(or, “Crackpot financing schemes and why we love them just as much as we hoped we would”)

Note: This article was originally published in Progress Report #1 for Chicon 7

So, everyone reading this remembers that Chicago ran for the 2008 Worldcon and lost, right? Lost by 12 votes, right? Out of like 1600 votes cast, right? Right? Alright, forget about that. The thing that is important is what did we learn from this experience? Quite a few things, actually…but the one that matters now is the cautionary tale. What tale might that be? I like to call it the “What happened to all the money?!” tale.

In their current form, Worldcon bids are advertising machines that are working on a two-part sales process. The ultimately more important part is the ―convince them to vote for you process, but that really doesn’t have a bearing on the cautionary tale. The “convince them to give you money” process is the one that is relevant to the story. Getting people to give you money is important, no doubt. This is an advertising campaign and those take money. For the 2008 campaign, we raised just about $45,000 over the 4 years of the bid and every dollar mattered. At the end, we’d spent over $42,000 of it. If we hadn’t convinced a lot of other people to give us some of their money, the campaign wouldn’t have happened.

So, we raised all the money we ended up needing, plus a little…so we did OK, right? Many people would say yes, but once we got to the end of it and I looked at where we were, I didn’t think so. Had we won the vote, we’d caused ourselves a serious problem. I can sum up the largest part of the problem in one word, and that word is “Friends”. The “current etiquette” is that anyone who is a friend of the bid and votes in the site selection election has their attending membership…they have to pay no more money beyond the voting fee and what they gave to the bid. Now, being a friend of the bid usually involves giving a lot more money than just the base amount, so everything should be fine, right? Well…not really.

Bids are excellent machines for spending money, especially in a contested race. The money a “Friend” gives the bid should (by rights) be spent on the bid…giving more to help the bid do more and advertise better. That benefit the friend gets is pretty hefty though. The voting fee for the 2008 election was $40. This means that each friend who voted gave the convention $40. Their upgrade to an attending membership ($80 for all other voters) was then complimentary. This process wasn’t unique to us, it was standard practice. Everyone did it. This means that 100 “friends” created a liability to the convention of $8,000, 200 would be $16,000. From talking with a bunch of bids over the last 6 years…by the time you get to the vote, 200 friends seems a pretty frequent number. For 2008, we had a good deal more.

The exact liability we’d created still makes me queasy…I can’t bring myself to type it. I can only point out how easy it is to extrapolate the math. Now I remind folks to go back and look at how much income the bid hadn’t spent, which we could use to cover the liability we’d created. The math wiz’s will have already figured out it was somewhere over $3,000. Not even close to enough. Our convention was in the hole for the cost of a car before a vote was ever cast. This promising away the convention’s income as part of the bid is rampant. Everyone did it.

In addition to the easily shown large liability for friends, there were also pretty usual give backs on the membership cost for anyone who had just been a regular pre-supporter. While this number doesn’t scale up as dramatically or as quickly as the friend number, it is the same problem. Money that was given to the bid, for the purpose of being used by the bid was then subtracted from the income of the convention. This was all a standard part of the expected behavior for purchasing a bid “pre-support”.

So, when it came time to start up the bid for 2012, one of my main goals for the bidding process was deal with the finances differently. The first change was dramatic and simple. We decided to only actively bid for 2 years and that gave us a projected budget in the neighborhood of $20,000. So, to be safe, we set ourselves the task of raising $25,000. After subtracting out the seed money from the 2008 bid as well as projections of bid dues and merchandise sales, we figured we needed to raise $14,000.

This brings us to the next change, which was also dramatic, but not simple. I wanted to delete the word “pre-support” from the lexicon of the bid. Everywhere you turned with that word, you were creating liabilities for the convention in the form of lost revenue. I wanted to focus on the word “donation”. Since we needed to raise $14,000, that meant we needed 700 people to donate $20. This was my initial crackpot plan. I wanted to have the bid set up to only solicit donations for $20 and nothing more. We had a pretty animated discussion about it at one of our initial bid meetings.

The primary concern was that many people believed that the existence of “friend of the bid” was expected to such a degree that the loss of it would cause material damage to the bid. We fought about it in a manner that felt like tooth and nail for what seemed to be most of an afternoon. In this, I think there’s another object lesson about bidding. Fear of not meeting expectations is an intense pressure on bids that works really hard to keep them from changing any existing bidding behaviors. It is a tremendously frightening thing to think of dedicating as much of yourself as it takes to run a bid and come up short for want of not doing things “in the right way”.

In the end, we compromised when some brilliant person (*cough*Helen*cough*) suggested that we set a friend rate of $100 and escrow $80 of it. This worked perfectly. The bid could focus on finding 700 people and folks could be friends or not as they chose without a large negative impact to the convention. We still had a good deal of trepidation in the run up to our coming out party at Denvention 3, mostly focused around the anxiety involved in trying something this new. We needed to make sure that people understood they were donating and not pre-supporting…which we knew was unusual so we prepared ourselves for a cold reception.

The first public hearing of the crackpot plan was at the Fannish Inquisition at Denvention 3. I had a knot in my stomach as I went through the speech and prepared myself for a whole lot of “what do you mean?” kind of push back. We got applause. None of us really expected that. Actually, our entire coming out at Denvention 3 was something none of us expected. For a bid, the Worldcon you announce at is likely going to be your best performance you will see. As such, I had this fantasy about how many donations we could take in at Denver. I shared my target with the team as we approached the convention and asked everyone to work hard to raise the money we were going to need. At the end of the convention, when we finally counted up everything we’d taken in…well, we’d tripled the fantasy number I had in my head. In fact, we’d taken in over half of the donations we’d need for the next two years. It was quite a warm reception.

Over the course of the two years of the bid…we did get some push back but we always tried to be honest and understanding. We frequently told folks if getting something off your attending membership was something they really required, they should not donate and just save their money for their attending membership and we would love them just the same for taking the time to talk with us. I think I can count the number of people who didn’t kick in without needing to remove my shoes. To my knowledge we really only had one person actually get offended at our donation model. All told, it seemed to be received very well.

So, how did the bid do financially? Well, I think we proved exactly what we wanted to prove.

Our donation income was almost dead on our “700 at $20” that we’d started this plan with and we kept our expenses almost dead on our napkin calculations from early 2008. It’s almost like we knew what we were doing, but that’s a bit much to assert…so I’ll merely say our lives were blessed. The astute among you will note that our escrow at $80 a head doesn’t quite cover the $95 conversion fee so our created liability is not entirely covered by the escrow. Well, yeah. We picked the number we thought would work at the start but when it came time for setting the voting fee and conversion rate, we just couldn’t hold it there. However, the $3,435 shortfall that represents was covered by other bid funds that we passed along to the convention, so we figure you’ll forgive us our lack of foresight on that one.

So, at the end of all that, what did we learn? We learned that fans will still donate to bids, out of the goodness of their heart without expecting anything other than thanks and love from the bid and a truly excellent Worldcon in return. We also learned that as long as you work hard to be clear about operating on donations at the bid table, you don’t encounter many problems with misunderstandings or hurt feelings. Finally, we learned that the donation model can raise just as much money as the pre-support model and do so without putting any real financial burden on the convention should you win. We hope any prospective bidders out there can take what we learned and build on it. Personally, any bid that tells me all I get for my money is their thanks, a good bid, and a great Worldcon? They’ll get at least $20 from me, maybe more.