PNW introducing new funding model

[orangemoore]

Originally Posted by Aren Siekmeier

How is it cheaper?

It should be noted (and they are careful to make this clear in the announcement) that there are NO changes in overall costs or overall reg fees, they're just reorganizing them. USFIRST is lumping all DCMP fees into one. PNW is splitting all fees PLUS its own operating costs among teams. With just that, teams that attend DCMP see their price tag go down, but teams that don't see theirs go up (to the same value for all teams), so it washes out. It gets more expensive on average (to cover PNW's costs).

PNW is planning for more funding (probably already secured or repurposed) to bring it back down to the old base rate of $5000. Effectively funding to cover everyone's old DCMP fees and their own costs. But unless they provide this, everyone pays $6800 (they predict, on average). More expensive.

But the model is that everyone always gets billed the same and everyone sees the full cost of the program. Then PNW's grants take effect and you'll probably pay less than full price. And the goal is that in the future this funding can be found more easily due to the new model and program cost can indeed get cheaper and cheaper.

If you play 2 district events and no championship it would cost 6,800 while 2 regional events would cost 9,000

If you add in a DCMP at the same cost of 6,800 compared to the cost of 3 regional events would be 13,000.

That also excludes travel cost which overall would be less for districts because of the length of events and potentially distance to an event.

[Aren Siekmeier]

Originally Posted by orangemoore

If you play 2 district events and no championship it would cost 6,800 while 2 regional events would cost 9,000

If you add in a DCMP at the same cost of 6,800 compared to the cost of 3 regional events would be 13,000.

That also excludes travel cost which overall would be less for districts because of the length of events and potentially distance to an event.

Agreed. I had meant that this step does not in itself make districts even LESS expensive. Other districts also have that same advantage (on average, in fact a little better perhaps) over regional teams, but different teams get billed different amounts.

[FrankJ]

So paying First directly:

1) rookies no District champs $6000
2) Veteran no district champs $5000
3) Rookies district champs & district $10,000
4) Veterans district champs & district $9,000

PWN everybody: $10,652 maybe reduced later by some undetermined amount.

So the PWN model is veteran team are subsidizing rookies. The teams not going to district champs are subsiding those that do, by a lot. I can see how that makes budgeting & planning for PWN organizers. I don't see it making the events less expensive for the teams. Seems like common core math. YMMV

[Thad House]

Originally Posted by FrankJ

So paying First directly:

1) rookies no District champs $6000
2) Veteran no district champs $5000
3) Rookies district champs & district $10,000
4) Veterans district champs & district $9,000

PWN everybody: $10,652 maybe reduced later by some undetermined amount.

So the PWN model is veteran team are subsidizing rookies. The teams not going to district champs are subsiding those that do, by a lot. I can see how that makes budgeting & planning for PWN organizers. I don't see it making the events less expensive for the teams. Seems like common core math. YMMV

That $10,652 is without any fundraising by FIRSTWA. Before, fundraising got put into running events before it got sent to teams. Now, since the cost to run the entire district is put on the teams, any fundraising FIRSTWA does is directly used to lower the cost teams have to pay. That number will for sure go do, and I wouldn't be surprised to see it drop below $7000. I honestly think its easier for teams to raise a straight $7000 at the beginning of the season, and know if they make it into DChamps they don't have to worry about coming up with the $4000 in days.

There are many teams that are not able to make it to DChamps specifically for that reason. If their registration goes up a little, but they know they will not have to pay any more to go to DChamps, I think most teams would be ok with that.

In addition, I know FIRSTWA had teams pay an extra $3000 last year for registration, and that didn't include DChamps. That was just to pay the bills for running the districts. So if this comes out cheeper, and includes DChamps in the cost, I think its better for everyone.

[Madison]

One of the stated reasons for the change has been that it's less confusing for sponsors to be approached by and donate to a single "FIRST"-affiliated entity rather than for them to understand the different tiers of costs associated with the FIRST program -- HQ, regional- and district-costs, and team costs.

I dislike this approach and worry about problems it may cause for teams in the future. It makes it far more difficult for FIRST-affiliated programs to approach large sponsors for support of non-FIRST activities, for one, since they may perceive that they're already giving to the overseeing body. It also means that the relationship with large sponsors may be more centralized, for lack of a better word, denying teams the opportunity to develop relationships with smaller, more friendly divisions that are nearer to their site; relationships that may better weather poorer economic climates.

Edit:

Before, fundraising got put into running events before it got sent to teams. Now, since the cost to run the entire district is put on the teams, any fundraising FIRSTWA does is directly used to lower the cost teams have to pay.

The end result of this is exactly the same. Unless the amount of money in the system -- teams and FIRSTWA collectively -- changes, the costs to teams won't change either. The only thing that changes is the relationship the teams have with the sponsors.

[Karthik]

Added some bolding for emphasis.

Originally Posted by FrankJ

So paying First directly:

1) rookies no District champs $6000
2) Veteran no district champs $5000
3) Rookies district champs & district $10,000
4) Veterans district champs & district $9,000

PWN everybody: $10,652 maybe reduced later by some undetermined amount.

So the PWN model is veteran team are subsidizing rookies. The teams not going to district champs are subsiding those that do, by a lot. I can see how that makes budgeting & planning for PWN organizers. I don't see it making the events less expensive for the teams. Seems like common core math. YMMV

The change in cost to the teams here is solely a function of how much money the PNW FIRST organization can raise. I've put it in a chart to make it easier to see.



Going with figures quoted in the linked documents, all PNW teams will be paying between $5000 and $6800. For this money some will get two events, while some will get two events and a District Championship. As such if they only hit the high end target price, teams who don't attend the District Championship will be paying a bit more, while the teams who do attend will be saving a lot. If they hit their low end target price, then everyone is in an equal or better position than they were last season.

Regardless, I really admire the initiative and transparency being shown by the PNW folks here. Obviously this is a big change that teams will have varied reactions to based on the numbers shown above. But it's very nice to see the rationale and the numbers behind the change. I wish them good luck on their fundraising in hopes of seeing a cost savings for all teams in the district. This is model that may prove to be very valuable to the rest of us in the long run.

[Monochron]

I'm excited to see something new being tried, and really hope that costs for teams (and for the organizers) will go down.

I am curious as to how those cost are expected to go down. As Karthik said, the change in price for teams is directly related to how much PNW can fund raise. In the previous model though, I assume that PNW would fund raise for the events and then give extra funds directly to teams. Now instead of frund-raised money going to the event, teams money goes to the event and then PNW "gives" money to teams (via lowering the cost of entry).

My point is, it seems like the same money is transacting around, just on different sides. I'm not sure where any money will be saved in this model. The events will cost the same, PNW will pay the same registration cost that it's teams usually pay, and fund raised money will still enter PNW. There has to be an amount of money that leaves this equation in order for cost to truly decrease right?

I'm not well versed in financial matters so I hope my point is clear. What I'm getting at is that if the total money in / out of the old model is the same as the total money in / out of the new model, then won't there be a net change of 0?

[Monochron]

If I'm not mistaken the actual value in this comes from the elimination in competition between PNW and teams (and reduction between teams) for that fundraising money correct? By eliminating that competition (and reducing the competition between teams) PNW hopes to get more total funds from sponsors. So for most teams to see a reduction in cost, PNW is going to have to succeed in pulling in more money from those sponsors?

Reducing the competition will also likely mean that the disparity in amount raised by different teams will likely decrease correct? As sponsor money shifts from teams to PNW (which I'm only assuming will happen) then individual team funding will drop (but this will be okay because event costs will also drop).

[Andrew Schreiber]

Understand that every team gets the same amount on their bill in terms of the participation fee. The final cost on an individual team basis may end up having different values. For example, we often times get donors who are contributing to their local area schools. It is quite possible for some teams to get more directed funding than others, in which case the final net bill for those teams may differ. This is not unexpected, and is something that has been happening for years. We want to insure that you realize that your final net bill may be different than the team next door.

So, sponsors can still earmark money for specific teams/regions/classifications of teams?

[Steven Donow]

Originally Posted by Monochron

I'm not well versed in financial matters so I hope my point is clear. What I'm getting at is that if the total money in / out of the old model is the same as the total money in / out of the new model, then won't there be a net change of 0?

The net change of total expenditure is 0 (except I'm unsure as to what the $256,000 'program fee' to FIRST is), but the cost to teams is (theoretically) less.

[Madison]

Originally Posted by Steven Donow

The net change of total expenditure is 0 (except I'm unsure as to what the $256,000 'program fee' to FIRST is), but the cost to teams is (theoretically) less.

As I understand it, the program fee is a payment to FIRST that, effectively, covers losses to FIRST because money from teams is going directly to the district governing body rather than to HQ. It's not unlike a licensing fee.

[Karthik]

Originally Posted by Steven Donow

The net change of total expenditure is 0 (except I'm unsure as to what the $256,000 'program fee' to FIRST is), but the cost to teams is (theoretically) less.

Originally Posted by Madison

As I understand it, the program fee is a payment to FIRST that, effectively, covers losses to FIRST because money from teams is going directly to the district governing body rather than to HQ. It's not unlike a licensing fee.

It's probably not a coincidence that the $256,000 program fee to FIRST is equal to 64*4000, which is the number of teams that compete at the PNW Championship times the event registration fee.

[XaulZan11]

Originally Posted by Karthik

It's probably not a coincidence that the $256,000 program fee to FIRST is equal to 64*4000, which is the number of teams that compete at the PNW Championship times the event registration fee.

Karthik is correct. This is not a coincidence: "We are have a new $256,000 fee that is due to USFIRST as our program fee. This new program fee is going to replace the registration fees for the PNW District Championship. The good news for all of our teams is that no additional fees are due when you make it to the District championship. That has become an expense item in the WFR budget and is now part of team participation fee. It adds $1,684 for each of our 152 existing teams. If we grow or shrink teams, the $256K is still a fixed expense that we will owe to USFIRST."


It seems that they are banking on the idea that this new system will be easier for the sponsors to understand so they will be more willing to give out more money (opposed to be being confused about the differences between sponsoring USFIRST, WFR, PNW, specific events...).

[Monochron]

Originally Posted by Steven Donow

The net change of total expenditure is 0 (except I'm unsure as to what the $256,000 'program fee' to FIRST is), but the cost to teams is (theoretically) less.

That's the thing though, if the cost to teams is dropping then the cost to someone else has to increase right?. Who is paying more in this model?