ECF Funding

[Roger de Coverly]

Under option 2 of the proposed changes, Game Fee goes up to 60p

No matter how many leagues are available in theory, how many club players exceed 10 to 15 games a season for their club? At the 60p rate, that's £ 9 a head, you need 30 games with an £ 18 membership. As these debates always conclude, the net result is a transfer of the burden of financing the ECF away from the Congress player and to the Club player, particularly the Club player who is only able or willing to play a limited number of games.

But maybe the experience of the French and Germans in building up massive numbers of players is that evening local club chess is obsolete and the way forward is one round a day FIDE rated events coupled with a national league structure played using slowish time controls at weekends. The ECF have the vision to realise this and are trying to close down club chess in its present form, so as to replace it with a more continental style model.

[Alex Holowczak]

But maybe the experience of the French and Germans in building up massive numbers of players is that evening local club chess is obsolete and the way forward is one round a day FIDE rated events coupled with a national league structure played using slowish time controls at weekends. The ECF have the vision to realise this and are trying to close down club chess in its present form, so as to replace it with a more continental style model.

Of course, that's exactly what they're trying to do!

[Eoin Devane]

A couple of points of clarification might be required:

1. In the first point under (4) in Option 1, it says "New players (i.e. ungraded)". Does this mean that everyone ungraded is a "new player"? Or should that say "i.e. never previously graded"?

2. Does the second point under (4) in Option 1 mean that ungraded players who did previously have a grade will have to pay for this season once they have played more than three games this season? Or does it mean that ungraded players with fewer than three games in the previous season do not have to pay for this season, irrespective or their activity this season?

[Richard Haddrell]

Three random points.

Q What is the difference between Basic and Standard?
None, other than cost.

Not true. Standard (and Full) Members get Game Fee exemption in congresses. Basic Members get exemption in everything. It’s one of those little complications that make the current system so unwieldy.

leagues have to guess their Game Fee in October, 6 months before the end of the season.

No, they pay it in December. Estimating rather than guessing, of course. Each year’s payment includes an adjustment for the previous year’s over- or underpayment. It may be untidy, but it shouldn’t lead to gross inaccuracies. Should it?

The NCCU don't buy the notion that individuals should become guarantor members of the ECF (those who pay £1 if the ECF goes into liquidation).

I asked about this and was told that it'd cost the ECF more to collect £1 from everyone than they'd get back in £1 contributions, so chances are you'd never be asked for it, because it'd be cheaper for the ECF to pay it themselves.

It is well known that I’m clueless about money. But surely the point is that it wouldn’t be worth the creditors’ while to collect everyone’s individual £1. In the bad old days, before the ECF was a company limited by guarantee, if the ECF went out of business owing zillions of pounds, its Officers - I was always vague about which Officers - would have been personally liable. Now all Members are, but only to the tune of £1 each (which in all probability the creditor wouldn’t bother to collect). I don’t see why the NCCU wouldn’t buy this notion.

[Alex Holowczak]

leagues have to guess their Game Fee in October, 6 months before the end of the season.

No, they pay it in December. Estimating rather than guessing, of course. Each year’s payment includes an adjustment for the previous year’s over- or underpayment. It may be untidy, but it shouldn’t lead to gross inaccuracies. Should it?

Well, yes. I wasn't sure of the exact month, but I figured that the amount they paid would be the same regardless of whether they paid it in October or December.

It does lead to gross inaccuracies though, as has been previously noted.

The NCCU don't buy the notion that individuals should become guarantor members of the ECF (those who pay £1 if the ECF goes into liquidation).

I asked about this and was told that it'd cost the ECF more to collect £1 from everyone than they'd get back in £1 contributions, so chances are you'd never be asked for it, because it'd be cheaper for the ECF to pay it themselves.

It is well known that I’m clueless about money. But surely the point is that it wouldn’t be worth the creditors’ while to collect everyone’s individual £1. In the bad old days, before the ECF was a company limited by guarantee, if the ECF went out of business owing zillions of pounds, its Officers - I was always vague about which Officers - would have been personally liable. Now all Members are, but only to the tune of £1 each (which in all probability the creditor wouldn’t bother to collect). I don’t see why the NCCU wouldn’t buy this notion.

Yes, I meant the creditors.

[E Michael White]

Is the ECF using the VAT flat rate scheme - paying over 8.5% of the gross income (assuming below £150K limit) and if not would it be of benefit?

David - The ECF accounts show turnover in excess of £300k pa and so on the face of it would not be eligible for the flat rate scheme.

Very impressed with your VAT knowledge Sean !

Could Vat be reduced by modelling partly on the Wimbledon Lawn Tennis and Croquet Club ? Instead of charging game fee or OMOV direct member fees, issue various types of redeemable Debenture stocks issued above par, where during the currency of the Debenture attached shareholder perks guarantee grading of games. This would be comparable to some centre court tickets attached to Debenture series.

Why did the Fischer boom increase numbers?

I have never really believed that Fischer was the only factor, more several factors occurring at the same time.

I dont think the chess mind followed the lines:-
"Oh look Fischer is playing Spasski, think I will join a chess club."

I guess it went more along the lines of :-
1. "As a baby boomer I cant get into a local amateur football team there's too much competition. Should I take up chess again ?"
2. "Oh look Fischer is playing Spasski, should I join a chess club ?"
3. Then later "what are all these weekend congresses about ? Should I take up chess again ?"
4. Later "My flat is freezing during this 3 day week when its my turn to be without electriciy. Should I go down the chess club?"
5. Later when the 3 day week was over - If I turn the heating off once a week and go down the chess club it will be cheaper. I am definitely taking up chess again.

[Richard Haddrell]

[Leagues estimating their payment in December] does lead to gross inaccuracies though, as has been previously noted.

Something leads to gross inaccuracies. Where is your evidence that it’s this?

[Alex Holowczak]

[Leagues estimating their payment in December] does lead to gross inaccuracies though, as has been previously noted.

Something leads to gross inaccuracies. Where is your evidence that it’s this?

I think it is fairly logical that estimating something 6 months before you know a precise figure is likely to yield inaccuracies in contrast to, say, estimating the number when you actually know it.

I agree with the jist of what you are saying though - that this is only one source of inaccuracy. Examples might be:
(1) Estimating 6 months in advance
(2) Treasurer unable to calculate Game Fee
(3) League being devious in its underpayments
(4) MOs - and hence basic memberships - overlapping with leagues in non-MO areas
(5) (Consequence of (1)) Never getting the readjustment correct
(6) Lack of thorough checking from the Office of point (3) by checking the payments
(7) An ill-maintained membership list by either an MO or the Office

And I'm sure many others.

[Roger de Coverly]

Now all Members are, but only to the tune of £1 each (which in all probability the creditor wouldn’t bother to collect). I don’t see why the NCCU wouldn’t buy this notion.

I didn't either, apart from the issue not raised by the NCCU that it wasn't needed in the first place. The NCCU website as researched by Alex still seems fairly clear that it only asks you to sign the £1 form (aka the white form) if you intend to play in FIDE rated events.

Could Vat be reduced by modelling partly on the Wimbledon Lawn Tennis and Croquet Club ? Instead of charging game fee or OMOV direct member fees, issue various types of redeemable Debenture stocks issued above par, where during the currency of the Debenture attached shareholder perks guarantee grading of games.

The "late" BrainGames company demonstrated a way to get tax relief on patronage for chess events. What you do is set up a Company and sell shares to raise money to finance the event. You then spend all the Company's money on the event. The shares are thus worthless because the Company has no money left. So provided you have taxable capital gains elsewhere, you can offset the "donation" to a chess event against Capital Gains Tax. Not a lot of use if you don't have any Capital Gains to offset.

[Roger de Coverly]

I think it is fairly logical that estimating something 6 months before you know a precise figure is likely to yield inaccuracies in contrast to, say, estimating the number when you actually know it.

The concept of a payment on account based on a best estimate or a percentage of a best estimate is a fairly normal commercial practice. If you have an employed office, I would have thought they knew these things. I'm aware that the delivery of the software to handle Game Fee from the grading data was delayed back in mid-nineties, but why did it take until relatively recently to sort this out? What was "you know who" doing when he was nominally in charge of the Office for many years?

[Roger de Coverly]

1. In the first point under (4) in Option 1, it says "New players (i.e. ungraded)". Does this mean that everyone ungraded is a "new player"? Or should that say "i.e. never previously graded"?

You might suppose that it's an attempt to address the issue that compulsory membership means that someone's very first potentially graded game (and possibly their last) will cost the individual, their club or the league £ 18. Whilst it appears to offer incentives to the player in their first year, the rules as proposed would act to accelerate the retirement of players who may already have lost interest. So someone who played 9 games or more in their first year (free) who only wants to play a handful in their second is going to be hit for the full £ 18 if they play any at all.

[Alex Holowczak]

I think it is fairly logical that estimating something 6 months before you know a precise figure is likely to yield inaccuracies in contrast to, say, estimating the number when you actually know it.

The concept of a payment on account based on a best estimate or a percentage of a best estimate is a fairly normal commercial practice. If you have an employed office, I would have thought they knew these things. I'm aware that the delivery of the software to handle Game Fee from the grading data was delayed back in mid-nineties, but why did it take until relatively recently to sort this out? What was "you know who" doing when he was nominally in charge of the Office for many years?

I have absolutely no idea what happened in the 90s. Indeed, I had no idea what happens until August 2010.

When I first saw a grading spreadsheet from RH, I wondered how to work out the Game Fee. Of course, I got it wrong until RH explained the ins and outs properly. I then asked if it was possible for the calculation to be built in to the spreadsheet, which it was. Until then, the spreadsheet also missed information on the number of basic members (i.e. the ones exempt from Game Fee), so I'm not quite sure how anyone ever knew how much Game Fee they were supposed to be getting. Robert Richmond alleged to have checked this during his time at Finance Director. I'm not sure how, since he never had the information available to actually calculate it. I guess the graders could have provided it to him upon request.

So now, the Office just needs to check payments against what the spreadsheet says they're supposed to get. This is far more efficient for congresses, which pay after the event. It should be more easy for them to get the money they expect, anyway!

[Andrew Farthing]

Sorry for not posting anything for a while. I was out playing chess (after a fashion) yesterday evening, so I'm catching up now.

To pick up some of the points raised:

The £1 guarantee - Richard Haddrell is quite correct that the point is that the amount per person is so small that in practice it would not be worth the expense of collecting it from an administrator's point of view. As I understand it, the requirement is that anyone classified as a "member" must provide the guarantee; there is flexibility in how you define "member". This means that it would be possible to classify what we currently call "members" as something else (e.g. subscribers) and define "members" as a much more restricted population (e.g. organisations or Board members). I don't have a specific proposal in mind, but I mention this so that it is understood that there are potentially options in this area. As matters stand, however, every member needs to sign the guarantee in order to be a member.

The "Fischer effect" - For what it's worth, there are those (Andrew Soltis, for one) who argue that the growth in US chess was driven by the introduction of ratings rather than simply the publicity from Fischer's successes. Reading his arguments, I found them quite persuasive. To my mind, there is no doubt that being able to measure one's performance via a grade or rating made chess much more attractive and this may well have had a much more significant effect in the long term than Fischer's achievements.

Policy towards club chess - Of course the ECF is not setting out to "kill" club chess. I'm sure everyone on the Board wants English chess to thrive at every level; I certainly do. The simple truth is that we can't have it both ways: either a way is found to fund what the ECF does or we cut back on the things it does. If it's the latter, I've commented previously that Council will have to spell out what it wants the ECF to stop doing. If it's the former, the fact is that the funding requirement is what it is, and the only choice is how it is met, i.e. who pays what.

There is no denying that a key difference between options 1 and 2 is that the former spreads the burden of funding the ECF evenly across all players, regardless of how much they play, whereas the latter means that those who play more, pay more (albeit not in proportion to the activity - direct members in non-MO areas pay a LOT more). This is why Council is being asked to make a choice. It's an important difference and I'm not claiming that one is better than the other. The only thing that I can say is that, from the ECF's point of view, option 2 is more expensive, so to some extent choosing this comes at a price. That doesn't make it wrong.

The "Pay to Play" fee - The Board's view was that it would be appropriate to incentivise congress organisers for the work involved in collecting the fees from non-members by giving them £1 from the £6 fee. It could be argued that this is consistent with other incentives for those who collect monies for the ECF, i.e. the 10% of the Basic membership fee retained by MOs who pay by a certain date; the 2.5% Game Fee discount for prompt payment. In practice, congress organisers frequently offer a discount on entry fees for members which is lower than the amount of Game Fee saved, so there is currently a margin in practice.

Collecting Game Fee - As part of my work on the funding proposals, I wrote a paper trying to establish the truth about the alleged under-collection of Game Fee. I've asked for this to be posted on the ECF website, and it should appear very shortly. (It was originally going to be an Appendix to the Funding Proposals, but it became quite complex and lengthy, so I decided to separate it and let people decide if their level of interest justified reading it.)

The paper includes figures on the number of half-games per type of event, which highlights how significant league chess is: it's by far the biggest category.

[Roger de Coverly]

If it's the latter, I've commented previously that Council will have to spell out what it wants the ECF to stop doing.

The problem is that you've provided next to nothing which would enable Council (or county meetings) to make any form of rational judgement. I suggested axing Chess Moves as something done by the Office but you say it doesn't cost much. What does though? You can see things like International Participation at both Adult and Junior level as requiring funding by reference to the appropriate Directors' budgets. Is it that there are significant office costs as well because of travel and hotel arrangements? You note that there are some fifty volunteers, a point validated by counting the list in the YearBook. If you axed events (or removed them from ECF control) like the National Club that hardly anyone enters would that result in savings because there would be fewer ECF appointments.

If you reduced the YearBook down to essential archival and contact content, what does that save?

The only thing that I can say is that, from the ECF's point of view, option 2 is more expensive, so to some extent choosing this comes at a price.

You say this, but in the absence of evidence it's just an assertion. I don't buy the notion that compulsory membership is somehow cheap. If you are expecting me and every other Club Treasurer or Secretary to establish a list of players and communicate both the detailed list and money to the ECF with the penalty that if we get it wrong at the very least then our players will be excluded from the grading list, that's both a cost to the club volunteers and to the ECF by extending the list of people it has to deal with and chase up if unresponsive. If alternatively you do memberships centrally you've got the costs of collection and non-collection from ten thousand or more.

You haven't said anything about international rating fees, these on the face of it continue to be collected on a per event basis and I think are loaded so the income raised exceeds the amount due to FIDE. But there's a point of principle. If you collect money for rating event by event and load it to raise money for the ECF this isn't different in principle from the Game Fee concept.

Finally it's always seemed to me that Game Fee was a straightforward concept.

Either (a) you count the total number of games in an event
and subtract the number of games for which Game Fee is waived
or
(b) you count the number of games on which Game Fee is charged.

you then multiply by the per game amount.

As a statement of user requirement for an IT system, it's one of the simpler ones. We learn from Alex H that it wasn't until very recently that a simple process of deriving Game Fee amounts from the grading data was put in place. Perhaps it's not so surprising that Game Fee is deemed expensive if you try to calculate it without having the necessary information available.

[Roger de Coverly]

The "Fischer effect" - For what it's worth, there are those (Andrew Soltis, for one) who argue that the growth in US chess was driven by the introduction of ratings rather than simply the publicity from Fischer's successes. Reading his arguments, I found them quite persuasive. To my mind, there is no doubt that being able to measure one's performance via a grade or rating made chess much more attractive and this may well have had a much more significant effect in the long term than Fischer's achievements.

I don't think the facts quite bear this out. Both here and in the USA, grades and ratings go back to the 1950s so they existed well before Fischer. I remember the comparison between 1971 and 1972 at Stewart Reuben's Islington tournaments. In 1971 most of the tournaments fitted into an admitted large school hall, so it was several hundred players. In 1972 it was over a thousand and the event seemed to have spread over the entire ground floor of the school. Many of the new players were ungraded of course, having taken up or returned to chess after the events of that summer. The monster Swiss was then a new type of event and Stewart had to invent ever more devious pairing schemes to cope. The demand was there and the "supply" of chess just about caught up.