, information
management modernization, and long-term growth . Therefore, we have developed a three-year fund
raising plan based on securing gifts of $25,000 each from key prospects, and a strategy to increase

the contribution level of current donors to at least the $25,000 per year in general support, or
unrestricted donations.'

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For new and current private sector members, an annual general support contribution of $25,000 will
cover a "season pass" of special benefits, including membership at the Washington Club level,
program support and a voting position on a Task Force, and sponsorship of the Annual Meeting and
the States and Nation Policy Summit at the Director's level . Financial investments in other specific
events, projects, or general support contributions at different levels would be recognized according
to the current parameters . This fund raising endeavor will start on January 1, 1998 and conclude
on December 31, 2000 .

∎

Plan
ALEC will contact current and prospective members by industry and issues, as well as foundations
' and individual donors that may have an interest in investing in the organization . We will also recruit
legislative and private sector volunteers to help make presentations to interested parties . The 1998
Annual Meeting in Chicago will mark the first major event milestone in the fund raising effort, with
' the States and Nation Policy Summit in December marking the second target . Marketing brochures
and videos will be specially prepared to facilitate the campaign .
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Time line
∎ December 2, 1997 . Presentation of the concept to the National Chairman's Council .
∎ December 3, 1997 . Presentation of the concept to the Board of Directors .
∎ December 3, 1997 to January 31, 1998 . Selection of Campaign Chairman and staff to
further develop and implement the plan .
∎ February 1 to August 23, 1998 . Implementation of Phase I of the Campaign (25th Annual
Meeting).

∎ August 23 to December 6, 1998 . Implementation of Phase II of the Campaign (States and
Nation Policy Summit).

∎ December 7, 1998 to December 31, 2000 . Implementation of Phases III-IV of the .
Campaign,

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• 45 uxporations and foundations currently contribute
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$25,000 or more overall to ALEC annually .

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State Leadership Teams
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I. Concept
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A special pilot project, called State Leadership Teams, has been developed for implementation in
five states in 1998 to enhance the level of services and leadership opportunities provided to ALEC
public sector members . The State Leadership Teams would be composed of 7 to 10 members in
each state . The purpose of the project is to provide a cadre of members to advance the ALEC
Mission by :

1) Providing a structure for ALEC members to be effective advocates through improved
communications and educational programs .

2) Establishing a mechanism for recruiting, organizing, and training ALEC members
to be future leaders in their states in a era of term limits .
3) Enhancing ALEC's leadership infrastructure in the states .

II. Proposed Pilot States
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ii= Term Limits % ALEC Members
California

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Yes/No

Yes

46%

Yes/Yes

Oklahoma

Yes

41%

Yes/Yes

Ohio

Yes

46%

Yes

73%

Yes/No

Yes/No

(' ALEC members serve in legislative leadership positions ; current governor is a former ALEC member .)
III . Formation

The State Leadership Teams will be composed of the following :
1 . The ALEC State Chair (and/or Vice Chair) is the head of the Leadership Team and is to
maintain liaison with the public sector members and the ALEC Executive Director, and
sponsor at least one public sector event each year .
2. Membership & Meetings Coordinator. To assist the State Chair and ALEC Membership

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30%

Michigan

Colorado
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Yes

Leaders/Governor •

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staff in recruitment and retention of members, and to manage state delegation room blocks
and related matters regarding ALEC events .
3 . Private Sector State Chair(s) . To maintain liaison with private sector members and ALEC
Development staff, and manage at least one private sector membership event each year .
4 . Legislative/Policy Coordinator . To serve as a liaison with members of ALEC Task Forces
in the state and ALEC Policy staff, and coordinate educational campaigns . In addition, the
incumbent will prepare periodic synopsis of Task Force issues/activities in the state for
distribution to appropriate ALEC members and staff.
5 . House Leadership member . To serve as a link with ALEC members and staff on issues that
may relate to ALEC activities/events .

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6 . Senate Leadership member . To serve as a link with ALEC members and staff on issues that
may relate to ALEC activities/events .

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7. Public Affairs Coordinator . To coordinate the release of ALEC information at the state
level in consultation with the State Chair and ALEC Public Affairs staff The incumbent
would also serve as a point of contact to ALEC to identify individuals or issues that may
warrant more exposure to ALEC in general .

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8 . ALEC Board member (if applicable) . The Board member will serve as a liaison with the
ALEC Board of Directors and the Leadership Team . If there is no Board member in a state,
then the State Chair may assume this function .
IV. Implementation
Implementation of the program will require a number of measures, which have been incorporated
in the 1998 budget . First, there will be an on-site meeting with each Leadership Team during the
first quarter of 1998. The meeting will serve to organize the Leadership Team, and identify issues
worthy of attention in 1998 . This could be followed by special Focus Events or similar activities
relevant to the issue(s) of concern . Such measures may include special public relations programs
to advocate ALEC's policy positions, and to provide greater visibility for members of the Leadership
Team .
Follow-up meetings will be required throughout the year in each state to consolidate either the
formation of the Leadership Teams or a policy issue . Also, this can serve as means to generate
greater expertise among ALEC members on key issues, which they can then address at ALEC
conferences . This can result in giving members of the Leadership Teams national exposure on the
issues at hand . As part of this program, dedicated scholarship funds would be provided to the
Leadership Teams for attendance at the Annual Meeting and States and Nation Policy Summit, with
the subsequent exposure, educational opportunities, and speaking opportunities .

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National Membership Levels and Benefits
MEMBERSHIP $5,000
240 Members.
ALEC members receive :
All publications

Annual Recognition in FYI magazine
Three contacts on Mailing List

Task Force Qualification Status
Member Discount Registration at ALEC Annual Meeting
Discount on Exhibit Booth at ALEC conferences

WASHINGTON CLUB $10,000
8 Members .
Washin¢ton Club members receive :
All publications
Task Force Qualification Status
Three contacts on Mailing List
Annual Recognition in FYI magazine
10"/o Discount Above and Beyond Member Registration Fee at All ALEC Meetings
Discount on Exhibit Booth at ALEC conferences

FRANKLIN CLUB $15,000
6 Members .
Franklin Club members receive :
All publications
Task Force Qualification Status
Three contacts on Mailing List
Annual Recognition in FYI magazine
Discount on Exhibit Booth at All Meetings
VIP photo opportunities at ALEC meetings
15% Discount Above and Beyond Member Registration Fee at All Meetings

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MADISON CLUB $25,000
17 Members.
Madison Club members receive :
All publications
Task Force Qualification Status
Three contacts on Mailing List
2 Task Force Voting Memberships

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Discount on Exhibit Booth at conferences
VIP photo opportunities at ALEC meetings
25% Discount Above and Beyond Member Registration Fee at All ALEC Meetings
Annual Recognition in FYI magazine
Discount Advertising Rates in FYI magazine
One Head Table Seating at Annual Meeting
Reserved Table Seating for five people at all ALEC conferences

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JEFFERSON CLUB $50,000
10 Members .

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Jefferson Club members receive :
All publications

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Task Force Qualification Status
Three contacts on Mailing List
2 Task Force Voting Memberships

Discount on Exhibit Booth at ALEC conferences
VIP
nhntn nnnnrhinitirc ot Ai F(~ nva.nte
__ _r___ _rr, . . ._. . . . ._ . . . . . . .. ._,_, .. . .. .,...

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50% Discount Above and Beyond Member Registration Fee at All ALEC Meetings
Annual Recognition in FYI magazine
Discount Advertising Rates in FYI magazine
One Head Table Seating at Annual Meeting
Reserved Table Seating at all events
Special Recognition at All Conference Events under Organization's name

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1998 Annual Meeting Host Committee Member
Contributions and Benefits
$30,000 Host Committee Chair

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VIP Host Committee Reception with members of ALEC's Board of Directors
Listed as Co-Sponsor of Selected Special Events
Full recognition in the Annual Meeting program as Host Committee Chair
Work closely with National ALEC Leadership on Annual Meeting Planning
Three complimentary registrations
VIP photo opportunities with dignitaries
Head table seating at an appropriate event
Input into workshop topics and speakers
Complimentary Membership (for non-members)

$20,000 Host Committee Vice Chair
VIP Host Committee Reception with members of ALEC's Board of Directors
Listed as Co-Sponsor of Selected Special Events
Full recognition in the Annual Meeting program as Host Committee Vice Chair
Two complimentary registrations
VIP photo opportunities with dignitaries
Head table seating at an appropriate event
Complimentary Membership (for non-members)

$10,000 Host Committee President
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VIP Host Committee Reception with members of ALEC's Board of Directors
Full recognition in the Annual Meeting program as Host Committee President
One complimentary registration
Complimentary Membership (for non-members)

$5,000 Host Committee Director
Full recognition in the Annual Meeting program as Host Committee Director
Complimentary Membership (for non-members)
Eligibility to serve on any of ALEC's Task Forces
Entitled to full use of ALEC's networking and research facilities
Receive all of ALEC's publications

$2,500 Host Committee Trustee
Full recognition in the Annual Meeting program as Host Committee Trustee
Receive all of ALEC's publications

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FINANCIAL PLAN
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Maximizing our financial resources through sound investment strategies, and implementing
procedures to manage revenue and expenses according to budgeted parameters is the goal of
ALEC's financial plan for 1998 .
Budget & Accounting System
In support of the business plan and budget, staff will continue developing improvements to ALEC's
accounting system . ALEC's financial reporting system provides a detailed accounting of revenue
and expenses in total and by each department, including breakdowns by functional areas . On a
monthly basis, the Finance Department will provide management and members of the Board with
financial statements that include monthly actuals compared to monthly budget projections, with
dollar and percent variances . This information will also be provided in graphs for visual
comparisons .
The 1998 budget and accounting systems have been fully integrated with the Business Plan . We are
confident that this new system will provide management and members of the Board with complete
and accurate financial information in a timely manner.
Balance Sheet
Entering 1998, ALEC's unaudited balance sheet is currently estimated to reflect $1,727,890 in
current assets, including cash of $1,300,000, and $1,266,357 in current liabilities, including
accounts payable of $600,000, state scholarships of $368,546, a line of credit for $150,000, and the
current portion of certain equipment lease obligations totaling $72,000 . The long-term liabilities
total $700,000 and include $440,000 to the Koch Foundation, $70,000 to the Tax Education Support
Organization, deferred rent liability of $92,000, and the non-current portion of certain equipment
lease obligations, totaling $72,000 .
ALEC's net asset figure (fund balance) as of December 31, 1997 is currently estimated at a positive
$50,000 . If this proves out, we will have completely erased the $540,000 deficit that ALEC carried
over from the previous three fiscal years, and will begin 1998 in a positive financial position .
With a projected excess of revenue over expenses budgeted for the year ending December 31, 1998
of $390,000, ALEC will end 1998 with positive net assets (fund balance) of approximately
$440,000 .
During fiscal year 1998, ALEC will continue to make monthly principle payments of $5,000 to the
Koch Foundation, $2,000 to the Tax Education Support Organization, approximately $6,000 for'
various equipment leases, and will retire the $150,000 line of credit in February . The loans from
the Koch Foundation and the Tax Education Support Organization will come due in calendar year
1998 . In addition, ALEC will attempt to repay $200,000 during the year to the state scholarship
account that will be due as of December 31, 1997 .

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In an effort to enhance ALEC's ability to effectively manage cash flow, the Finance Department will
prepare monthly cash flow statements that reflect cash inflows and outflows, including debt
payments. This statement will present the amount of cash in the bank at the beginning of the month,
the net increase or decrease during the month, and the cash in the bank at the end of the month .
Controls
In 1998, ALEC will continue to maintain a series of strict internal controls and reporting systems
to obtain certainty in expenditures, and inform management of proposed expenditures before funds
are obligated according to budgeted parameters .
In this regard, a purchase order (P .O.) system will continue to be used by staff for all purchases . All
purchase orders are coded by function and tied directly to the budget . Department directors have
the authority within their budgets to approve purchases and expenses of $200 or less . Items over
$200 require advance approval of the Executive Director . A similar system has been implemented
for all travel and meeting expenses . In addition, monthly reports will be distributed to department
directors to review their budget to actual figures, complete with variances . A list of internal control
measures is provided below .

Internal Expense Controls

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∎ Purchase Order
To purchase office supplies and equipment from office supply stores and/or services from
approved outside vendors .

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∎ Expense Request Form

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∎ Check Request Form

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To request overnight mailings, courier services and conference calls .

To receive reimbursements of out-of-pocket expenses ; pay for equipment and services that

cannot be purchased with a P .O . form (such as postage checks for mass mailings) ; and travel
expenses.

∎ Travel Request Form

All travel must be pre-approved before flights, hotel and car rentals can be confirmed .
Benefits of the American Express Rewards Program are used to the extent possible for
member and staff travel .

∎ Petty Cash Form
For reimbursements of allowable out-of-pocket expenses, such as taxi cab fares, small
emergency purchases, etc .
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1998 Budget Summary

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For 1998, total revenue for ALEC is estimated at $6,543,822 . Total expenditures are projected at
$6,152,214, for an excess of revenue over expenses of $391,608 . (For 1997, total revenue was
estimated at $5,794,432, and total expenses at $5,317,983 .16.)

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Operating Revenue
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General & Administrative . Total revenue for this category is estimated at $36,000 . This amount

will be received through $30,000 in interest income from CDs and the repurchase account . In

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addition, $6,000 will be received through refunds and reimbursements .

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Development . Total revenue for Development is estimated at $1 .9 million . This amount will be
received from private sector membership dues and foundation grants .

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Public Affairs . Total revenue for Public Affairs is estimated at $12,000 . This amount will be
received through publication sales of $6,000, and $6,000 in advertising sales in FYI .

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Membershio . Total revenue for Membership is estimated at $480,000 . This amount will be
received through $300,000 in state scholarship contributions, which are segregated in separate
accounts and directly offset in expenses, $150,000 to sponsor the Leadership Teams project, and
$30,000 in legislative membership dues .
Task Forces . Total revenue for Task Forces is estimated at $1,000,822 . This amount will be
received through $391,500 in Task Force operating dues, $441,822 and programming fees, and
$167,500 in foundation grants .
Conferences . Total revenue for Conferences is estimated at $3,105,000 . This amount will be
received from $2,525,000 in total revenue for the Annual Meeting, and $580,000 in total revenue
for the States and Nation Policy Summit.
Board of Directors . Total revenue for this category is estimated at $10,000 . This amount will be
received from financial support for the Federalism Committee .

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Operating Expenses
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General & Administrative . Total expenses for this category is estimated at $502,356 . This amount
includes $43,967 in interest payments on loans from the Tax Education Support Organization, the .
Koch Foundation, and the line of credit and leases for office equipment . In addition, $9,000 has

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been allocated this year for staff training and education programs . Indirect overhead and salary and
benefits has been budgeted at $55,200 and $394,188, respectively . During 1998, we anticipate
allocating $690,000 in overhead to ALEC's various departments . The allocation is based on a ratio
of departmental direct expenses to total expenses of the organization .

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Development . Total expenses for Development is estimated at $390,973 . This amount includes
$9,000 in registration and membership dues, $32,000 in travel and related expenses, and $30,000
in development related publications . Salaries, taxes and benefits, and overhead total $319,973,
which includes funding for one new full time employee .

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Public Affairs. Total expenses for Public Affairs is estimated at $839,873 . This amount includes
$258,500 in various printing and publications, $75,000 in media relations, $70,000 for the NET
television commentaries program, and $95,000 for ALEC's new Internet project . Salaries, taxes and
benefits, and overhead expenses total $341,373, which includes funding for one new full time
employee .

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Membershin . Total expenses for Membership is estimated at $565,138 . This amount includes
$300,000 in state scholarship account expenses, and $78,390 in legislative membership
recruitment/renewal activities . Salaries, taxes and benefits, and overhead expenses total $186,748 .

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Task Forces . Total expenses for the Task Forces is estimated at $1,457,868 . This amount includes
$341,192 for Task Force meeting expenses, $103,600 in issue summit/focus event expenses, $38,961
in publications, $41,360 in legislative updates, $20,249 in resource center materials, $57,003 in
programs, and $46,320 in grant related project expenses . Salaries, taxes and benefits, and overhead
expenses total $809,183, which includes funding for one new full time employee .

Conferences . Total expenses for Conferences is estimated at $2,333,906 . This amount includes
$1,550,400 in total expenses for the Annual Meeting, $403,800 for the States and Nation Policy
Summit, and $11,250 in expenses for site visit meetings . Salaries, taxes and benefits, and overhead
expenses total $368,456 .

, Board of Directors. Total expenses for this category is estimated at $62,100 . This amount includes
expenses for three full Board meetings, one Executive Committee meeting, and two National
' Chairman's Council meetings .

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