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View Full Version : 14. CFC Life Membership - Evaluation



Lyle Craver
01-15-2011, 01:44 AM
Please post your report here

Michael von Keitz
01-17-2011, 05:43 PM
I was not aware that a committee had been formed, nor that I was Chair. The issue is essentially whether the CFC is in arrears with various provincial associations as regards the collection of life memberships. As I understand it, the CFC has been hit-and-miss over the years as to whether they submitted the provincial portion of CFC life memberships to the corresponding provincial association. The OCA is aware of at least one instance in which the CFC did forward a portion of the dues; however, historically, documentation on this end has been poor at best. It seems difficult to justify the pursuit of funds from the Chess Foundation of Canada with our records as they are, but, going forward, it seems reasonable to either have the foundation continue to forward the provincial portion of life memberships collected to the provinces, or to inform the corresponding association that a CFC Life Membership has been purchased, so as to allow follow-up on the provincial end.

Stuart Brammall
01-17-2011, 05:57 PM
Does anyone else think we should just stop selling life memberships?

Fred McKim
01-17-2011, 06:15 PM
I was not aware that a committee had been formed, nor that I was Chair. The issue is essentially whether the CFC is in arrears with various provincial associations as regards the collection of life memberships. As I understand it, the CFC has been hit-and-miss over the years as to whether they submitted the provincial portion of CFC life memberships to the corresponding provincial association. The OCA is aware of at least one instance in which the CFC did forward a portion of the dues; however, historically, documentation on this end has been poor at best. It seems difficult to justify the pursuit of funds from the Chess Foundation of Canada with our records as they are, but, going forward, it seems reasonable to either have the foundation continue to forward the provincial portion of life memberships collected to the provinces, or to inform the corresponding association that a CFC Life Membership has been purchased, so as to allow follow-up on the provincial end.

I would doubt that the CFC owes any provincial association dues based on life memberships. However, it probably would be a good idea for us to send annual notes to the associations concerning life memberships bought, so they can take whatever action they deem appropriate.

Christopher Mallon
01-17-2011, 08:17 PM
I would doubt that the CFC owes any provincial association dues based on life memberships. However, it probably would be a good idea for us to send annual notes to the associations concerning life memberships bought, so they can take whatever action they deem appropriate.

Virtually none of the provinces have any real ability to collect their own membership dues (Alberta might be an exception since they have staff). Also, does the CFC *really* want to get into the mess of being forced to de-rate or not rate tournaments because players were not current on their provincial dues at the time?

I suggested to the current OCA Exec that they look into setting up a separate account with the Chess Foundation where they could stash Life Membership dues, much as the CFC does with theirs. Not sure what they think of that now.

Les Bunning
01-17-2011, 09:54 PM
The Foundation only collects CFC life membership fees. Their is no provincial portion and it is up to the provinces to collect their portion directly from the life members. A few years ago the OCA collected a one time Ontario life membership fee from CFC life members and I paid mine at the time . David Cohen was the OCA treasurer and I have a receipt from him. Their is no doubt that many life members have not paid their provincial dues and most provincial associations do not have the ability to easily collect these amounts either annually or as a one time provincial life membership fee. I do not believe that there is an easy solution to this matter and I am not sure what dollars are involved.
Les Bunning

Michael Barron
01-17-2011, 10:29 PM
There is an easy solution to this matter - just stop selling life memberships! :)

Yes, Stuart, I'm with you on this matter... :)

Paul Leblanc
01-18-2011, 03:58 AM
A few years ago, the BCCF sold life memberships. There were about 20 or so but all of them have retired from chess. The funds were used to create a BC Chess Foundation that I manage for the BCCF.
Regarding CFC Life Memberships, as the treasurer of the Chess Foundation of Canada I receive the proceeds and we average 3 or 4 new life members per year. Gordon Ritchie was the most recent one. Of course I support continuing the programme.

Ken Craft
01-18-2011, 08:22 AM
The selling of life memberships should continue.

Egidijus Zeromskis
01-18-2011, 10:01 AM
Their is no provincial portion and it is up to the provinces to collect their portion directly from the life members.

Thus, the Life memberships (CFC and provincial) must be sold together, as normal ones are done.

Stuart Brammall
01-18-2011, 12:50 PM
The selling of life memberships should continue.

Why? We do not need the capital. I worked it out a while ago and it seemed to me that in order to break even on the life memberships (as compared to those individuals buying a regular membership) the fund would need to be making 5%... and this does not take into account costs associated with maintaining the fund. I imagine right now it maybe makes 2.5% - 3% ?

I would understand if we were trying to raise money to make an expensive purchase (website, building, that sort of thing) but that is not the case...

The fact that there are life members makes it difficult to make any changes to the antiquated fee structure... It makes the organisation highly inflexible. And, not that it matters to me personally, but the life memberships make it difficult for the provincial bodies to collect fees.

Valer Eugen Demian
01-18-2011, 01:47 PM
Why? We do not need the capital. I worked it out a while ago and it seemed to me that in order to break even on the life memberships (as compared to those individuals buying a regular membership) the fund would need to be making 5%... and this does not take into account costs associated with maintaining the fund. I imagine right now it maybe makes 2.5% - 3% ?

I would understand if we were trying to raise money to make an expensive purchase (website, building, that sort of thing) but that is not the case...

The fact that there are life members makes it difficult to make any changes to the antiquated fee structure... It makes the organisation highly inflexible. And, not that it matters to me personally, but the life memberships make it difficult for the provincial bodies to collect fees.

Actually I do agree with Stuart on this one: life membership is detrimental to CFC. Those wishing to help could always pay their membership annualy regardless if they play or not (like I do). THAT would help CFC more than life membership!

Ken Craft
01-18-2011, 01:49 PM
You need to factor in the individuals who are Life Members and no longer pay rated events or play infrequently.

Michael von Keitz
01-18-2011, 01:54 PM
Another question is whether the life membership is set to adjust with inflation, or has ever been adjusted at all. As far as I am aware, the fee structure in this category has not changed in well over a decade.

I do feel that the provincial portion should be collected at the same time as the national, but, as I said before, if the Foundation simply informs the affected province of the purchase of a life membership, then that would greatly assist in the collection of those dues.

Lyle Craver
01-18-2011, 01:59 PM
Caveat: besides being CFC Secretary I am BCCF Secretary / Treasurer

I support Life Memberships and am both a CFC and a BCCF life member. These were purchased separately with separate cheques written for each.

At the time of our membership restructuring 2 years ago, the BCCF stopped selling life memberships.

To the best of my knowledge the CFC has NEVER collected funds for provincial life memberships and this has meant a small but significant shortfall for the provinces. I'm going from memory here but believe it is something like 65 CFC life members and 25 BCCF life members so that's a shortfall of 40. How active these folks are in 2011 I can't say.

I would speculate that the situation is similar in other provinces but don't have stats to back me up.

Fred McKim
01-18-2011, 02:38 PM
Another question is whether the life membership is set to adjust with inflation, or has ever been adjusted at all. As far as I am aware, the fee structure in this category has not changed in well over a decade.



The price of a life membership depends on your age bracket and the price of a regular CFC Membership.

So yes, the life membership increases every time we increase the annual dues.

Christopher Mallon
01-18-2011, 03:02 PM
I'm sort of on both sides of the fence on the question of should we be selling Life Memberships.

However, absolutely 100 percent the CFC should be collecting the provincial portions on top of what they charge, just as they do with regular memberships. I believe in Ontario that is 15%.

If the OCA or any other province wants to simply let that go into general funds and vanish, rather than saving in something like the foundation, that's up to them, but at the CFC level, this is what must be done.

Fred McKim
01-18-2011, 03:17 PM
However, absolutely 100 percent the CFC should be collecting the provincial portions on top of what they charge, just as they do with regular memberships. I believe in Ontario that is 15%.



Chris:

At present, there are no rules in place to accommodate this, and no Provincial Associations have life memberships.

However, I think somebody (either the business office or the foundation) needs to notify the respective provincial associations when they collect a new membership.

Christopher Mallon
01-18-2011, 03:19 PM
Fred, we've been over this. The provinces in general do not have an office to call and collect money, they do not have a database to keep track of their members, and TDs do not check each province to make sure that all their players are current on provincial as well as CFC dues!

Why would the rule be any different for Life Memberships? If the province tells the CFC to collect a fee on memberships, the CFC has to do so. This is just another membership type.

Stuart Brammall
01-18-2011, 03:23 PM
It is a lot more in Ontario... 169 according to the website. So that is $1176 (not including Bob A.) that the OCA has lost out on.

Bob Armstrong
01-18-2011, 03:47 PM
Chris:

At present, ...no Provincial Associations have life memberships.



Hi Fred:

Ontario has had OCA Life Memberships for a long time, though at times it hasn't marketed them, and its records on them are a shambles or non-existent.

Lyle has indicated that BC also has BCCA Life Memberships.

Are there any other provinces with provincial life memberships?

Bob

Fred McKim
01-18-2011, 03:54 PM
Presumably, the Honorary Life CFC members would also get Honorary Life Provincial memberships ?!

Lyle Craver
01-18-2011, 03:57 PM
In actual fact it's the BC Chess FEDERATION not Association.

I'll be happy to refer the question to the Ontario Chess Federation for comment if you prefer.

Not a big deal but...

By the way one of the better things the CFC has done in recent years is to strongly encourage the provincial affiliates to use chess.xx.ca (xx = BC, ON, AB etc) as their web addresses - it's easy to remember for the non chess playing public and avoids having to remember the full name of the provincial society.

Lyle Craver
01-18-2011, 03:59 PM
Concerning Honorary members, there are many who never received these due to the fact they were already Life members. A good example is Jonathan Berry who qualified by being both a Correspondence GM and an International Arbiter - but under our rules any FIDE title holder (not sure about FIDE masters or Intl Organizers) have the right to be Honorary members.

It's never been officially determined in BC but we certainly regard Nathan Divinsky as such!

Bob Gillanders
01-18-2011, 04:17 PM
In actual fact it's the BC Chess FEDERATION not Association.

I'll be happy to refer the question to the Ontario Chess Federation...


In actual fact it's the Ontario Chess ASSOCIATION not federation. :D

Sorry Lyle, I could not resist. :D

Christopher Mallon
01-18-2011, 05:07 PM
Concerning Honorary members, there are many who never received these due to the fact they were already Life members. A good example is Jonathan Berry who qualified by being both a Correspondence GM and an International Arbiter - but under our rules any FIDE title holder (not sure about FIDE masters or Intl Organizers) have the right to be Honorary members.

It's never been officially determined in BC but we certainly regard Nathan Divinsky as such!

GM, IM, IA are the only three I believe. I suggested at one point adding WGM but it was felt that IM isn't really that much harder.... :rolleyes:

I should note that sometime in late 2005 or early 2006 I specifically instructed the office to start collecting provincial life membership dues. Not long before the office went to doing not much at all, unfortunately.

Lyle Craver
01-18-2011, 05:09 PM
Bob your response once again proves that sarcasm does not transmit well online!

My reference to the Ontario Chess Federation was in response to Bob's "BC Chess Association" when it is in fact the BCCF.

Of course I know that it's the OCA not the OCF and I apologize in advance for anyone who was offended by my deliberate slip-up!

Halldor P. Palsson
01-18-2011, 05:13 PM
CFC rates have not increased for a long time. I would like to see CFC memberships at $40 per year up from $36. At current levels of membership and rates the CFC has no resources.

Life memberships are good for the CFC on many levels.

1) annual memberships need not be collected and processed anymore for life members.
2) main ongoing cost associated with life members was the printing and mailing of the magazine, a cost which is much reduced after we went electronic.

The main issue with CFC memberships is the very high "churn rate", which is zero for life members. Churn refers to that every year 25% + or -5% is new to CFC chess.

A large portion of the 25%-30% of members that quit every year do so after 1-2 years as CFC members and about 2-5 tournmaments. Some come back after a break of so many years but many move on to casual chess, internet or quit the game outright.

Bob Armstrong
01-18-2011, 05:18 PM
Hi Lyle:

I'd second your motion: That the OCA be renamed the OCF !!

Bob A

Christopher Mallon
01-18-2011, 05:22 PM
Hi Lyle:

I'd second your motion: That the OCA be renamed the OCF !!

Bob A

It's more like a federation than an association anyway, but that's way off-topic now, plus would probably cost to change the name.

Lyle Craver
01-18-2011, 07:22 PM
All that for a rather lame joke!

On the subject of life memberships, could Governors from other provinces than BC or Ontario tell us what the practice is in their provinces?

Bob Armstrong
01-18-2011, 08:55 PM
Hi Paul and Ken:

I also agree with you that the CFC should continue selling Life Memberships ( and I think CFC should sell provincial life memberships for the provinces at the same time, if desired by the CFC member, and if not, CFC should notify the member's province that he is now a CFC life member, and annual provincial dues will have to be collected by the home province ).

I would even go further and say that the CFC should put more effort into promoting the sale of life memberships.

I believe Stuart claims a calculation that shows that life memberships do not carry their fair share of the administrative load. I'd have to see it, but I don't know how that is possible.

Life membership annually bring in thousands of dollars interest to the CFC from the Chess Foudation, where the CFC manages its life membership capital. These payments will go on for eternity - long after the member has stopped playing, and long after he is dead. Life memberships are a cash cow. No administrative cost to a dead member forever.

What makes this compelling is the counterweight Life Memberships are to the " retention problem ". CFC loses each year approximately 25% of its members - gone; never to contribute ever again a nickel to chess in Canada. But the Life Member never quits - he's an energizer bunny that pays forever, even when his battery will no longer move the pieces. If we can grow the Chess Foundation of Canada investment, we will have a large source of funds indefinitely.

I fear that in making comparisons to annual memberships, some look at the interest in a year, divide by the no. of life members, and show that each life member that year contributes only part of what an annual member contributed. This logic is faulty because of the retention problem. In two years perhaps, that annual member your so touting, may be gone, and you'll get $ 0 in 2013. But CFC will still be getting that reduced annual payment from that Life member. Life members pay annually, they just don't pay as much - BUT they pay forever.

So I'd like to see the Treasurer come up with a plan to somehow promote more the sale of CFC Life Memberships, if he is the right executive person to handle this file.

I seem to be swimming upstream on this issue, but the argument in favour of CFC Life Memberships seems pretty compelling.

Bob

Lyle Craver
01-18-2011, 09:45 PM
One thing the USCF does that we've never done is to have what they call a 'sustaining membership' where one pays twice the usual annual fee for 10 years and at the end of that time automatically converts to a life membership. (Of course if you don't then the USCF gets the benefit of your additional dues)

Another thing that would be useful is a pamphlet (which could be presented online if desired) on the subject of how to make a bequest to the CFC in one's will. Several organizations I am associated with have such fliers and even with the loss of charitable status could be of benefit.

Other items might be publicizing bequests in kind, say to the National Chess Library. Things like my complete set of Informants (at least they were complete up to the time the CFC got out of the book business!) or various first editions (like the tournament books for 1st and 2nd Piatagorsky Cup - not the Dover reprints) might well be of interest.

And always be on the lookout for a chance to do good - I was browsing the remainder bins at my favorite bookshop one day a week before our provincial junior championship and found a copy of the Wade & Blackstock Complete Games of Robert J Fischer for $2 or something ridiculous. Went to the tournament and handed it to our junior coordinator (who was also TD) and said 'Here's another prize for the kids!'

Not a big deal but worth doing when the chance arises!

Les Bunning
01-18-2011, 10:39 PM
There have been a number of studies over the years and they have generally concluded that Life memberships are a good thing for the federation. There is no doubt that long term members who continue to play get a good deal but many of our life members no longer play and this is a benefit to the federation. There is no easy solution to the provincial issue. If a life member moves to another province that province should be receiving the annual provincial dues and as the provincial dues vary there is no easy way for the CFC to collect a provincial life membership at the time it sells a CFC life membership. As pointed out both B.C. and Ontario have sold provincia lLife Memberships and if these provincial life members move to another province then perhaps the member will have to start paying annual provincial memberships again. I suppose their could be a reciprocal agreement amongst the provinces to cover these situations but it is not likely to happen. In my opinion the only solution is to leave it up to the provinces to collect the annual provincial dues if they believe it is worthwhile becaue I suspect that any losses through non collection will be minor. The Chess Foundation should notify the provincial association of any new life members to enable them to collect their provincial dues if they believe it is worthwhile.
Les Bunning

Paul Leblanc
01-19-2011, 03:23 AM
A couple of points.
Stuart, the Foundation will be earning close to 4% this fiscal year from dividends and interest. There have been substantial capital gains as well from the equity portion that will help counter the effects of inflation in future years. I think you will be very pleased when you get my annual report in May.
Bob Armstrong and Les Bunning point out quite correctly that many Life Members paid substantial sums for their memberships and no longer play chess. Those members would likely not be renewing their annual memberships but the money they put into the Foundation will continue to benefit chess ad infinitum.
Lyle, I ran a campaign last year with flyers at tournaments across the country and an article in the CFC bulletin. I did get a couple of pledges to include the CFC in people's estate planning (yay). I also got lots of suggestions to spend the capital on people's various good ideas (sheesh).

William G. Doubleday
01-20-2011, 04:38 PM
I believe life memberships are bad for the CFC's finances and should no longer be sold.

Bill Doubleday

Valer Eugen Demian
01-20-2011, 05:46 PM
I believe life memberships are bad for the CFC's finances and should no longer be sold.

Bill Doubleday

I agree! Have been saying the same thing for the past few years without too many listening...

Fred McKim
01-20-2011, 07:10 PM
It should be easy enough for somebody to do the math on this, making some assumptions about how many (percentages) stay active for 5, 10 15, 20 years,, etc

How about it Paul ? Can you do the math and show the Governors that Life Memberships are of value.

Life Member (for 35 years)
Fred

While we might argue that the CFC lost money on me, it has kept me around organizing tournaments and playing in tournaments all of those years

Bob Armstrong
01-20-2011, 07:20 PM
Hi Fred:

You may have underpaid so far, but you'll overpay from after you quit chess, up to your death, and to infinity thereafter. The CFC wins on you !!

Bob

Lyle Craver
01-20-2011, 09:49 PM
Not to mention that when Fred (and the rest of the Life Members) leave this vale of tears they will be making a permanent bequest to the Foundation.

Let us hope this is not for a considerable time yet!

Christopher Mallon
01-20-2011, 10:35 PM
Life memberships were a bigger problem back when we mailed out magazines to them - so there was an actual cost to the CFC to maintain even an inactive (or dead!) Life Member. Now that the magazine is flat-rate... I don't have as big an issue with Life Memberships.

Definitely the provinces need to be on board though! The CFC is a Federation of its provinces and should be working with them on an issue like this, when it takes so little effort to do so.

Paul Leblanc
01-21-2011, 02:11 AM
Fred, you have given me a pretty hard task because it requires a zillion assumptions about age, cost for the life membership, cost for annual membership, inflation, years of chess play before retirement, cost of servicing members, return on investment.
I will be buying a Life Membership next month. As I have just turned 61, it will cost me $360. That is equivalent to 10 years of annual memberships and the Foundation gets the entire $360 up front. Assuming we can continue to get 4% (as we are getting now), that's $14.40 per year forever going to the CFC instead of $36 per year from annual membership renewals from now to when I give up tournament chess.
The Foundation also acts as a kind of life insurance for the CFC as well. Don't forget that it was there to rescue the CFC from bankrupcy in 2008 with a bridge loan.
I think most of the governors are planning bequests to the Foundation in their estate planning, some just haven't gotten around to letting me know!