CUP approaches insolvency

The Canadian University Press (CUP) may be forced to shut down by the end of the academic year, unless it raises thousands of dollars by April 30.

CUP, which provides its 55 members with services including legal advice, training, and a news wire, has faced declining revenues and assets for years, but this time, the organization’s back is against the wall.

The national co-operative of student newspapers sent a memorandum to its members (including the Argosy) on Feb. 20, notifying them that the organization was facing a cash flow emergency. With just $1,687 left in the bank, CUP could not afford to pay its two full-time staff.

CUP was able to pay its staff when FREE Media agreed to advance a planned donation.

The memo indicated CUP would immediately lay off its 12 part-time staff, most of whom worked on CUP’s wire service, as well as liquidate most of its physical assets, cut compensation for its two full-time employees, and attempt to terminate the lease for its office.

J-Source published the memo the next day.

On Feb. 28, it launched a fundraising campaign, Keep CUP Strong, on indiegogo. com, with a target of $50,000 by April 13.

As of March 11, the campaign had raised just over $3,500 from supporters, including former CUP staff and current student journalists—but the pace of donations has slowed since the campaign’s launch.

In a report to CUP’s directors, President Erin Hudson projected the fundraiser would bring in about $5,000—enough, with asset sales and the collection of some unpaid fees, to begin CUP’s next fiscal year with a small surplus.

In an interview, Hudson told the Argosy that the fundraiser’s success was vital to CUP’s short-term survival, but it would take more than donations to stabilize the co-operative.

“Now, it’s really our only hope in a lot of ways, because if we don’t get a cash injection quickly, then it really shortens the timeframe we have to work with to make these decisions [to stabilize CUP’s finances],” she said, also identifying further expenditure reduction as a short-term goal.

Hudson’s report to the board requested governance reforms and new investments as long-term solutions.

While CUP has faced declining revenues and deficits for the past three years, this year was the first that CUP had no savings left to draw upon. With no revenue due until September, when papers pay their membership fees, the organization would face insolvency in May.

“I think in the last three years, there’s kind of been this sense of, ‘CUP doesn’t really have that much money anymore,’ but I don’t think anyone really realized the reality of the situation until a couple weeks ago.”

CUP’s financial woes have existed since 2012. In May 2012, CUP ran a deficit of $10,243 but transferred $51,105 into its operating budget. By June 2013, CUP’s deficit was was $113,718, and CUP’s remaining investment of $10,779 was cashed in. This year, CUP had no remaining investments to draw from.

CUP’s income has declined over the past decade, as campus papers have left the organization, often citing a combination of high member fees and declining revenues for campus media organizations.

Founded in 1938, CUP is the world’s oldest student press service.

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