[ivfdf-discussion] [Fwd: Report to 2008 Festival and Initial Discussion Document]

IVFDF Central Treasurer treasurer at ivfdf.org
Tue Dec 9 08:56:00 GMT 2008


Dear All,
It seems that the message below did not go out - not sure why, but as 
I've been busy getting married I've had other things on my mind. I've 
been assured that this list is working now so here goes again.

Over to you

Ian
-------- Original Message --------
Subject: Report to 2008 Festival and Initial Discussion Document
Date: Fri, 25 Jul 2008 09:04:02 +0100
From: Ian Thompson: IVFDF Central Treasurer <treasurer at ivfdf.org>
To: ivfdf-discussion at ivfdf.org

Inter Varisty Folk Dance Festival
Treasurer: Dr Ian Thompson

Treasurers Report 2008

Bank interest continues to provide good income; we had a further
donation from IVFDF 2006, Cambridge of just over £550.  We are moving to
using online banking, this retains all the safeguards of needing
multiple authorisations to confirm payments without have the round robin
of posting partially signed cheques around the country.

Accounts Statement
  <details removed for security reasons (and it doesn't paste in well)>

Future

Edinburgh 2007 is still to repay the £1000 loan plus 50% of any profit
they made.  We need to agree underwriting for 2009 as appropriate and
agree a loan for whoever is taking 2010.


Central IVFDF Financial Policy

Background

For those who have not been at IVFDF before let me provide some brief
background. Each year is a separate instance (c.f. franchise) of the
festival, groups bid to run the event in 2 years time. Each instance
gets the option of a start-up loan in the 2 years prior to running the
event, and then a year before the event has the option of applying for
and agreeing limited underwriting, to cover the situation where despite
the best efforts of the organisers that instance of the festival, it
makes a loss.  In exchange for the use of the IVFDF name (i.e.
franchise), an instance is expected to return at least half of any
profit it makes to the central fund so that it can continue to provide
these loans and underwriting for festivals in future years.  Due to the,
usually 2 year, lead in time taken to plan and organise an event there
can be a number of independent instances running at the same time; i.e.
the last year, the current year and the next year, and possibly even the
people bidding for the year after!

Current status

Taking into account the £2000 currently out on loan and possible gains
from both 2007 and 2008 festivals we now have a central fund balance in
the vicinity of £10,000. With our current fund value and present
interest rates we have an income of about £250 per year

Financial policy

Given the current status, I therefore feel that we now need to
re-examine the financial policy for Central IVFDF.  To date that policy
has centred on the principle of collating enough funds to allow start-up
or “bridging” loans to be made to each instance of the festival with the
aim of having a pot in the region of the typical turnover of a festival
(circa £10,000 to £12,000) to ensure that there were enough funds to
cope with reasonable underwriting costs (circa £1500 per live festival
instance).  The central fund must also support the administrative costs
of the central officers (Treasurer, Archivist and Development Officer),
though to date these costs have been minimal (so far around £50 over 3
years), though the role of Development Officer has not yet been
exploited to its’ full potential. Given that at any one point there may
be up to 3 festival instances in existence, then that means that if the
loan amounts we give remain at £1000 then we need at least £3000 just to
cover loans. Similarly given that typical underwriting amounts are up to
£1500 we might possibly be regarded to need at the very least another
£4500 to cover this potential liability.  Clearly with rising costs and
inflation these figures are likely to rise over future years.

Future Options

We are now reaching a point where the funds we have are likely to be
able to provide well for our needs and should therefore consider some
alternatives as regards these funds.  We should also consider a number
of scenarios, firstly that future festivals continue to be as successful
as recent years and the fund continues to grow, secondly we need to bear
in mind that there may be future festivals which aren’t as successful
and we may have to take a loss in funds one year, and therefore need to
have enough funds to accept that loss without it making a big effect on
overall operation of the system.
If we do end up in the former situation and have ongoing income I would
wish to ask the question of what we should do? I feel that we need to
find a use which helps the wider IVFDF community as a whole.  Options
include:
•	reducing the % return on profits which an instance must return to the
central pot, whilst the pot remains over a certain fixed value (or, more
future proof, a % value of average of the last 3 festival turnovers),
and allowing instances of the festival to keep more of any profit they
make. Possibly, via some sort of sliding scale of returns relative to
the funds in the central pot. Personally, I don’t think this is a good
idea as it is needlessly complicated to administer and only provides
additional benefit to those festivals who are successful whilst the
central fund remains of a suitable size.
•	Another option, and one which I might personally prefer, could be the
provision grants to member societies in respect of the travel of their
members to IVFDF.  Clearly this would have to include some safeguards
and should perhaps be targets at societies with certain needs (e.g.
smaller numbers of members unable to benefit from group travel plans or
those with longer distances to travel and therefore higher costs). Such
a scheme would have to be capped to a certain value each year and would
continue to depend on there being enough funds in the account.
•	Do you have an alternative idea?
Given that we have some time before we need to make a decision due to
being excessively cash rich I would propose the following: that a group
on interested parties taken from the IVFDF community discuss the
potential options over a specific discussion e-mail list and present
proposals back to the ivfdf-news list in time for the possibility of
making the needed changes to standing orders or constitution for IVFDF 2009.


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