GNCC and USA Curling: Follow the money
The tl;dr …
Olympic exposure has been very good to curling. USA Curling and the GNCC have seen explosive growth. But the pandemic year was cruel to USA Curling, which is duty-bound to pay salaries and fulfill its commitments to the US Olympic and Paralympic Committee. Meanwhile, the GNCC has been taking in nearly twice as much as it has been spending in recent years, according to their 990 forms, building up a large pile of assets that wasn’t significantly diminished by COVID because it had few expenses.
Both organizations give financial aid to clubs. USA Curling gives outright grants and serves as the guarantor on the World Curling Federation’s interest-free loans. The GNCC has low-interest loans. They both loan stones — the GNCC lists the program as a revenue source with no comparable expenses, while USCA apparently loses money on its program. Whether that’s altruism or bad management is up for debate.
Compare the GNCC’s costs of $15/member (plus optional insurance) to other USA Curling regions that charge in the low to mid-single digits, and a club with a couple hundred members may be paying one or two thousand dollars more than its peers elsewhere in the country. Given the revenue base that’s grown because the GNCC is sitting on the Southeast, an area ripe for new curling clubs to take root, the GNCC could surely charge a few bucks less without sacrificing its programs.
But all of these clubs have been paying $34/member to USA Curling in addition to those regional fees, whether they’re $15 or $3, and the ones who’ve been paying $15 tend to be the ones who are questioning the $34.
Had cooler heads prevailed over the past decade, this inefficient system would have been sorted out. USA Curling does a variety of clinics and training, and new clubs have been able to take root in non-GNCC regions. But GNCC members prefer to pay extra for what they see as better programs. If only great minds could’ve been thinking alike, the organizations could’ve combined to take the best of their programs and go nationwide with them without having everyone on the East Coast essentially paying for two programs.
The GNCC has been better at creating an intangible value that has made its members willing to spend a bit more. Some of their programs don’t require much money, and they forge a nice sense of community. USA Curling creates intangible value as well, especially in the hundreds of people who walk into curling clubs after seeing it in the Olympics, and it has responsibilities to develop the sport while answering to everyone from the USOPC to the Center for SafeSport. Can it convince the average curler that these intangible values are worth paying for?
The devil in the details
The hand-written 990 form for the GNCC in the fiscal year ending March 2002 shows a small but healthy organization. Revenue: $53,922.95. (Be sure to include the 95 cents.) Expenses: $52,546.65. Net assets: $56,095.59.
In FY20, the GNCC brought in $225,381. (We don’t know how many cents.) Expenses: $127,419. Net assets: $917,282. They also racked up a six-figure surplus in FY19 and nearly $85k in FY18.
The next year was the pandemic year, and the GNCC lost money along with everyone else. But not much. With no salaries to pay and most events canceled, they had few expenses. If not for insurance, they would have had a surplus. Net assets were still over $900k, nearly triple what they were 10 years prior. (See all the 990s back to 2002 here.)
(Note: A GNCC officer has suggested that the revenue figures are overstated.)
The bulk of GNCC’s revenue is membership fees (which, unless this is somehow accounted for on another form, also includes the optional GNCC insurance program). In FY20, those fees were $198k. They also made $18.2k on their stone loan program, $6k from contributions and $3k on investments.
USA Curling has, of course, grown as well. In FY02 (ending in June), the National Governing Body (NGB) pulled in $931k. Membership fees only covered a little under $160k. Grants from the US Olympic Committee (USOC, now USOPC with the addition of Paralympic coverage) added about $345k in calendar year 2002 — the USOPC confuses us by using a different fiscal year.
Seems like something happened in 2002 besides ProPublica publishing 990 forms. Something in Utah. A bunch of people from NBC, too. Oh, right — the Olympics.
Membership fees jumped to $211k the next year. Then $313k after the next Olympics, where Pete Fenson and a young lead named John Shuster clinched the bronze medal in a game interrupted by a streaker. By FY19, after Shuster won gold, membership dues were a healthy line item of $780k. If you adjust the FY02 numbers for inflation, that’s $227k, so we’re talking about member funding that more than tripled over 17 years. And it’s not just price hikes — in 2018, then-CEO Rick Patzke estimated USA Curling had 23,500 members, up from “maybe less than 10,000” before the 2002 Olympics.
Revenues and expenses had both skyrocketed, but a lot of that came from the USOPC and went to national team programs. The Olympic overlords who threatened decertification in 2014 because the national teams weren’t performing as well as they’d like, kindly ratcheted up their contribution at the same time. In 2013, that was $892k, up from $571k two years prior. By 2018, the year Shuster and company won gold, it was $1.1m.
USA Curling posted a loss of nearly $150k in FY20, including a $69k severance fee to Patzke. The next year was considerably worse — more than $500k, though that included a curious line item of donated Nike inventory worth $283k. The 990 lists noncash clothing donations, some to Wisconsin curling clubs but the bulk of it to charity.
“Subsequent to year-end, the Association made an operational decision to contribute its remaining donated Nike apparel inventory of approximately $283,000 to local charities due to the office lease expiration which included the warehouse space where the apparel was stored.” — 2020 audited financial
(For the record, one of the charities was in Reno.)
During the pandemic, USA Curling couldn’t just shut everything down. In FY21, USCA paid $707k in total employee compensation, down slightly from $718k the year before. There are a couple of PPP loans in the mix according to the 2020–21 audited financial statement. The first loan was in April 2020 from JP Morgan Chase for $104,632. It was later forgiven, so it’s recorded as a contribution on the audited financial statement. A second loan of $112,997 in January 2021 was forgiven in December 2021, so it will be reflected on the next statement.
The GNCC, on the other hand, typically spends much of its money — that which doesn’t go to net assets — on events and the related cost of pins/awards. They have their own insurance program, and we don’t know how much money they collect from clubs, but we know they spent $33.2k in FY20. The same year, event costs were $54.6k.
As recently as 2016, the GNCC’s annual meeting showed a less promising financially summary. The outlook was that, if all went as planned, they would have the “smallest bank account in 50 years.” A figure of around $4k is given for their operating account. (On the 990, they claimed net assets of $567.8k — not being an accountant, I don’t understand how that adds up, and no, it’s not because of money in their dedicated funds. Please let me know if you can explain.) The GNCC managed to salvage a junior camp (see the fall meeting minutes) thanks to the leadership of one Dean Gemmell, now USA Curling’s interim CEO, but they canceled two of the three planned newsletters, and two adult skills camps that weren’t held.
The programs as mentioned in the 2016 fall meeting were modest — a “coach the coaches” clinic, a session on maintaining arena ice, and other clinics (another one run by Gemmell) where “we just put our names on it.”
Today, the Mentor Program alone listed 12 clinics on various topics as well as some Learn-to-Curl program help and other conversations.
Give the GNCC a lot of credit for transparency with its loans. In 2016, the Memorial Trust had outstanding loans to Petersham, Plainfield and Utica, while Chesapeake had repaid its loan early. The Legacy Trust launched with a loan to Charlotte, and the GNCC was ready to launch the 2nd Century Fund, which would give grants to juniors, especially those competing in high-level competitions.
These programs still don’t seem to be in widespread use. In FY20, the only outstanding Memorial Trust loan was to Petersham. The Legacy Trust still had the Charlotte loan and a big one ($75k) to Pittsburgh.
The GNCC also has a stone lease program, leveraging its $133.3k worth of stones to get $22.7k in revenue. Counting by rock rather than by dollar — at the 2020 annual meeting, the GNCC treasurer said the organization had 40 full sets of stones, 29 of which were on loan to nine clubs.
Meanwhile, at USA Curling …
Unless I’m incorrectly reading the audited financials, USCA loses money on its stone loans. In FY21, clubs owed USCA $281k. USCA owed the WCF $354.5k.
Interest-free loans from the World Curling Federation pass through USCA. In FY21, they had six outstanding loans totaling $750k.
Also in FY21, USA Curling issued three grants of $5k to Stevens Point, Cape Cod, and Potomac. (Yes, the latter is my club.)
Is the GNCC’s value completely captured in all these documents? No.
The GNCC has fostered a sense of community with volunteer-to-volunteer communication and a common mission of helping each other. Newer clubs swear by it; older clubs take pride in it.
So even before the Great Schism of 2022, GNCC clubs did it their way. USA Curling took care of everyone else, and plenty of new clubs came into being outside the GNCC’s auspices, but GNCC clubs were willing to pay a hefty premium to do things a bit better.
And while the GNCC’s fees of $15/member are far greater than the typical USA Curling region, they’re cheaper than USA Curling’s rate (as of this writing) of $34/member. Ideally, clubs would be part of both organizations, and the rising tide would lift all boats. The next two posts in this series will examine whether that can happen.
So what do we cut?
From the GNCC: Without the ties to USA Curling, that’s a tidy $8k-$10k of savings. The FY20 report below was obviously affected by COVID cancellations, but you can see what was intended (note that it doesn’t show the large surplus and what was done with it, though the asset sheet shows the money market account at a healthy $200k):
From USA Curling: Let’s just look at all the FY20 numbers from their audited financial report, shall we? (Note: 990 forms, which I used for the graphics above, invariably vary slightly in how they count some of these categories.)
FY20 expenses (part 1):
FY20 expenses (part 2):
Notes from the auditor:
Stones: As of June 30, 2020, USA Curling owed the World Curling Federation $421,176, and clubs owed USCA $346,469. Also, USCA agreed to pay WCF $17,136 over five years for stones that will be used at USCA championships, but that loan was paid off early.
Loans: USCA has pass-through loans from WCF with four clubs for a total of $525,000. There’s no net impact on the bottom line unless you count whatever staff resources are needed to oversee the program.
USOPC money for athletes: The USOPC gave $173,100 directly to athletes.
The million-dollar question
USA Curling has put our a membership survey saying it needs $1m per year in membership fees to fund its programs. That seems unrealistic, unless every GNCC club comes back into the fold and USCA raises rates. (But I repeat myself — unrealistic, indeed.)
So what are we all willing to pay? And for what?