FIRST has $8 Million?!? What did I miss?

[Tristan Lall]

As a 501(c)3 foundation, FIRST also submits IRS form 990. It's a matter of public record, and contains some more specific financial details.

(By the way, for older FIRST 990s, go here and enter "222990908" in the EIN field.)

[GaryVoshol]

Originally Posted by Tristan Lall

As a 501(c)3 foundation, FIRST also submits IRS form 990. It's a matter of public record, and contains some more specific financial details.

Look specifically at page 20 of that document.

Amanda needs to add another zero to her estimate of awards costs.
It cost over $900,000 to make the fields, plus nearly another $.5M to ship fields and robots (drayage costs).
Well over $2M in KoP costs not covered by donations.
Lots of $$$ for kickoffs, regionals and Championship.

[ahecht]

That tax return covers the 2006 season, when there were 1133 teams and 33 regionals. Some interesting numbers:

KoP cost to FIRST per team: ~$2000
FRC Regional cost to FIRST per event: ~$150,000
FRC Regional cost to FIRST per team: ~$4400
Shipping/Drayage cost to FIRST per team: ~$425
Playing field cost per team: ~$800
Championship cost per team that went (258 teams): ~$7300

Sounds like your $6000/$4000 registration fee goes a long way

[Rick TYler]

Originally Posted by ahecht

That tax return covers the 2006 season, when there were 1133 teams and 33 regionals. Some interesting numbers:

Gold star! Doing the research is just as important as doing the math!

[Daviddavid]

The FIRST person I talked to at the Davis Regional did tell me that the local committee needs to raise about $200,000 to hold an event and that none of the registration fees from teams at that event go towards that amount. So a 50 team regional sends FIRST about $200,000 and the teams send FIRST $300,000 in registration fees. So the event generates $500,000 but costs much less.
I think FIRST should have extra cash in the bank, that sounds smart. But after 3 million, or 5 million or now 8 million, when do they stop buliding that cash account at the expense of team fees? Now that they have $8 million, they should reduce the fee back to $4,000 or $5,000 like it used to be to help more schools be able to afford to join FIRST or start a FTC teams. If they don't lower it, they're just going to add another $2 million in profit next year which is money coming from schools and sponsors like NASA and GM, that doesn't make sense. If it's not needed, let the schools keep the money for parts and travel.

[Madison]

If FIRST reduces registration fees in recognition of this $8M y'all think they keep in reserve, it may actually encourage growth.

More teams competing will require additional regional competitions; more fields, more staff, and larger transportation costs.

FIRST will collect less money and have increased expenses. That ought to work out well for everyone.

[Daviddavid]

That's funny M.

I'm not an econ major, but I know many companies find they make MORE money if they lower the price a bit so more people can buy it. Per team costs should always go down the more teams they get, and if more teams can play and pay $5,000, then their revenue wouldn't go down either. Doesn't change the fact that they already have $8 million in reserve and should stop using team fees to build a bigger cash fund. Sorry, just seems what they should be doing if they're a non profit and the mission is to get more schools to do FIRST.

[Danny Diaz]

Originally Posted by JaneYoung

If this were to be pursued, it could have an educational aspect attached to it. How does the non-profit work and what has to be in place for that to work? How does the reserve work? What impact does the budget, the amount in reserve have on soliciting/keeping sponsorships, vendors, venues, political support, global support/recognition? An overview/big picture and some details involved in the business aspect/funding.

That would be cool. The business plan/package is a large part of every team, every event and regional planning committee, and FIRST.

If they were to share some of their thoughts and expertise with the FIRST community, it would be beneficial and clear away myth and misperceptions.

Wow, what a GREAT idea! FIRST has a couple years' experience as a 501(c)3 (intentional understatement), it would be beneficial to teams for FIRST to explain what it means to be a 501(c)3, how it handles its fundraising, how it handles its growth, and so on. Almost a Chairman's Award presentation by FIRST for the teams...

Of course, I think it would be awesome for FIRST to release a "State of the Union" - to make public what it's doing with respect to future growth (new tournaments/events), future technologies, sustaining, and others. If they didn't have 501(c)3 status, they could be a publicly traded company, and then we could buy stock and get investor updates/information!

-Danny

[David Brinza]

Having some reserve is important for any organization or program. The loss of a major sponsor can wreck havoc in this program. Suppose NASA, because it's own budgetary issues, is not able to support FIRST at the current level next year. This may impact grants for rookie teams, but more importantly, reduce sponsorships for regionals.

This modest ($1M?) reserve gives FIRST some flexibility in dealing with these sorts of situations without having a meltdown.

Having a BLACK number on the bottom line is MUCH better than a RED number. That's about all I know about business .

[ebarker]

Originally Posted by Danny Diaz

Wow, what a GREAT idea! -Danny

Absolutely. !! Jane's idea is sheer genius, certainly the best idea in this thread. I hope it happens.

[JaneYoung]

Originally Posted by ebarker

Absolutely. !! Jane's idea is sheer genius, certainly the best idea in this thread. I hope it happens.

Thank you, but that's not genius, that's common sense...
and Beth and Amanda have each been known to make miracles happen - they could work on something, if opportunities presented themselves.

[Wayne C.]

Originally Posted by M. Krass

If FIRST reduces registration fees in recognition of this $8M y'all think they keep in reserve, it may actually encourage growth.

More teams competing will require additional regional competitions; more fields, more staff, and larger transportation costs.

FIRST will collect less money and have increased expenses. That ought to work out well for everyone.

I don't think we will ever see a day when FIRST reduces registration fees. As a matter of fact, since we are changing control systems again, I predict we will have substantial increases in registration fees. I think that question would be a good one to put to the leadership in Atlanta next week- what will registration for 2009 be? I'm curious to hear the answer.

[EricVanWyk]

I'm taking "Introduction to Non Profit Organizations" this semester. Last week was focused on cash reserves. Also, my final report is a paper and a presentation on FIRSTs organizational structure and cash flow. As such, I've looked into this a little bit, though I will admit that most of my research is still ahead of me...

A healthy NPO (Non Profit Organization) absolutely needs a cash reserve much more than a for-profit does. As Tom and several others have already pointed out, a cash reserve protects against "rainy-day" and "disaster" events. It is also necessary to keep a reserve on hand even for non-emergencies, to keep the gears turning.

Situations vary between NPOs, but a vague rule of thumb is to keep a quarter of your annual throughput on hand, "minimum". After reading half a tree worth of horror stories of NPOs that tanked due to insufficient reserves, I'm glad FIRST has a bit in the bank.

My guess is that the rapid rise in the reserve is the result of a combination of bringing in experienced professionals and a wake up call to the potential danger they were in. I'm not sure if I agree with the rate at which they are correcting, but I do agree that it needed to be increased.

Unfortunately, a minimal "safe" reserve level will almost always look to be selfishly large to people outside of the NPO community. This can sometimes make it harder to find funding, as the backlash in this very thread clearly demonstrates. Many NPOs repurpose these assets by adding restrictions to them or creating endowments, partially in order to mitigate the negative PR they generate.

Lastly, before we lambaste FIRST for this, lets all take a moment and look at the reserves universities keep and the rates they charge for tuition. I won't say the two are apples and apples, but it is a similar concept.

[David Noll]

Originally Posted by Daviddavid

I'm not an econ major, but I know many companies find they make MORE money if they lower the price a bit so more people can buy it.

Your word choice was right, FIRST is a business. They claim rights to anything invented or designed during or in relation to the program and they are not-for -profit not non-profit. Don't get upset that the great FIRST is holding out on us, they are a company, but they are a company with a good reason for existing.
At the same time- I certainly agree that FIRST could cut its prices, or get them to subsidize our purchases from key companies. And it would certainly inspire the ideas of FIRST to disperse across the world but maybe thats something that the next generation of FIRST leaders/volunteers (those graduating high school and college) need to try and get changed.

[Tristan Lall]

Originally Posted by David Noll

Your word choice was right, FIRST is a business. They claim rights to anything invented or designed during or in relation to the program and they are not-for -profit not non-profit.

Let's have a source for that assertion.

In any case, even if they did do such a thing, they wouldn't have a prayer in litigation.