GFOA’S 2024 conference attendees assemble for a plenary session. (Photo: GFOA)

An Egalitarian Membership Model

Facing the AI Challenge

For most people, the inner workings of government finance are about as interesting as their dishwasher’s owner’s manual. But it’s safe to say that none of the various national associations of public service professionals has had a broader impact on a core function of society — the nurturing and protection of the public purse — than the Government Finance Officers Association (GFOA) . Getting the money right enables everything else.Long recognized as a powerhouse of professionalism, as GFOA advances well into its second century its leaders are moving with admirable determination to position it for the challenges to come, not least of them the impact of artificial intelligence on everything from budgets and staffing to financial reporting and pension operations. Founded in 1906 in Chicago as the National Association of Comptrollers and Accounting Officers, then in the early 1930s renamed the Municipal Finance Officers Association, in 1984 it rebranded itself with its current title. GFOA’s membership includes U.S. and Canadian public finance professionals, most of them from local governments and agencies but also including state and provincial financiers. It’s a nonpartisan organization with a lean and skilled staff operating in Chicago and a legislative office in Washington, D.C.Historically, GFOA was centered mostly on governmental accounting practices in the Chicago office, with the D.C. office focused on research, the municipal bond market and tax rules. Its purview expanded significantly, into budgeting and treasury management, in the mid-1980s, spinning out publications and best practices developed by a cadre of specialized member committees supported by expert staffers recruited from their respective technical fields, unlike many of the other membership organizations run by generic association management types. GFOA’s staff has worked collaboratively with other associations on pensions, procurement, management development and school finances: They play well with others.Before the Internet took hold, GFOA’s technical prowess in print publications was a key revenue driver along with its big annual conferences and field training seminars. Dues were paid by the governmental jurisdictions, which supported print-and-mail newsletters and a limited staff budget. Its annual conferences have always been a money-maker, as scores of vendors (now some 200) rent spaces in the exhibit halls to pitch their wares to several thousand attendees during breaks between educational sessions.GFOA has never stooped to selling endorsements, instead promoting active and fair competition for the public’s financial business. It has collected exhibition fees and conference sponsorships but never sold out to commercial interests who have always been kept on the sidelines, without board seats or voting rights in its nonpartisan work. Over the last 20 years, GFOA’s board has wisely channeled some of the cornucopia from exhibitor fees and private contributions into a generous and robust college scholarship program in the public service sphere.It wasn’t always this flush. After working in local government for a decade, I joined the GFOA staff in mid-1982 with big dreams of launching a treasury management newsletter, writing the authoritative guide to investing public funds, and modernizing the profession’s approach to budget documents. The economy was still in the second slump of a double-dip recession. No sooner had I arrived in Chicago than selected staff members were informed privately that there was only enough cash in the till to cover the next payroll. Imagine the shock and irony we then felt — that this citadel of public finance was nearly on the brink of insolvency. Those of us newly on staff (some had just relocated their families) quickly scrambled to find new entrepreneurial ways to generate revenues to pay the rent and salaries — and we did.Most members were oblivious to the association’s true financial condition back then. Subsequently, under the deliberative and fittingly frugal leadership of Executive Director Jeff Esser, the staff team scraped through a brief period of parsimony. Better internal budgeting and expense controls, increased conference attendance, and revenue generated by expanded publications and new technical courses thence provided the fiscal formula to flourish. Fortunately the national economy recovered and expanded, which helped fuel the pent-up demand for GFOA’s brand of expertise.The GFOA board and its executive team have since striven for four decades to build a fortress balance sheet and an all-weather budget model to withstand economic cycles and to recruit and retain a skilled and expert staff. Nowadays that includes a unique sidecar endowment to fulfill its public purpose and assure budgetary continuity, with an independent capacity for foresighted research and capital investments. Even the COVID-19-era shutdown of members’ conference travel in 2021 (and the ensuing revenue hit that crushed many nonprofits) did not interrupt GFOA’s ongoing educational and public policy operations or weaken its financial capacity.What has gone largely unnoticed in this metamorphosis in recent years has been the past and present leadership teams’ ongoing strategic moves to broaden the membership base and provide both motivation and intellectual leadership to the unheralded financial folks who usually toil quietly behind the scenes in state and local government offices. It turns out that many of GFOA’s members (a majority now women) have been rising through the ranks to become city managers and senior executives of their respective local governments and state agencies. GFOA has made a point of preparing many well-qualified members for such advancement while building out its national corps of trained, competent financial practitioners.If you read the bimonthly Government Finance Review , still mailed out as a print publication with advertisers to defray its cost, you’ll find a bevy of articles on management and leadership, decision-making strategy, and public policy concepts that were rarely mentioned in these circles 20 years ago, although staff did ask me to write a commemorative article on the profession’s future for GFOA’s 100th anniversary.GFOA’s efforts to promote financial foundations for member communities are inspirational and aspirational, not green-eyeshade technical. There, the credit largely goes to Chris Morrill , the current executive director, who was himself a finance officer and a city manager in Virginia before taking the helm when Esser retired in 2017. Morrill’s top team has made a real mark in “ rethinking ” conventional wisdom, obsolete traditions and the profession’s stereotypically finance geek-focused career paradigm.Besides his internal leadership, strategic insights, prominent social media presence and successful outreach to other professions, Morrill’s most noticeable contribution of late is the association’s forthcoming new membership model . When I worked on staff there in the 1980s, there were about 3,500 member jurisdictions. The active individual membership roster was about double that number.Back then, the cost of printing and mailing newsletters, legislative updates and technical bulletins to each person was the confining fiscal factor. What GFOA leadership figured out over the years — and has taken to new heights now that many services are digital — is that the net marginal cost of adding more individuals to the membership is close to zero when you consider the new revenues they bring with them for online services As a result, GFOA’s membership has grown dramatically in this century, to some 25,000 — and become far more diverse. Junior accountants, budget analysts and payroll supervisors can get just as much access to technical training as chief financial officers. GFOA members can all climb the same stairway of career accomplishment, achievement and fulfillment, regardless of their starting point.This deepening of its roots has become increasingly important as the profession becomes more complex and baby boomers retire from long careers. Whether it’s backfilling senior positions with internal staff or recruiting from elsewhere, there’s now a growing talent pool with the necessary grooming to step up the career staircase. That’s been the big-tent genius of the Morrill era, in building out the profession at both the top and the bottom — and infusing GFOA values, principles and insights right into members’ staff meetings back home. It’s with these factors in mind that GFOA will soon allow unlimited numbers of staff members to join from each jurisdiction.As wonderful as all that egalitarianism may be, technology now brings state and local government office workers to a critical crossroads: GFOA and other white-collar professional associations will face their next big challenge from the disruption caused by artificial intelligence. Nobody wants to become AI roadkill, as new college graduates will soon enter the workforce fully AI literate and technology may both facilitate and compel shrinking headcounts in larger jurisdictions. For smaller organizations, AI may eventually prove to be a welcome productivity booster and force multiplier for skinny staffs; in larger departments, some already fear the specter of a white-collar bloodbath in coming years.To their credit, the GFOA management team is already probing its membership to learn what specific kinds of AI training practitioners need and want to see. It’s fair bet that they will extend their online and in-person training sessions to include AI applications as the technology becomes sufficiently reliable to be usable for more than just simple information gathering and document drafting. A new financial AI proficiency certification process could follow, if members and employers ultimately find value in that. Don’t be surprised if their staff also partners with other professional associations to deliver timely training in common administrative and management functions to leverage GFOA’s solid platform for midcareer technical education most cost-effectively.Of course, GFOA faces its own AI quandaries internally. Will its popular accounting and financial management training curriculum and its revered awards programs for budget documents and annual financial reports someday be delivered mostly by bots? How will it balance high-tech and high-touch delivery of these member services? Will it or should it directly or indirectly foster the proliferation of cost-cutting agentic AI applications that ultimately replace some of its own members out in the field?I suspect that GFOA’s upcoming conference in Washington, D.C., will have plenty of buzz about this topic, from both the early adopters and the AI phobics. By next year, the exhibit hall will undoubtedly be packed with vendors pitching their newest “AI-enabled” financial services and software — both genuinely useful products and the overhyped ones cynically called AI washing. Within a year, some of GFOA’s committees will likely begin work on producing expert industrywide guidance for how to implement this technology effectively, efficiently and thoughtfully in the public’s interest.Today’s cost shifting and budget cuts from Washington are already making life difficult enough for many leaders and workers in state and local government — and that’s without the overlay of the AI revolution. Public-sector professionals will be looking for help and encouragement wherever they can find it. We now live in an era when many individuals feel isolated with a lost sense of community, so GFOA stands out as a stellar example of what de Tocqueville meant in 1835 about the power of our unique “ art of association .” Hopefully that vital tradition will endure.GoverningGoverning