ILCA is a non-profit corporation registered in Texas, USA, which represents its members from all parts of the world. Since 1972, it has been recognized by World Sailing (formerly IYRU and ISAF) as the organization rWith approximately 13,500 members on six continents, our classes are for sailors at all levels, from the weekend cruiser to top-level athletes vying for the Olympic Games. ILCA seeks to fairly represent all our members in all parts of the world, from the beginning youth sailors to masters sailors age 80 and older, and everybody in between.
As well as managing the administrative aspects of the class ILCA organizes 7 World Championships every year; Standard, Radial Women, Radial Men, Radial Youth, U21, 4.7 and Masters. Within each of these there are many divisions and typically we expect about 2000 entries to World Championships each year.
What has this got to do with ILCA’s finances? A lot.
As a non-profit entity ILCA’s aim is not to earn money but to deliver the best value possible to its members and sailors. To do this we try to run a roughly balanced budget each year, while maintaining sufficient reserves, built up over the last 50 years, to cover the inevitable variations in annual expenditure and income and give us a buffer when the “rainy days” come along.
ILCA’s Income Sources
For many years ILCA has earned its income from four main sources; membership fees, sail button fees, plaque fees and event fees. The exact income and proportion of income from each of these sources varies year-on-year, but the following is a normalized assessment to give a general idea of how ILCA’s income has been derived and spent for at least the past 10 years. Of course ILCA’s annual account summaries are published every year, which can be analyzed in more detail for those interested. It should be noted that these figures exclude funds transacted on behalf of other entities, e.g. supplier charter cost payments, World Championship host cost payments etc. Funding of ILCA is about to change somewhat with the implementation of World Sailing’s new Olympic Equipment Policy, which will be covered in the next article. The following is a bit more detail on the situation up to and including 2019.
Membership fees – These have typically made up 15 to 20% of ILCA’s income. Each of our 120+ District associations pays ILCA membership fees for their declared membership number. For the last few years this had been US$10.34 per member but for 2020 this has been reduced to US$9 per member.
Sail Button fees – Every new class-legal sail sold has a sail button attached, which is purchased by the sailmakers from ILCA. Sail button fees typically account for 15 to 20% of ILCA’s income. The current sail button fees are US$13.14 for a Radial or 4.7 sail and US$28.87 for a MKII Standard sail. The additional fee for the MKII sail is to recoup expenses related to obtaining international patent rights for the sail.
Plaque Fees – Every new class hull sold has a World Sailing Plaque fitted, which carries a total fee of US$118.25. This fee is split between World Sailing ($19.70) ILCA ($83.55) and the ILCA Regions ($15.00). Income from plaque fees has traditionally provided between 15% and 25% of ILCA’s income.
World Contest Entry and Charter fees – To cover its costs in arranging World Contests, charter boats etc. ILCA retains a proportion of the entry and charter fees from World Championships. Income from World Contest typically represents 35 to 40% of ILCA’s income.
This general income structure has been in place for many years and is considered to have fairly reflected the work that ILCA does. The largest proportion of income comes from the most active sailors, those who sail in World Championships and purchase a lot of new equipment and who are the ones who ILCA directly does the most work for through World Contest organization etc. A much smaller portion of income comes from the wider membership base that, while benefiting from the strong management of the class, get less direct benefit from ILCA as they do not get involved in World or Olympic level competition.
As noted above for income, expenditure varies from year to year, but the following is a typical overall assessment.
As with all service organizations, ILCA’s largest expense is labor costs. Other major areas of expenditure are travel and costs for the annual World Council meeting, technical, publications, office costs, bank fees and, unfortunately, in recent years legal and one-off costs.
Labor Costs – ILCA currently has two full time staff members and six part time and contract staff providing a range of support on specific areas. These include general administration, software system and website management, publicity, membership management and publications. All staff are paid at no more than standard market rates for their roles. Staff costs are generally between 50 and 60% of ILCA’s annual expenditure.
Travel – Being an international class invariably involves a significant amount of travel, both for staff and the volunteer World Council members. Travel can be associated with World Championship’s, technical inspections, World Sailing meetings and the annual meeting of the ILCA World Council. In a typical year travel and World council expenses amount to between 5 and 10% of expenditure.
Technical – Technical costs vary significantly from year to year depending on builder inspection requirements and what if any developments are being planned such as the introduction of new equipment. In recent years they have typically accounted for around 10% of expenditure.
Publications – ILCA publishes an annual handbook in hard copy, representing less than 3% of the budget. However ILCA now invests significantly more in on line, social media and website development and management, of which most of the costs are included in labor costs above.
Office Costs – ILCA maintains a business office in Texas. Office costs, including rent and office supplies, typically amounts to about 5% of expenditure.
Bank Fees – With the majority of ILCA’s transactions involving international money transfers (World Championship entries and host costs are the prime examples) associated bank and foreign exchange costs are an inevitable item and usually amount to between 5 and 7.5% of our budget.
Legal and one-off costs – As most members will be aware, ILCA has been involved in legal issues for a number of years relating to disputes between the builders and latterly issues with the non performance and ultimate removal as a builder of Laser Performance. All these have required the class to employ outside legal services. In 2018 and 2019 we have also spent a significant amount of money on the Laser Olympic reselection effort and on developing the consequent new builder processes and contracts. Legal and one off costs have varied considerably from year to year and have been mitigated to a significant extent by pro bono and volunteer contributions from members but still amount to many hundreds of thousands of dollars over the last decade.
In a similar manner to income the general structure of expenditure has been in place for many years. As noted above many of the costs relates to our most active sailors, particularly staff time and related costs in organizing World Championships and dealing with the obligations of being an international and Olympic class.
In our next article we will look to outline what the future holds for ILCA’s finances with the introduction of the new builder process.