Where will the increases in membership numbers come from?

[Angus French]

The question in the title for this thread stems from the latest ECF accounts documents (the ones presented for the 2019 Finance Council meeting later this month). I thought it important enough to warrant a separate thread.

The ECF Board is planning on increases in membership numbers.

In his report to the last (2018) Finance Council meeting the Finance Director wrote:

In the current year there are good indications that Membership numbers are growing; this is probably explained by the changes in Game Fee application and the growth in junior players. The Board has decided to set targets to grow its Membership numbers by 5% per annum from 2018/19 to 2020/12 (500 new members has actually been used in the calculation). This will increase the capacity of the Federation to support its activities…

And in his report for the upcoming (2019) Finance Council meeting, the Finance Director has written:

The budget has been based on a growth of 500 members per annum until 2020/21 with an increase in membership fees in 2019/20 and 2020/21.

So: the Board is expecting 500 new members a year for the three years 2018/19, 2019/20 and 2020/21. That was the position last year and it’s the position this year.

(Note that these increases are nothing to do with extra memberships to be brought in by the Development Officer. Those increases are separate, as the Challenges for English Chess paper makes clear.)

The increases in membership numbers are important because the federation is relying on them (as well as increases in membership fees) to turnaround its financial position. The federation made a loss in 2017/18 of £18,101. It forecasts a loss of £52,137 for 2018/19. It’s budgeting for a loss of £11,760 in 2019/20 – after which reserves will be down to £37,146. And then it’s projecting gains of £7,251 and £6,668 for 2020/21 and 2021/22 respectively. To achieve the turnaround, membership income will increase from a forecast £181,963 in 2018/19 to £228,844 in 2019/20 and then to £260,615 in each of 2020/21 and 2021/22. These figures all come from the management accounts spreadsheet provided for the upcoming meeting.

So where will the increases in membership numbers come from? Are there new leagues, congresses and internal club tournaments? Are there events which haven’t previously been graded but which now will be?

Taking a look at the Workings page of the management accounts spreadsheet to find out more you notice a few things – see the summary table below (I’ve added some columns to show changes from one year to the next and also a column to show membership counts as at 12 April):

MemberCounts.png

1. The forecast membership numbers for 2018/19 are 451 down on the budget for the same period.
2. The budgeted membership numbers for 2019/20 represent an increase of 994 on the forecast figures for 2018/19.
3. The budgeted membership numbers for 2020/21 represent an increase of 571 on the budgeted figures for 2019/20.

The gains posited for 2018/19 seem to have shifted back a year. You wonder: why is this and, if you’re significantly out for one year, will the same be true for subsequent years?

Looking at the changes in more detail, there are, what appear to me to be, some oddities. Why would budgeted Junior Silver and Gold counts for 2019/20 be lower than the corresponding forecasts for 2018/19? Why would there be a big increase in Junior Bronze members in 2019/20 (over the forecast for 2018/19) – and why would people acquire Junior Bronze memberships when Junior Silver memberships are available for the same price? Maybe there are explanations for these changes from year to year but at the moment I’m wondering: have the projections been thought through and are they realistic?

Switching over to grading lists to get another perspective, albeit of player counts rather than member counts, I can see that 13,858 players had a grade in January 2019 against 13,485 players with a grade in the July 2018 grading list (August revision): an increase of 373. That looks not too bad. However, further examination shows that 262 of the increase is for players aged 18-and-under and this matters so far as the finances are concerned because charges for junior members are set low (and are even free for first-time members).

So where are the increased in the membership numbers coming from - and how will they be split across the categories such that the projected increases in income will be realised? So far as I can see this hasn’t been stated anywhere. Does anyone know? I hope there’s an answer because if there isn’t I think the financial implications could be serious.

[Nick Grey]

ask them. I suspect numbers will be down not up by 2020/21 in all categories.
The increases seem to be unrealistic as well as the finances.

[Roger de Coverly]

So where will the increases in membership numbers come from? Are there new leagues, congresses and internal club tournaments? Are there events which haven’t previously been graded but which now will be?

That seems unlikely. Is it not simply the ECF feeling able to roll out the proposition that you are required to be a member of the ECF to play graded ("serious") chess? Cutting the junior membership contributions to ECF expenditure back to the "de minimis" levels they were under Game Fee rules may increase the number of events graded. The takeover of junior organisations by people who are ECF friendly rather than ECF hostile will have an effect as well.

The proposition that "standard" play events aren't proper chess unless they are graded has held up in practice. That's rather less so with rapidplay events where University and events organised with student participation in mind have been inclined to turn their back on the ECF and being graded.

[Angus French]

So where will the increases in membership numbers come from? Are there new leagues, congresses and internal club tournaments? Are there events which haven’t previously been graded but which now will be?

That seems unlikely. Is it not simply the ECF feeling able to roll out the proposition that you are required to be a member of the ECF to play graded ("serious") chess?

You think that the Board might want to get rid of the three-free-games allowance? I doubt that (and I don't think Council would approve it).

Cutting the junior membership contributions to ECF expenditure back to the "de minimis" levels they were under Game Fee rules may increase the number of events graded.

Yes, increasing the number of members that way won't help the bottom line much as the prices for junior memberships are set low. But, according to the numbers provided, the Board is actually expecting *decreases* in the number of junior memberships for 2019/20 and 2020/21.

Here are my calculations of the income the Board is counting on from the increases in membership numbers they're planning on:

MemberCountsIncome.png

VAT is assumed to be 20%. (And the ECF Supporter rates are assumed to be £6.)

If the increases achieved are lower then the reserves, which are projected to be £37,146 at the end of 2019/20, will be reduced.

I think this is a matter for serious concern because: 1) the increases in membership numbers haven't been explained; 2) the forecasts for 2018/19 don't look good; and 3) the changes for individual membership categories look odd and suggest to me that the numbers haven't been thought through.

[Roger de Coverly]

You think that the Board might want to get rid of the three-free-games allowance? I doubt that (and I don't think Council would approve it).

I'm sure there's a belief in some quarters that it should be compulsory to be an ECF member to play serious chess, but perhaps they don't want to risk putting that to Council.

There's also the ECF's stated ambition to abolish "pay to play". Presumably that requires making membership compulsory to play in tournaments.

But perhaps it's just slack thinking, equating a growth in games played and people playing with a growth in ECF membership.

One possible trend is that established Congresses moving over to on line entry are seeing a growth in entries. That the St Albans Congress the other weekend hit capacity of quite a large sports hall was noticeable. If almost all these players are existing members, that does nothing for ECF finances, given that it abolished the system where it would be rewarded with an increase in games played.

[Angus French]

There's now a Membership Analysis paper included with the Council Papers. It shows quarterly membership figures for the last four years and from this it can be seen that the number of paying members has increased from 9,441 in 2015/16 to 9,535 in 2016/17 and 10,003 in 2017/18. The projected figure for 2018/19 is 10,427 which matches the forecast in the management accounts. I'd guess that the extra numbers over the three years come in large part from the Yorkshire leagues (on stream now that the Yorkshire grading system no longer operates) and the UK Chess Challenge. Still, the forecast for the current year is less than the budgeted for figure of 10,878. And the question remains: where will the projected future increases - on which the federation's finances are relying - come from?

So far I've heard two suggestions:

1. That there will be further gains from the UK Chess Challenge which will encourage more players of secondary-school age to become members. I'm sceptical of this because the January 2019 grading list showed, I calculate, reductions vs. July 2018 in the number of graded players aged 11-18 (2,621 players vs. 2,712).

2. That the Board is being bullish to justify extra expenditure and that if income comes in lower they'll take money out of the reserves and/or the Chess Trust. If true, this doesn't sound to me like a very good plan, given that reserves are already low and that, post the 2018 AGM, there appear to have been problems releasing funds from the Chess Trust (see recent Board meeting minutes).

Does anyone have any other ideas about where the increases in membership numbers will come from?