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

[GaryVoshol]

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

Then how do you explain companies like AndyMark?

I certainly agree that FIRST could cut its prices, or get them to subsidize our purchases from key companies.

Says the man who's team can afford 4 regionals and Atlanta.

[Nate Laverdure]

Originally Posted by Tristan Lall

Let's have a source for that assertion.

I second the above. 10 mins of searching haven't revealed any such claim.

[dlavery]

Originally Posted by Tristan Lall

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.

Actually, he is not that far off. FIRST does lay claim to most (not all) things created in association with the competition. Notice that I said "competition," not "robots." The distinction is important. FIRST is taking an ever-stronger stance regarding the protection of what they consider to be their intellectual property associated with the development and implementation of the competitions. And I would not be too hasty about minimizing their chances to have their position stand up in court. Although I would never hope that it actually gets to the point of a full lawsuit to have it proven, there is an awful lot of case history and contract law that would make any litigation anything but a slam dunk (for either side).

-dave



.

[Tristan Lall]

Originally Posted by dlavery

Actually, he is not that far off. FIRST does lay claim to most (not all) things created in association with the competition. Notice that I said "competition," not "robots." The distinction is important. FIRST is taking an ever-stronger stance regarding the protection of what they consider to be their intellectual property associated with the development and implementation of the competitions.

I don't think that David was attempting to convey any such distinction—"anything...during or in relation to the program" sounds like it would apply to much more than just FIRST's role in designing the game and sanctioning the tournament. If David was speaking broadly about FIRST-related inventions and designs, and specifically including those not originating within FIRST itself, then a "slam dunk" is exactly how I would characterize it. FIRST obviously has no general claim to a team's scouting method, or gripper design, or strategic technique, even if it was "designed during or in relation to the program".

Incidentally, in these situations, what sort of intellectual property rights are being asserted by FIRST? What exactly is FIRST protecting, and what infringement are they protecting against? Copyright and trademark are givens, but not especially useful. Patent is not practical. So what's left? Industrial design protection for the blue and red colour scheme?

Tangentially, does anyone remember the old Canada FIRST Robotic Games? There was a bit of an incident with them, a few years ago, because they were using the FIRST name in a manner that definitely caused confusion, and arguably disrepute. But that was a trademark thing first and foremost, and they folded for other reasons as well.... (They were not affiliated with the FIRST Robotics Canada organization.)

Originally Posted by dlavery

And I would not be too hasty about minimizing their chances to have their position stand up in court. Although I would never hope that it actually gets to the point of a full lawsuit to have it proven, there is an awful lot of case history and contract law that would make any litigation anything but a slam dunk (for either side).

If we're talking about FIRST's own internal activities, tournament procedures and game design techniques, then there might be something worth protecting, and some legitimate claim to back it up. But I'm surprised that contract law would enter into it—unless a FIRST contractor was violating some aspect of their agreement in the process.

[JeffJ]

Amanda,

Everything you listed is good information, but it really doesn't matter in this discussion - everything FIRST does, regardless of what it is, is included in what the annual operating expenses are. If they do it with 10, 15 or 20 million really doesn't matter. What matters is they cover their expenses and have a solid funding base. It's clear by the figures in their reports that they are fully funded for all the activities and expenses you listed. The question is, why is their profit going up so much each year?
I think FIRST should keep a big cash reserve, it's smart and responsible. But if they have 25% or more of their budget already in a cash fund always available, then why do they need to keep increasing with a couple million dollars of team fees each year? $8 million just seems really high. Some seem to think a $6k registration is fee is ok. I know it keeps us from even thinking of starting a team again and makes us look at programs like botball and Vex. If they've got $8 million in the bank and would still break even with $4,000-5,000 fee then that's what the fee should be.

Also, I don't think over $20 million is "little" and I would expect an awful lot from FIRST or any non profit that has that kind of funding. ESPECIALLY if they are charging schools $6,000 to play in one event.

Originally Posted by Amanda Morrison

I'm just throwing out numbers here to help show you how large the responsibilities of FIRST really are (and this is only the FRC program, FLL is at least 8-9 times the size of FRC and much more international). And hey, even if they budget every year, I'm sure they have the same problems as every company where budgeted costs don't cover everything.

I'm just trying to play devil's advocate here to show you that there's a lot more to FIRST than what they let show at events... and it probably is even more than I wrote here. Unlike you guys, I have a hard time believing that they run on as little as they do.

[Chicago1st]

Originally Posted by David Brinza

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

Just so people are basing comments and thoughts on accurate data, understand that the FIRST cash reserve has been going up $1M or more each year, it's not $1M total - it's actually up to over $9M.

Here are the accurate figures from the FIRST annual reports:

Year - Operating Expenses - Extra Cash/Grant/recieveables/profit (whatever) in the bank
2003 - $15.5 Million expenses - $4 million extra at end of year
2004 - $14.3 Million expense - $5 million extra at end of year
2005 - $17.7 Million expeness - $5.9 million extra at end of year
2006 - $19.4 Million expenses - $8.1 million extra at end of year
2007 - $23.7 Million expenses - $9.6 million extra at end of year

Those are the figures. I agree FIRST should keep a reserve, the question is, once it's gotten big enough, should the team fees go back to a level that keeps FIRST a sustainable "non-profit" but keeps the program affordable for teams and schools?

[Chicago1st]

Originally Posted by EricVanWyk

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.

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.

For what it's worth, FIRST is a "non-profit", no doubt about that, but I do agree with David Noll that they are run like a business much more than most in FIRST are aware. That is mostly good by the way, but also brings some of the negatives of business behavior and ethics with it.

I agree with you Eric that a solid foundation should keep around 25% of their operating expenses in reserve. Problem is, FIRST had a cash reserve between 25-29% in 2002 & 2003. Then the registration fees were increased and the profit/cash in reserve went up to 33%, 35%, 40% and 42% from 2004-2007.

I'm sorry, but here's where I will somewhat "lambaste" FIRST a bit, as you but it. Where I started to have a problem with the financial status of FIRST. If they were a business and I owned stock, I'd be all for it. But it's a non profit, and I got involved because I thought it was a great program for schools and students. Then I see the non-profit generating $1-2 Million in extra revenue (profit) each year from team fees even after they've secured a cash nest egg of over 33% of their operating expenses. At the same time I see teams struggling to participate, many can't because it's too expensive and I haven't really seen the quality of the program increase with the increased revenue.

I'm going to stop, because I get worked up and upset with FIRST every time I delve into the fee structure and the business ethics, or lack of, in instances like the FLL-FTC relationship. I am troubled by the direction of FIRST, but I love the program - or at least the program I thought it was and know it was a a few years ago. Just wish it was managed like a non-profit trying to follow it's great mission, not a business trying to increase it's bottom line at the expense of it's customers. Sorry, just my frustrated view right now.

[David Noll]

Originally Posted by Chicago1st

I'm going to stop, because I get worked up and upset with FIRST every time I delve into the fee structure and the business ethics, or lack of, in instances like the FLL-FTC relationship. I am troubled by the direction of FIRST, but I love the program - or at least the program I thought it was and know it was a a few years ago. Just wish it was managed like a non-profit trying to follow it's great mission, not a business trying to increase it's bottom line at the expense of it's customers.

I've only known the program exists for 4 years now and I have notice a major shift just in that time period (might just be me growing up). However, before all this continues, do we know that the profit netted is from our registration and fees and not, possibly, corporate donations from POST-season? That would still make the INCOME in that fiscal year but FIRST would have no chance to spend or incorporate it until the next game year. Just curious, I hate slandering a group that has done some great things just because we all have bad info.

[TechieSam]

With the information Iv'e read here and in the FIRST annual reports, it's clear that the increased FRC registration fee has generated almost the exact amount of excess revenue that FIRST has collected in extra cash for the past 4 years.

Originally Posted by EricVanWyk

Situations vary between NPOs, but a vague rule of thumb is to keep a quarter of your annual throughput on hand, "minimum".

I checked what some other big non-profits keep in reserve, and the Girl Scouts, Boys and Girls Club, and Boy Scouts keep about 10%, 20% and 33% of their operating expenses in reserve. If those three proven and strong non-profits function at those levels, then I do have a problem with FIRST collecting an extra $1-2 million plus from team fees each year to get their extra profit/cash reserve above 33% and over 40% the past two years. This is school money, and in many cases it's my money (tax money when from entities like NASA).

Originally Posted by Chicago1st

I'm going to stop, because I get worked up and upset with FIRST every time I delve into the fee structure and the business ethics, or lack of, in instances like the FLL-FTC relationship. I am troubled by the direction of FIRST, but I love the program - or at least the program I thought it was and know it was a a few years ago. Just wish it was managed like a non-profit trying to follow it's great mission, not a business trying to increase it's bottom line at the expense of it's customers. Sorry, just my frustrated view right now.

To the earlier poster, can you clarify what you are inferring when you said the FLL/FTC relationship shows bad business ethics? I've seen people say FIRST makes bad decisions sometimes, but bad ethics sounds much worse and might not be the right choice of words.

[Chicago1st]

Originally Posted by TechieSam

To the earlier poster, can you clarify what you are inferring when you said the FLL/FTC relationship shows bad business ethics? I've seen people say FIRST makes bad decisions sometimes, but bad ethics sounds much worse and might not be the right choice of words.

I was talking about when Lego and FIRST made an agreement a few years ago requiring that FIRST charge teams more to participate in FVC than in FLL. Was the same time FIRST removed all references to FVC being for middle school kids, all to help Lego keep middle schools from moving on to FVC from FLL. Just doesn't seem right for FIRST to sell out one of their groups of schools and programs to help another. I always thought all three FIRST programs were equally important were truly a bridge to each other. But letting a for-profit company jack up the prices on other FIRST schools and teams showed me that it's was just about teams being a market for Lego to control and maximize their profits. I don't even blame Lego, they are a business, but I don't understand FIRST agreeing to it. So that's what I meant about running the organization like a business can also lead to some shady business ethics like we see in the real world sometimes.

It's not secret information, I learned about it last year at a meeting and a number of committee members and partners know it, but there hasn't been a lot of uproar about it so I guess it's not as a big deal to others as it is to me. But to me, I think its a sad day when FIRST or any non-profit starts looking out for the for-profit interests of corporate partners at the expense of schools and students.

[Lil' Lavery]

While FIRST cash reserves are growing, so is FIRST as a whole, and thus, their liabilities. With more teams and new and bigger events, FIRST has a lot more risk each and every year. What if the Atlanta Tornadoes had caused the Championship event to be canceled? Refunding the ~350 FRC teams their $5000 registration fee for the event alone would be $1.75 Million, and then tack on FTC and FLL on top of that. I'm sure finding a new venue at such short notice would be equally as expensive, and not really feasible for most teams unless it was in Atlanta as well. What if FIRST loses a major sponsor such as NASA due to government policy changes? What if the new control system has a major malfunction and all teams need a replacement and/or upgrade of a specific part?
As FIRST grows, so does it's need to have a cash reserve.

[Chicago1st]

Thank you Amanda, that makes me feel better. I had to believe some in FIRST knew it was "wrong" to sell out one of their programs just to help Lego and Pitsco.

Originally Posted by Amanda Morrison

Trust me on this one - you're not the only one.

[TechieSam]

Originally Posted by Amanda Morrison

Quote:
Trust me on this one - you're not the only one.

He's certainly not. I am shocked. I don't know what else to say other than FIRST has sold out one group of teams and schools, and by raising prices on them? Just to help Lego protect a market? Sad day for FIRST - they should be looking out for the best interest of their teams, not their for-profit partners.

[Daviddavid]

As mad as I've been at FIRST over the switch from Vex, now I get it. There didn't seem to be any reason for FTC to drop Vex, since everyone seems to like it and it's great for schools - but now it all makes sense, it wasn't done to help schools or teams, it was done to help Lego Pitsco.
Unbelievable. Make us pay more to help Lego make money.

[GeorgeTheEng]

Originally Posted by TechieSam

There have been some innacurate assumptions and statements made here. I'm not an accountant, but I have worked on a Regional Planning Committee and do know some of the real answers. I can assure everyone that:

- FIRST does NOT lose money, if they did they would show a loss on the report and they wouldn't have a cash fund in the bank
- The registration fees DO NOT go to pay for the Regional Events for any of the three programs
- The planning committee have to raise every penny for the events

I'd like to add a quick clarification to this. It is true that Regional Events are expected to raise all their own funds. But in the end, the contracts are signed with FIRST as a legal entity, not the Regional committees (who may or may not be their own 501c3 organization). What that means is at the end of the season, FIRST is ultimately responsible for those expenses. Most regionals do a VERY good job of raising there funds, but there are regionals that cannot generate enough sponsorship to completely cover costs. Those bills are still paid.