Epic Fail – AI Needs a Complete Makeover

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Epic Fail - AI Needs a Complete MakeoverAs I’ve chronicled in the Appraiserville section of my Housing Notes newsletter since 2016, the scale of Appraisal Institute bureaucratic self-dealing of the executive committee and some members of the AI Board of Directors is breathtaking. Over the past decade or more, AI National has been able to keep a lid on the membership backlash by threatening to remove a member’s credentials for speaking out. Membership has been reluctant to risk losing something they worked hard for in both time and money that they have remained quiet – until the past few years. With the significant devaluation of the SRA designation and growing signs of the MAI designation’s devaluation, more are coming forward.

The FOJs (Friends of Jim Amorin) have been using that freedom from oversight to act with impunity. They are more openly corrupt now than ever because that’s the only institutional memory they possess. However, we are seeing some signs that more AI Board of Directors aren’t interested in rubber stamping FOJ efforts, as illustrated in the previous board meeting results.

The next board meeting is coming up tomorrow and Friday, and it is a seminal moment for the Appraisal Institute. It is where the BOD gets to vote on Jim Amorin’s new contract that the entire board has not seen. As a reminder to board members: your job is to represent your membership, not the executive committee. You can’t vote in favor in good conscience, if you haven’t seen it or been exposed to the key terms. Your role as a member of the AI Board of Directors is critical to the Appraisal Institute’s future and your responsibility is real.

The Appraisal Institute has an IRS nonprofit tax code designation: 501(c)(6) “Defined as Business leagues, chambers of commerce, real estate boards, etc., created for the improvement of business conditions.”

At this point, it is hard to see this organization as “created for the improvement of business conditions.” Given the long-time failure of organizational leadership as measured by the empirical data extracted from the 990s tax filings in public record shared below, this organization needs a complete makeover immediately. It starts with the current CEO.

I hope some in AI membership will use the information shared below to bring an inquiry to the U.S. Attorney’s Office for the Northern District of Illinois.

Over the past few days, a detailed analysis of the Appraisal Institute’s performance from 2006-2019 has gone viral within the industry. The anonymous author(s) analyzed AI National’s 990 tax filings in a series of charts and tables by “Concerned Members,” and you can download it here: The Appraisal Institute as Told by the 990s.

The results should send an alarm to membership and the AI Board of Directors on the organization’s future. The FOJs have poisoned the leadership culture, which has damaged the value of the designation brands and the organization’s credibility to the business world. None of this would have been possible if designated members weren’t vulnerable to the threat of losing their designations if they chose to speak out. But with the perceived value of membership declining, the fear of the threats by the organization has been diminished.

Here is my favorite chart of the 990s presentation. Current CEO Jim Amorin was made president (for the second time) in 2017. Now, look at the chart.

AI staff salary share

The following pages are the same found in the full pdf document.

Here are what the numbers tell me, as an outsider to the organization:

  • To offset the steady long-term membership decline (-29.2% from 2008-2019), membership dues as a percentage of total revenue rose steadily over the same period. This action kept revenue coming in. With all that newfound revenue, the FOJ AI executives and AI Board of Directors viewed this as an opportunity to lavish high salaries on all.
  • The data table on page 10 shows that expenses are remarkably flat, yet membership has fallen sharply over the same period. If membership falls another 7,500 over the decade, will expenses continue to remain the same?
  • Jim Amorin has made $1,725,003 from 2007 to 2019, yet membership has fallen 22.7% over that period. Why would his compensation increase, and why is he paid about 50% more than his peers in other organizations? I’ve presented these numbers in past Housing Notes. So many questions.
  • Revenue emphasis is shifting to rely more on dues while education programs, once a promising and prestigious revenue stream (and a cash cow for a handful of instructors that were FOJs), are losing their importance because of virtual continuing education programs. Who has been in charge during this erosion in education revenue, once a key branding strength of the Appraisal Institute?
  • In 2016, I got quite upset with the proposed “taking” of chapter funds, and I became an activist, yet I’m not even a member of AI. Jim Amorin made it happen in 2017 when he became president. Now given all the big salaries and excessive travel, etc., where did all that money come from? I keep thinking about all the chapters who had saved money over decades to the tune of hundreds of thousands of dollars, even more. We should be asking AI National: Since the 2017 “taking,” how many times did AI National dip into chapter funds to plug the deficit? What is the current status of their reserves compared to before the taking? The AI Board of Directors must have the answers to these questions. Membership should demand it.

There has not been a publicly shared strategy to stem the decline in membership. Announcements of committees (like residential appraisers) were faked to quell the discord among residential members, and FOJs had no intention of taking action.

Marketing and branding have been the same old, same old, every year blah, blah, blah, which means that the organizational leadership has filtered out nearly everyone that is not a like-minded FOJ. Look at the last election debacle where the sham petition process was overtly used again by Jim Amorin to get his FOJ “Tank” installed instead of the duly nominated candidate Craig Steinley. Yet, membership pressure on the board stopped it. There is great danger to membership who are here for their designations within an organization with everyone in power being subservient to one person – a monarchy. Any new and creative thinking is not just discouraged; it is impossible.

I hope that ALL on the AI Board of Directors remember that their responsibility is to the membership and to sustain the organization’s future, not the FOJs. I can only assume there may be future legal action on this overt institutional taking, and each current and past board member is exposed. If you want the Appraisal Institute to pivot in the right direction and stop the executive committee’s self-dealing, please do the right thing and DO NOT extend Jim Amorin’s contract. It’s time to hire a CEO to lead the organization in the right direction, responsibly, ethically, and properly. If you do nothing as a board member, this will be your professional legacy as viewed your peers.

Here is a snapshot to memorialize the 2021 Appraisal Institute Board of Directors:
The Appraisal Institute 2021 Board of Directors
 

Jonathan Miller
Latest posts by Jonathan Miller (see all)
Image credit flickr - Faldrian
Jonathan Miller

Jonathan Miller

Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. He is a state-certified real estate appraiser in New York and Connecticut, performing court testimony as an expert witness in various local, state and federal courts.

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6 Responses

  1. Avatar Working Dan says:

    I thought appraisers were supposed to be about “data”. Although this data purports to come from IRS data, don’t you find it interesting that for many years the membership numbers are rounded to the nearest thousand (while some are exact numbers). That tells me they didn’t have the ACTUAL membership numbers but rather “guessed”. That means the percentages and trends cannot be trusted in this “data”. The AI has chapters with governing boards all over the country. If this was that big of an issue, why aren’t we hearing from the local leaders of chapters? Are the rank and file AI members all just too stupid to figure this out and we need Mr. Miller to help us understand? Instead, we get a group of perpetually-aggravated outside appraisers who are not members that take every opportunity to beat down on an organization they are not a part of. Tell me Mr. Miller- why is it any of your business what the Appraisal Institute does? You are not member. AI members are perfectly capable of governing their own organization. Go back to boasting about flying on private jets or some other nonsense you bloviate about. Maybe someone should put together a chart of all the free (LAVISH) trips and speaking fees Jonathan Miller has received going to conferences hosted or sponsored by COMPETING appraisal organizations of the AI. But I’m sure it’s just a coincidence he only has an issue with the governance of the AI. Has anyone checked the IRS 990s of the ASA or the AGA?

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    • Avatar AI Spouse says:

      I have been very appreciative of Mr. Millers comments. His commentary has helped to shine a light on this organization’s self-dealing and inability to support their designated members. The organization is truly struggling. I am married to a designated member. I would have joined AI as well if I saw the value in membership. I will add, our local chapter has always been well run and supportive of membership.

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  2. I’m not an AI member. As one poster noted, outside non member pot shots or critiques raise a question about motivation. Its a legitimate query.

    Any views or comments I may have are irrelevant to members of the AI. Except possibly as a mirror to how they are perceived outside of AI by some non member appraisers.

    In September (2019?) I was invited to attend an AI Regional Governmental Affairs Committee meeting in Southern, CA.

    It was a cordial and productive meeting for me. I was able to share certain information I don’t believe they (AI Leadership) were aware of. I also gained a better understanding of their collective thought processes and lobbying efforts. There is no question that they are oriented toward very high income earner C&I appraisers. I don’t believe (personally) that will ever change…though they could become more inclusive to a certain degree.

    I believed they were making an effort to reach out to their own SRA Members as well as residential affiliates. Keep in mind, this is just one chapter, and it may or may not be representative.

    There is much AI does that I don’t agree with. An example is their apparent pandering to the meme of systemic racism being a real thing. I also understand why they feel they had to get on board that particular band wagon.

    AI is a HUGE money making machine for many of its members. As such its focus is not the same as my own, or The Guild I’m privileged to represent. Nor SHOULD it be.

    AGA exists to serve the needs of ALL of its members. We are a non profit. None of the executive officers of AGA collect salaries or stipends. The concept of Members helping other Members without ulterior or pecuniary motivation is important to us.

    It is the single biggest counter to accusations “you guys just want to live high on the hog off members dues.”

    The ONLY designation we offer is that of Member-AGA itself. It is not higher or lower based on license levels. It is primarily an ethics focused designation that also recognizes & incorporates the federal and state licensing and certification educational requirements as indicators of competency.

    We believe the number one requirement of any appraiser to be professional integrity. Period.

    In any case, I read the article and response(s) with interest. I don’t see that the graphs are especially of interest. Perhaps because I don’t know what else went into them besides a lot of effort.

    IF membership dues revenue declines, then it stands to reason that any fixed or static expense WOULD naturally represent a higher percentage of that reduced revenue.

    I won’t pretend to have done more than a cursory scan of the other charts. Not to offend or be disrespectful to anyone, I’m just not that interested.

    Seriously. Did I mention I’m not a member?

    If I have ANY suggestion (as a non member) it would be to make online CE courses from AI much more affordable. Maybe on a selective basis. Such as fundamental courses and report writing. Courses ALL of ‘us’ could benefit from.

    The other is to urge greater outreach effort by AI on issues of interest to all appraisers. Neither ASA, AGA nor the State Coalitions are their enemy.

    There’s a lot of common ground.

    For my part I may or may not continue my “love-hate” very distant & unofficial ‘relationship’ with AI. Many MAIs and SRAs are personal friends.

    1. AI has good educational offerings
    2. AI has mentorship available
    3. AI continues to be a major force in the profession. Even with declining membership numbers which may reflect the overall decline in “our” licensing numbers nationally.
    4. AI Members can be a bit arrogant at times…even when its not justified. They are generally fun to oppose in litigation cases. Especially when they rely on the imprimatur of designation in lieu of credible work. Not often, but it happens. Hence the ‘love-hate’.

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    • Avatar Charles Baker says:

      Mike – Also would like to add that I personally appreciate the effort you and the AGA have made in the defense of several appraisers at the BREA. You’ve gone above and beyond. Thank you.

      4
      • Thanks Charles. It was your personal outreach that prompted me to keep an open mind. Instead of just butting heads as we had in the past, you took the first step and showed positive effort.

        That kind of effort means a lot to me; & most of AGA’s members and leadership.

        Each organization has their own niches. Ours is not as broad as AIs. Though we’ve had certain success in a variety of areas.

        I’d welcome possible future attendance on issues of mutual concern.

        4
  3. Avatar Charles Baker says:

    Well stated Mike. It should be noted that fully 62% of professional associations have shown flat to declining membership in the past ten years. The Institute is not the only one. In my opinion, the ULI has a good organizational model that perhaps AI should explore.

    As an aside, we enjoyed your contributions at the Sept 2019 GRC meeting and hope you’ll accept a future invitation.

    I compared the last two pages of this “anonymous” release with the actual PDF copies of the 990’s and there’s just so much missing information. When Mr. Amorin was President he was earning about $98 per hour and had to essentially put his private practice on hold. Also missing (or ignored) is the fact that Fred Grubbe was CEO from ’07 to ’17 drawing a salary in the mid to high $200k range.

    As usual, Mr. Miller is quick to the keyboard but slow to exercise a modicum of due diligence.

    6

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Epic Fail – AI Needs a Complete Makeover

by Jonathan Miller time to read: 5 min
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