Kevin Standlee (kevin_standlee) wrote,
Kevin Standlee

More About Worldcon Supporting Memberships

This material is adapted from a post I made at Making Light to refute the assertion that this year's Worldcon is Rolling in Dough from all of those extra Worldcon supporting memberships, presumably being made by people who think that the cost incurred by the Worldcon to service each supporting membership is Zero, and therefore the $40 revenue is "pure profit." This assumption is wrong, and I went back through the data I have to show how wrong it might be.

I do not have access to any recent Worldcon's detailed figures. I do have fairly decent access to ConJose's 2002 data, and I did a number of the mailings myself. We used International Surface Air Lift for the non-USA items, which ranges from $3.20-$6.60/pound but (a) is still a lot more expensive than the old sea mail options (which don't exist anymore) and (b) requires a lot of effort on the part of convention committees, not all of whom can be assumed to have bulk-mailing gurus. (For example, I drove ConJose's international mailings from where we put them together to the San Jose office were our permit was located, "entered" them there, then drove up to South San Francisco and the USPS facility there in order to get the cheaper "drop shipment" rate. (Not ever Worldcon is going to be close enough to a drop-shipment entry point to be able to do this.)

For the analysis below, I'm assuming zero marginal cost for additional computer hardware; it's part of the convention overhead, and is covered by whatever isn't eaten up by variable costs. That is, I'm only trying to come up with the variable cost associated with each membership.

ConJose's supporting membership cost was $35.

Figures are rounded, not exact, and are sometimes a little less than what I show here because I'm trying to not let the discussion get lost in the weeds of arguing over pennies.

"Profit" is a technical term meaning "excess of revenue over expenses." Yes, SFSFC, ConJose's parent organization, is a non-profit corporation. That doesn't mean that it's required to lose money. It means that any surplus (profit) is to be spent on the organization's non-profit, tax-exempt goals. Anyone who wants to start quoting individual dictionary definitions of "profit" and claim "plain meaning" is hereby invited right now to Get Lost because you're focusing on the definition of a blade of grass when I'm discussing a golf course with an adjacent prairie grassland. Really, honestly, you're allowed to use the word "profit" in its technical sense in financial statements even if your legal form is what most people call a "non-profit" corporation. (Besides, technically, SFSFC is a "Public Benefit" corporation, that being California's name for what some states call "non-profit" and others call "not-for-profit," all of which are the same effective legal form as I've never found any meaningful difference between them, nor have I ever seen any state that has multiple such forms simultaneously. It's a semantic difference, not a substantive one.)

ConJose didn't break out the domestic/international shipping costs in the budget, and therefore all of the costs below are averaged across all members. Obviously, that means that US members cross-subsidize non-US members. I can't provide the cost per US member separately from the non-US members. I would if I could. Also, the costs of postage, particularly international mailing from the USA, have increased substantially since 2002, and I don't know how to recalculate the costs.

Here's the "worst-case" 2002 scenario: a site-selection voter who is thus a member from Day 1 and gets every progress report and also the post-con mailing of souvenir book, Pocket Program, and other at-con printed publications, plus a membership badge. (We gave every member a badge, including the non-attending members.)

Pre-con Publications & Postage: $6.50/member (~$32,600 / ~5,000 total advance members)

At-Con Publications: $8.50/member (~$51,000 / 6,000 copies printed)

Membership Badges (including pouches): $2/member (~$12,000 / 6,000 badge sets)

Post-Con Mailing: $6.50/member (~$4,700 / 715 non-attending members)

Average marginal cost per non-attending member: $23.50

Average "profit" per supporting member: $11.50 (approximately 33%).

A member who forgoes any pre-con mailings can increase the "profit" to about 50%.

Assuming a current Worldcon is broadly similar, then each supporting membership to this year's Worldcon is going to cost the convention as much as $26.50 to service and contribute approximately $13.50 additional usable "free money" usable to cover convention fixed expenses.

This doesn't include the cost of any special mailings like the Hugo/Site Selection ballot mailing, by the way. But OTOH, current Worldcons have only a two-year lead time and fewer pre-con publications, so it may balance out.

So the analysis suggests that there is roughly $70,000 in additional usable surplus (after paying the costs of servicing the additional memberships) for Sasquan from all current supporting memberships. While this is obviously welcome enough, also isn't nearly as much money as you might think it is. A modern Worldcon is going to cost on the order of $1 million, and thus this amounts to about 7% of the Worldcon's total budget in extra money. It's good, but it's not the Mountain of Cash that some people seem to think it is.

Again, it's not that Sasquan is unhappy at getting more money. (When you have a convention center that charges $1/day/chair to rent the chairs in the function rooms and similar nickle-and-dime charges, you need all the money you can bring in.) It's just that people have been assuming that there's a lot more money available to spend than there really is likely to be.
Tags: budget, conjose, worldcon
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