The Funding Question Part 3

The Funding Question – Part 3

Continuing the discussion from yesterday

With the following to come:

  1. How should I vote at the AGM on the Board proposal to fund British Orienteering?

  2. How can we fund British Orienteering to assure the future?

The discussion so far can be found here

If you know how you are going to vote and are clear about the issues already please return your proxy vote if you are not planning on attending the AGM. If you are not 100% sure of the issues and want to know a little more hold onto your vote for a few more days and find out a bit more about the background to the proposal.

 

How we might plug the gap in funding; what are the options?

Over the last few years the discussions around the funding of sport have been on-going, probably due first to rumour and then more substantively about how government funding, delivered through the sports councils will be changing.

National staff work closely with Sport England and Sport Northern Ireland and through a variety of formal and informal channels we have been hearing discussions about how funding was to be cut significantly (changed overnight by the November budget) and more lately how funding could be more effectively spent by investing more in non-NGB organisations. The latter particularly applies to ‘increasing participation’ where Sport England working through NGBs has had little impact on participation whilst the investment they have made to the likes of Sky Ride, StreetGames and parkrun have seen significant increases.

We now have statements from Sport England, the sports council that has invested significantly in British Orienteering, that ‘core’ funding will be stopped and funding will be focused on the delivery of ‘interventions’ that are target driven. NGBs will have the option to bid for intervention based programmes but a wide group of other bodies including commercial organisations will be approached to submit schemes also. Funding will be ring fenced and only used against the programme.

The impact on British Orienteering is significant as we, like most other NGBs, use funding delivered through Sport England to underpin much of our core infrastructure including the National Office, most staff, etc.

So, that’s the background to our need to raise income, what has the board considered during the discussions that led up to the proposal put before the AGM?

What follows is a brief summary of the wide ranging discussions that have taken place over the last 18 months or so.

Membership Fees: Generally, many people pass comment that membership is ‘cheap’ and that the value of the membership benefits are considerably more than the cost of membership. Compared to most other membership type organisations of a similar size £5 is remarkable value.

When the AGM considered the changing of the membership scheme in 2012 it was on the basis that reducing the membership fee to £5 from 2013 would lead to an increase in members. Did this happen? I’ve certainly debated this on many occasions with members and other staff. In my opinion it was a successful change; we went from 10,869 members in 2012 to 10,022 in 2013 a loss of 847 members, many of who were family members who rarely if ever orienteered. We have then increased the number of members to 10,939 in 2015 and almost all actively orienteer. The membership fee has remained at £5 since 2013.

Levy: The levy is a good way of spreading the burden of generating income as it is paid by all participants that take part in ‘competitive’ orienteering, that is event level D through A. Levy was set at £1.10 in 2013 and has been increased to £1.25 in 2016. Board members that orienteer frequently felt that increasing the levy would have an impact on the local events in particular.

There have been discussions about other ways in which levy could be charged which might enable the lower levels of competition to maintain a relatively low levy whilst higher level events might be accepting of a higher levy. Unfortunately, the statistics make this a challenging task as participation is higher at local events. Based on the average participation figures over the last 3 years Level D is 43% of the total participation that pays levy, Level C 25%, Level B 21% and Level A 11%. It might be feasible to increase levy payable on UKOL races.

The Board considered raising the levy more significantly and concluded that the impact of a significant increase in levy might be to reduce participation particularly at local events (Level D).

Major Events: We currently generate about £25,000 annually for British Orienteering from the JK and BOCs and this figure has stayed fairly static for over 10 years. We do hear lots of comments about the ‘high’ cost of entry for the major events and the Board were reluctant to increase income from these events. To complicate the position, we are currently trying to find a better way of staging the major events, the so-called ‘super levy’ model and the ‘partnership’ model. From an income generation perspective, it seemed sensible to leave these events alone at least for a few years.

Commercial Activity: An interesting area of work! Experience over the last few years indicates that it is almost impossible to gain sponsorship – the days of sponsorship are now over across sports with most ‘sponsorship’ deals being commercial partnerships where all partners benefit. We know you are comfortable with us making commercial arrangements when they do not impact on you our members and participants. We have some deals like this such as with the Youth Sports Trust (kit in primary schools) but in reality they only make small amounts of money or produce ‘in-kind’ benefits.

We know we can make money from such things as traders around our major events but there is an understandable reluctance amongst a section of the membership for us to do this.

So the Board came to the conclusion that even if we could generate commercial income it is unreliable and unlikely to be of significant impact. Most arrangements come with considerably resourcing needs making the ‘free’ income generated often small in relation to the ‘real’ costs.

Trading: We currently generate some income from trading, for instance we sell Teaching Orienteering and make a small profit but once again the Board considered trading to be unreliable and unlikely to generate the significant increase in income we are seeking.

 

Decision time

The Board came to the decision that the only reliable way in which to increase our income is to increase membership and/or levy.

Having determined that we need to generate an increase in income of approximately £80,000 to continue to deliver our core services and act as a NGB of sport, the Board considered how we could configure an increase in membership and levy in a way that you, our members, might have sympathy with.

The options are permutations of the balance between increasing the membership fee and levy. There are many permutation including:

Currently the 2016 Membership is £5 and the Levy £1.25

  1. Membership to £15 (juniors £5) and Levy to £1.35 – has least impact on participants/events

  2. Membership to £10 (juniors £3.50) and Levy to £1.75 – may impact on participation

  3. Membership to £8 (juniors £2.50) and Levy to £2.00 – maintains the balance of membership:Levy agreed at the 2012 AGM.

The Board discussed what would happen if the proposal was split with one proposal dealing with the membership and one with the levy but decided it is the combination of the two that is required to generate the income and it was more appropriate to deal with both together.

What would happen if the voting membership turned down the proposal? The Board discussed the feasibility of holding an EGM later in the year if necessary when the Board could be guided by the views of the voting members. Alternatively, the Board could use the reserves to tide British Orienteering through to the 2017 AGM but this was considered the riskiest solution and one that could only be used with the agreement and knowledge of the members.

The Board decided to put option (1) in front of the membership based on ‘car park’ discussions and a reluctance to increase the levy significantly in case it impacted on participation particularly at local events where clubs work so hard.

The Board also accepted that we could make cuts to our budgets to operate on our current income but this would mean accepting the reduced role British Orienteering would play and the longer term impact on the sport.

 

Tomorrow: How should I vote at the AGM?

 

Mike Hamilton


Posted on Thursday 17th March 2016