Director of Finance

Debate directly related to English Chess Federation matters.
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Carl Hibbard
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Re: Director of Finance

Post by Carl Hibbard » Sat May 16, 2009 7:56 am

Paul Buswell wrote:
Carl Hibbard wrote:People working from remote locations using ADSL and a single VOIP number could surely meet most of the requirements?
If you take away the resource of a central office are you not then limiting your pool of senior volunteers to those able to provide facilities within their own homes?

PB
Probably, but a younger more technically minded generation is needed anyway
Cheers
Carl Hibbard

Matthew Turner
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Re: Director of Finance

Post by Matthew Turner » Sat May 16, 2009 8:23 am

I find Simon Brown's post bizarre. We have to run the ECF more like a business, but it is OK to spend 80% of the income on Admin (in fact a bargain). A private company that spent 80% of their income on secretaries would not make it to the end of the week.
I am not sure that I totally understand Paul Buswell's comment

"If you take away the resource of a central office are you not then limiting your pool of senior volunteers to those able to provide facilities within their own homes?"

Directors don't work at the Office as it is, they contact the Office for their requirements. If Stewart, for example, employed a secretary to carry out the International Director's admin, there is no reason why that secretary need work from Stewart's home and everything else would be the same.

I am not necessarily saying that we need to scrap the Office, but I am trying to show that there are other ways forward and we cannot carry on as we are. I find it very difficult to have a meaningful dialogue with people who think an organisation can spend 80% of their income on admin. We really need to wake up.

Simon Brown
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Re: Director of Finance

Post by Simon Brown » Sat May 16, 2009 10:32 am

Of course it's OK to spend 80% of your income on admin, as long as your income is high enough. I invest in a business which needs £96 of cost to generate £100 of income, but since its income is £500m I'm happy. And none of the £96 is materials, it's essentially a business where all the cost is people and property.

The ECF's problem is that its cost base is too high for the income it generates, meaning it can't do many of the things it would like to. So you either accept that this is the way things are going to be, or you do something about it, which in this case is cut cost or increase income. You can't - in my opinion - cut cost. So you either shrug your shoulders and move on, or you take a risk and hire someone who can generate more income.

No prizes for guessing what the ECF will do.

Neill Cooper
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Re: Director of Finance

Post by Neill Cooper » Sat May 16, 2009 11:18 am

Stewart Reuben wrote: The main systemic problem for English chess is not the structure of the ECF, although of course that could be improved. It is the lack of fresh administrative voluntary workers. There are social reasons for that totally outside the control of current chess administrators.
Stewart Reuben
And of that limited number of the fresh volunteers, most run chess activities rather than getting involved in the administration of the ECF.

Stewart Reuben
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Re: Director of Finance

Post by Stewart Reuben » Sat May 16, 2009 11:56 am

And, Neill that is fine, indeed desirable, provided there is an adequate number of them with the required spread of abilities and willingness to take up the many different tasks and opportunities.
For example, find people willing to create and run congresses in London.
Stewart Reuben

Neill Cooper
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Re: Director of Finance

Post by Neill Cooper » Sun May 17, 2009 1:02 pm

Simon Brown wrote:So you either shrug your shoulders and move on, or you take a risk and hire someone who can generate more income. No prizes for guessing what the ECF will do.
Or as the Economist says this week 'The expenses scandal was born of two traits often found in British public life: a preference for “muddling through” over rational design, and a reluctance to ditch a flawed system until it falls apart in a crisis.'

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Ben Purton
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Re: Director of Finance

Post by Ben Purton » Sun May 17, 2009 4:25 pm

It really is a joke the ECF, everyone believes things could be done better, yet nothing changes..........WE NEED CHE!!!!

Why can't we install a new head and get on with things? This Tony Blair-esque transition crap is rubbish.

Ben
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David Shepherd
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Re: Director of Finance

Post by David Shepherd » Sun May 17, 2009 9:39 pm

The main issue as I see it is the choice between cutting costs and raising revenue. I would favour trying to increase revenue, I know this has been tried and is easier said than done.

I would favour paying all directors, this provides an added incentive and a reward for their hard work. It would also start to put the organisation on a more professional basis. The amounts do not have to initially be large as the organisation wants people to work for it who take an interest in the game, however any payment would be a start. Adopting this policy would clearly be detrimental to the already suspect finances, but I believe long term may encourage more younger people to become involved in the running of the ECF. Mainly as I see it many of the people involved do an excellent job but they are older volunteers who have time to spare, which whilst not being a bad thing is not altogether good either.

David Lettington
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Re: Director of Finance

Post by David Lettington » Mon May 18, 2009 5:38 pm

I have great difficulty in understanding why there is such resistance, from many active players in the chess community, to paying more in order to achieve a competent professional body that can run the game.

Even Sunday league footballers pay a match fee (usually in addition to yearly subs), golfers pay a minimum of £15 a round even on municipal courses, anglers pay for fishing licences an daily fees. Why should chess be so different? The game fee, even at 50p, is insufficient to provide enough resources to run the game adequately in England.

Without wishing to denigrate the efforts of the multitude of volunteers in national, club and county chess (I am one myself), the national organisation needs to have paid professionals in place that can drive forward the development of chess.

Stewart Reuben
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Re: Director of Finance

Post by Stewart Reuben » Mon May 18, 2009 5:52 pm

> I have great difficulty in understanding why there is such resistance, from many active players in the chess community, to paying more in order to achieve a competent professional body that can run the game.< David Lettington

Leaving aside the current recession, I am not sure you are correct. I think it is not the ordinary player who resists paying more. It is the people who are on Council who believe there is a moral imperative to minimise the expense of playing chess. I believe it should be to provide value for money.
One problem with increasing ECF tax is that 15% then goes to the government in VAT. When the government has got its act together and adult (not just junior) chess can be within a charity, then that will be the time to consider a high increase in fees and encouraging gift aid.

Steawrt Reuben

Matthew Turner
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Re: Director of Finance

Post by Matthew Turner » Tue May 19, 2009 8:44 am

A lot of the last posters have effectively made this argument - The ECF is almost bankrupt, therefore it needs to either raise revenues or cut cost. If it cuts costs it will simply set in place a downward spiral, it should be brave and try to raise revenue even if in the short term this meant increasing costs. This sounds like a very cogent argument, unfortunately it misses the point.
The ECF has an annual turnover of £150,000. It has just had a bequest of £600,000 from John Robinson, yet it's finances are still in a parlous state. This demonstrates that the organisation itself is totally dysfunctional. It frankly would not matter whether the ECF raised an extra £100,000 or even an extra £1,000,000 it would have very little impact on chess. Change is required. Let's start thinking, what does the Office do?, what do we want it to do? how do we get there?

Stewart Reuben
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Re: Director of Finance

Post by Stewart Reuben » Tue May 19, 2009 2:11 pm

Matthew is simply wrong about some of his statements.
The ECF is nowhere near bankrupt. Of course it should always be looking to raise revenue, cut costs, increase activity and maintain existing useful activity.
The ECF does not have control over the John Robinson Trust. It was democratically decided to put that money into a trust solely to benefit junior chess.
The Permanent Invested Fund still exists and the main purpose of that fund is to maintain stability for the federation. The clue is in the name. If the ECF were to go bankrupt, it would be a bit silly to maintain money in a PIF with no organisation to respond to! There is also the Chess Centre Ltd money which itself is adequate in size to restore the working capital of the ECF to a more than adequate level.

Several of the posters on this forum have had ample opportunity to examine the issues of how the ECF should be changed, but lamentably have not come up with cogent suggestions. Often they have whinged that not everybody has fallen over in their eagerness to implement their suggestions. Of course a number of people will be conservative and not want to change an existing structure, compare that with the current state of parliament. Personally I have always thought English chess needs good administrators and the actual structure is of less importance.
The ECF spends about 30-35% of the income from game fee and membership on collecting that money. That is, of course, too high, but belies what some critics state is more like 100%.

I don't think now is the time to offer a CEO £100,000 a year to improve things. His first task would be to earn his salary. The best time for that was 1972. If people think that is the way forward, why don't you set up a company to offer to run the ECF and float it to raise funding? The Canadian CF had Jonathan Berry who took many of its functions, particularly rating, in return for the income from marketing chess products to the members. That business model worked well until he lost interest. We have tried different systems over the years, but never wholeheartedly a commercial model. Buying the BCM was thought of as a first step towards that. But it did not work out and the BCF would have driven the company into liquidation had we not sold it - at a profit.

It is some time since the federation had a 'think tank' where people explored the ideas of how to take chess forward. If Matthew Turner wants to head up such a unit, there is nothing to stop him and people would help. But simply attacking individuals or organisations without coherent replacement plans is no way forward.

Stewart Reuben

Simon Brown
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Re: Director of Finance

Post by Simon Brown » Wed May 20, 2009 7:13 pm

Glad this is being discussed. A few points re what has gone before, and a few other things to think about...

Clearly the ECF isn't bankrupt. Forget legacies, forget the BCM. It will always be able to raise enough Game Fee to cover its costs, providing there is a competent CFO, because people will pay; even if they don't know what they are paying for, the fear of not having what they don't know they are paying for will ensure that they pay. And Council will always vote it through, even if they rarely understand or even seek the opinion of those they claim to represent. Maybe things are different now.

But the ECF is bankrupt of ideas. You need a CEO who is capable of raising funds from new sources. You are not going to pay a CEO £100k a year (which is cheap in my opinion) and be happy if the result is an increase of Game Fee to cover the increased salary bill - even if (s)he does lick the stamps as well. People can make money out of chess - maybe not a lot - be it from playing, writing, coaching, etc. so there is a market. You just need someone who can work out - professionally, for a change - how to exploit it.

Stewart, I agree that 1972 would have been a good time to do this, but you can't take a 1972 model and apply it to 2009. It is a different world, there are all sorts of new sources of income which weren't around 10 years ago, let alone 35. The problem is that the worthy, but unpaid and therefore often unmotivated, directors and officials of the ECF don't know how.

So I say again - accept what you have and don't expect anything better, or take a risk.

Think about the downside of the risk. If it doesn't work, then after a year, you sack your CEO and Council reluctantly agrees that it needs to transfer some Robinson Trust money to cover the deficit. So you lose some of a windfall but you still have interest on £500k for projects and a decent capital sum in the bank.

Then think of the upside. The more parochial will see Game Fee abolished as the major achievement. You may get more international tournaments, more professionals, more visiting players. More exposure, more newspaper columns, more kids learning and wanting to be chess players, more opportunities for coaching, more chess in schools (and a requirement for many more sets). More sponsors - they like professional administrators. Recognition as a sport, for what that may be worth. A chess culture. Chess in cafes. Professional and semi-professional leagues - yes, I know there is one, but the ECF doesn't appear to be involved now and certainly wasn't when it was set up. Maybe back to a decent chess-playing nation rather than also-rans. Those of us who were around in 1972 will remember what happened afterwards. Ideas of an English GM were fanciful then yet, in 5 years (Leonard, John, I am ready to be corrected) we had three, maybe four?

What are the odds? I don't know. But isn't it worth £100k of money you didn't know you were going to get to find out?

No prizes, again, for guessing what the ECF will do.
Last edited by Simon Brown on Wed May 20, 2009 8:58 pm, edited 1 time in total.

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IM Jack Rudd
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Re: Director of Finance

Post by IM Jack Rudd » Wed May 20, 2009 8:37 pm

I think the aforementioned think-tank sounds like an excellent idea, and I think Simon Brown should be part of it. Excellent post there.

Simon Brown
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Re: Director of Finance

Post by Simon Brown » Wed May 20, 2009 8:45 pm

Jack, if you stand and are elected, if I read rightly on another thread, I would be happy to help. But not under the current regime.

Simon (FM extremely dormant, as I have other things to do...)

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