How the money flows: FIRST's Enron accounting

Many teams in the regional model and district model alike are curious as to where their registration goes, especially after our dig into FIRST's finances, and today we set out to do some deeper digging on where the money goes, and whether there's savings to be had somewhere.  Let's dive-in.

Your Team

Many districts in FIRST Robotics Competition are their own separate nonprofit entities, and this enables us to pull their 990 filed with the IRS for income, as well as their own income sources.  Looking at the easiest-to-find district's, FIRST Mid-Atlantic's 2016-2017 annual report revealed something rather interesting.



This image seems to suggest that the district gets just about a thousand dollars per team, given that in the 2016 and 2017 seasons, FIRST Mid-Atlantic only had 121 and 120 teams signed up respectively.  So out of a $5,000 registration fee, your local event-runners only get about a fifth of this.

"Surely", you may be thinking, "they get their funding from that exorbitant district championship fee".  But unfortunately, nowhere in the document mentioned above did a mention of a "District Championship Rebate", though we did find a potential reason elsewhere.

In the FIRST in Michigan FAQ paper on the District model produced by Jim Zondag,  one of the questions addressed was about the DCMP fee, and Jim's response is telling.


Mr. Zondag explicitly states that their district gets no revenue whatsoever from teams attending their district championship, and none of MentorBuilt's research turned up any evidence to the contrary for any other district, or that this may have changed.  For your convenience to visualize this flow of cash, we made a handy-dandy Sankey chart.

https://i.imgur.com/RJbJFDL.png
This is yikes.  This staggering flow of cash had some of our staff members worried about whether any districts are actually profitable, or whether they'll survive year to year. We were able to pull basic financial information and legal documents for most entities containing FIRST Robotics Competition districts, and the results are staggering. 

The Bad

New England

The New England district, like many FRC districts, begin with a small initial investment of both assets and net worth, typically in the form of equipment, cash for legal and documentation, etc.  Following that though, the New England district net $187k in the 2013 fiscal year (FY), declined to $-9k, and in their last filed FY of 2015, they net $-196k.  This, however, may not be reflective of the whole story.  Their Assets went up every FY except the last filed one and we're looking at a 2-year lag between filing window, existence window, and publication window from the Internal Revenue Service.

FIRST Chesapeake

FIRST Chesapeake unfortunately seems off-for-the-worse with a negative revenue less expenses of $200k or more every year except that of their foundation.  In their last filed FY, they had $-$382k revenue less expenses and for the first time on record a negative asset quantity of $-284k.  The viability of their long-term existence is something we'll get into later.

The Good

FIRST in Michigan

FIRST in Michigan is no stranger to delicate financials. Formed during the housing crisis, they've kept a tight watch on their financial situation in collaboration with their state government making some incredible team grants accessible to everyone, in all four of FIRST's programs.  In their last FY, they filed $243k net and a blistering $1.1m in net assets.  They as an organization are responsible for all four FIRST programs, so these numbers may not be wholly reflective of the district's raw financials. Despite this, this testament to their monetary prowess leaves them with a strong foundation in the event of complication.


FIRST Robotics Canada

While likely not the organization you expected to see here, the charity responsible for the Ontario district and any Canadian regional events,  is operating at a massive surplus, with more than $836k CAD surplus in the past year.  Unfortunately, the Canadian government website doesn't have these values directly, we had calculated them, but you can check our work.  This sum may not be covering the same items as the US-filed nonprofit returns, so exercise caution with this number.

The Summary

Of the 9 districts we analyzed, only three were operating at a deficit in their last filed fiscal year, which frankly, is awesome.  If one goes back and watches the Wisconsin District town hall on First Updates Now, it was actually brought up how much FIRST expects districts to have in the bank so they can safely go back and / or survive crises.    That being said, a district running in the net negative doesn't indicate the time between their last filing window and now (they may have gotten more sponsorships or funds to level off debts), or whether they're continuing to run in spite of this deficit. 

In conclusion, the big number we arrived at here at MentorBuilt, the calculated "money in the bank" for almost all districts (including a conversion from CAD to USD) is approximately $3m USD.  So the districts aren't broke on paper for sure. This ignores certain nonprofits that service district teams or nonprofits that run regionals (like FIRST NYC) given the sheer volume and lack of clear delineation to identify them, especially given that some regionals are funded wholly through FIRST Headquarters in Manchester.

If you'd like to support your districts while browsing on Amazon, we've included AmazonSmile links for all US-districts below, that automatically donates .5% of your amazon purchase to the organization with no additional steps.

NE | CHS | FIM | FIT | FMA | NC | IN | PNW
This has been, #MentorBuilt.

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