Who Gets the Money?There are three major "traveling" SF/F conventions (Worldcon, World Fantasy Con, and Westercon) and a handful of others, including CostumeCon, Corflu, SMOFCon, Potlatch, Ditto, and some others; DeepSouthCon is a traveling convention with which the author has no first-hand experience and which he will not otherwise reference here. Usually (but not always), there is a "local" convention, and sometimes several conventions and/or local fan organizations or clubs in the area where the traveling convention is held. How the Traveling Con interacts with the Local Group depends a lot on circumstances and on who actually organized the event. This article is an attempt to cover most of the likely situations and to describe how other areas have handled the situation.
DisclaimerThis article reflects the author’s opinions and biases but facts are stated to best of his knowledge. The author acknowledges that he may be wrong, and because he is/was personally involved in some of the examples cited, may be inadvertently misrepresenting the situation due to his own personal bias. No personal offense is intended toward anyone, and he welcomes corrections of errors of fact. In short, if you think the author is wrong, assume incompetence before malice, please.
Who Does the Work?Major Traveling Cons are generally too large in scope to be organized solely by "locals." Even major metropolitan areas with large, experienced conrunning groups (Boston, Los Angeles) cannot credibly support "must live within driving distance" committees. These committees may be chaired by and have management staff locally, but they also probably include high level management staff -- chairs, division managers, etc. -- from outside the local area. Generally, there are also many people participating from the local area -- but there are also plenty of line-level volunteers from out of town. Strange as it may seem, there really are people who are willing to fly from Sydney, Australia to Glasgow, Scotland at their own expense and spend most of the weekend cooped up in a video production truck out back of the convention centre. (That's a real-world example, describing John Maizels, Interaction's area head for video production.)
A key think to remember is that -- with exceptions, usually when there is no local fan community to speak of, like in Hawaii -- this isn't a case of some Outside Group marching in to organize an event the way Creation Shows rolls into town with their canned pop-culture gate shows. It's a situation where you pull together a team of volunteers from the local group and from elsewhere to organize a convention that would otherwise be beyond the means of either the locals or the out-of-towners. The essence of this is cooperation, not competition.
This article first details the major traveling conventions and their own specific requirements, then looks at the major ways in which a traveling convention can interact with the local groups. Never forget that these are generalizations, and it is not difficult to find or construct specific cases that don’t fit the general one.
Organizational FormsFor this discussion, we assume that all of the groups involved, whether they are clubs or groups established specifically for conrunning purposes, are non-profit societies (you may prefer the term “not-for-profit”), corporations, or unincorporated associations. We further assume that even if they are not actually registered with the US Internal Revenue Service as a section 501(c)(3) organization, they probably meet all of the substantive requirements of the IRS rules for such organizations. This means that the groups are not organized for the purpose of earning a profit for shareholders, owners, or members. This does not mean that events organized by the group cannot have a surplus of revenue over expenditures; indeed, if the group is to be self-sustaining, it probably should generate an operating surplus.
Specific technical requirements for non-profit/charitable organizations differ by jurisdiction. It is more difficult to get the equivalent of 501(c)(3) status in Canada, and even more so in the UK. However, it is still possible to organize groups not for profit in those places; they just may not be "charities" in the sense that US tax law assumes 501(c)(3) groups to be. For example, CWSFA (Westercon 58’s parent) is a non-profit society under the Alberta Societies Act, and UK2005 Ltd. (parent of the 2005 Worldcon, Interaction), is a "company limited by guarantee," whereby the directors personally guarantee the organization up to a limited amount (in this particular case, £1) but otherwise manage the organization not for personal profit.
Rules Regarding Disbursement of Surplus FundsDifferent conventions have different rules and traditions for handling surplus funds. The groups winning a bid to host a traveling convention are assumed to have accepted the rules of those organizations and must operate under them. The issue that it is difficult to enforce such requirements other than by persuasion is beyond the scope of this document. For purposes of this discussion, we assume that people will do as they promise to do without having to be compelled legally to do so. The author prefers to deal with such people anyway.
Worldcon has general guidance as to the appropriate ways in which a Worldcon committee should spend its surplus, in Section 2.9 of the WSFS Constitution: “Each Worldcon or NASFiC Committee should dispose of surplus funds remaining after accounts are settled for its convention for the benefit of WSFS as a whole.” (timill reminds me that Worldcon Business Meeting Resolution 1982-1 gives further guidance as to what WSFS means by this.) The Constitution further requires that Worldcons submit annual financial reports to the Worldcon Business Meeting until such time as any operating surplus is exhausted. In addition, a private arrangement between Worldcon committees known as Pass-Along Funds (not regulated by WSFS) commits Worldcon committees who participate to divide at least half of their operating surplus among the next three Worldcons who also commit to the same arrangement. It appears that the legislative intent of the WSFS Constitution is that Worldcon committees should spend any surplus they have in a timely matter, and on projects of benefit to fandom, not hold them indefinitely, and particularly not use a Worldcon surplus to pay for a subsequent Worldcon bid by the same group.
Westercon does not address the use of convention surplus funds in the detail that WSFS does for Worldcon, nor is therea a Pass-Along Funds agreement between Westercon committees. Westercon does require bids to be from non-profit organizations (the rule technically only restricts US bids to be from non-profits; the author of this article thinks this is due to a misunderstanding of Canadian law regarding non-profit societies). Few, if any, Westercons have had sufficient surplus funds for the use of an operating surplus to become a matter of general interest, so there is little precedent to consult when determining the proper use of such surplus.
World Fantasy Convention is significantly different from the previous two events. It has a Board of Directors (the other two conventions are much more loosely organized), and that Board imposes a lot of very specific operating requirements upon committees. However, it does make it clear that the entire financial risk and all of a WFC surplus is within the hands of the operating committees, not the WFC board. To that extent, WFC committees have a much freer hand to spend any operating surplus than would the groups operating the other two major traveling conventions. Indeed, at least one WFC bid was organized explicitly as a profit-making enterprise, not by a non-profit organization.
Other Traveling Conventions are small and generate such small amounts of money that the opportunities for a substantial operating surplus are minimal. While there have historically been cases where All Fandom Was Plunged Into War over a few dollars, the author of this article considers such cases to be not worth considering; however, the risk-reward tradeoff detailed below applies equally to such small surpluses.
1. Local Group Bids and Runs Traveling ConSometimes, the Local Group is the entity that bids for and organizes the traveling convention. For example, OSFCI (parent non-profit corporation of OryCon) has bid for and organized several Westercons. Organizationally, you might consider this to be the easy case. The locally-based organization takes on the financial risk and is ultimately responsible for the work of putting the convention together. It recruits the team of volunteers, including committee and staff from locally and out-of-area. When the event is over, it may have a surplus of funds, which (subject to any rules under which it may have obtained its franchise, such as the Worldcon requirements on financial reporting, or other commitments such as Worldcon Pass-Along Funds) it can use as it sees fit. For example, it might establish a reserve fund for its ongoing event, or endow a scholarship in the club's name, or buy capital equipment that the annual convention has never been able to afford.
Another example of the “local group” bidding for the traveling convention was Westercon 44, which was combined with V-Con 19. (See the next section for more discussion of this case.)
2. Separate Legal Entity Bids and Runs Traveling ConSomewhat more common is that fans interested in conrunning establish a separate legal entity for the purpose of bidding and running a convention. This entity may not run an ongoing, annual convention or other event, but instead specializes in traveling conventions. Examples of this include:
SFSFC (SF Bay Area; 1993, 2002 Worldcons; 1998 World Fantasy Convention; 2000 Westercon; 1997 Corflu; 1999 SMOFCon)
SCIFI (Los Angeles Area; 1984, 1996, 2006 Worldcons; 1999 NASFiC; at least one Westercon and SMOFCon)
MCFI (Boston Area; 1980, 1989, 2004 Worldcons; 1999 World Fantasy Con; 1986, 1997 SMOFCons; Ditto 11)
These groups are based in the indicated geographic regions, and usually have numerous members from that area, but also draw upon people from other regions. For example, two of SFSFC's directors live on the US east coast.
These groups usually do not organize annual events. They may have close ties with other groups, including overlapping membership even at the highest management level, but they are legally separate organizations. SCIFI, for instance, is often closely identified with LASFS (which, among many other things, runs the annual Loscon). MCFI is often closely associated with NESFA (runs annual Boskone). SFSFC does not have a close association with another conrunning group; however, for a long time, one of its directors was also the principle director of BayCon. SFSFC's President is also Treasurer of the Bay Area Science Fiction Association, but BASFA is such a whimsical group that such association can be considered trivial. (BASFA does use SFSFC's PO Box as its address of record for the minor things that require a contact mailing address.)
In situations like this, the separate conrunning group may exist for the practical reason of "firewalling" the local group from negative consequences of a disaster. Traveling cons, especially the larger ones, have substantial risk; generally speaking, they are much more uncertain than an annual event with an established history. In the event of a catastrophic event, failure of the traveling convention will not pull down the local club/convention with it. The hazards of this can be seen with Westercon 44 in Vancouver, which was held in conjunction with V-Con (as mentioned above) and under the auspices of V-Con's parent society, WCSFA. WC44 had significant difficulties, lost approximately CAD20,000, created tremendous difficulty for WCSFA, and nearly destroyed V-Con.
Note that even when there is a separate legal entity involved, one generally expects to recruit help from "the usual suspects." There is, after all, a limited pool of qualified convention runners. A sensible organizer asks the best people to help, regardless of whether the live within easy driving distance of the convention site, as long as they can make a positive contribution to the event.
Once the event is over, and assuming that a catastrophe doesn't lead to the "firewall" being invoked (i.e. the conrunning convention going bankrupt and liquidating itself, but shielding the local ongoing group from further negative consequences -- that's a doomsday scenario, but it's always a possibility), the question arises of what to do with a surplus, if any. There are always multiple options. The conrunning group may use any surplus to help fund other events or bids. (Remember that using Worldcon surplus funds to pay for a future Worldcon bid is considered improper and will lead to negative political consequences for the bid so endowed.) For these examples, we assume that the sponsoring organization has met all external requirements like Worldcon financial reporting.
The sponsoring organization may make donations to local groups whose help was instrumental in making the convention happen. For example, MCFI made a post-Worldcon grant to NESFA because NESFA let MCFI use the NESFA clubhouse rent-free. SCIFI made a big donation to LASFS after the 1984 Worldcon that helped pay to air-condition one of the two buildings that make up the LASFS clubhouse, again because LASFS gave SCIFI rent-free use of their building. (And in both cases, vast numbers of NESFA and LASFS members worked on the MCFI and SCIFI events.)
SFSFC has made donation grants to various fannish good causes, but has not made many donations to fund the "local" cons -- BayCon and SiliCon -- mainly because neither convention has asked for anything from SFSFC. It seems plausible that had BayCon asked for some sort of specific-function grant from SFSFC, they could have gotten something -- BayCon gave ConJosé and the Bay Area Worldcon bid before them free use of a function suite for several years running for use as a party room.
3. Separate Legal Entity; No Local GroupThe outlier case is when there is little or no local fan group activity or local fan involvement with the conrunning entity. SFSFC ran the 2000 Westercon in Hawaii and 1999 SMOFCon in New Orleans. In this case, there is little interaction with the local fan community, and no expectation that the conrunning entity will make grants or donations to the local fan group.
ConclusionsIt is clearly traditional for a local-but-separate conrunning organization to make some sort of donation (sometimes a substantial one, like the LASFS air conditioning) to a related local group. Such donation is almost inevitably a function of how closely associated the local group is to the conrunning entity. There is no tradition of the conrunning entity simply "handing over the store" to the local ongoing group or club.
From a practical perspective, the most likely way for a local club or conrunning group to position itself to receive surplus grants from a traveling convention held in their area is to get involved with working on the event. The closer you work with the convention, and the harder you work on it, it more likely it is that the event will generate the resources for the local group. There is even a risk-reward tradeoff visible above; a local group can take all of the risk and work, some of it, or none of it, and should expect a commensurate involvement in the distribution of any windfalls.
In a very roundabout way, this is a version of the story of the Little Red Hen. If you want to help eat the bread, it's best to help grow the grain, gather it, thresh it, grind it, and bake the bread. If you do none of these things, you may still be given a piece of bread at the end, but the more you work, the more likely it is that you'll be sitting at the table when the meal is served.
Permission granted to redistribute this article as long as author credit is retained. The author, Kevin Standlee, does not want someone else blamed for his opinions.
Update, October 29, 10 AM: Numerous spelling and grammar fixes, and updates of fact and additional references that people posted as comments to the LJ entry corrected. There may be more corrections or additions later.