[Linux-aus] DRAFT Financials for 2007/07-2008/06

[Anthony Towns]

On Thu, Jan 08, 2009 at 12:11:12AM +1000, Anthony Towns wrote:
> I have a similar PDF prepared for the period from 01/07/2008 to 31/12/2008
> (ie bringing it current) which I'm forwarding to the council for review,
> and hope to present at the AGM.

So while all the details from that will sadly have to wait for the AGM,
one thing that does seem useful to have out there beforehand, both in
general and wrt informed debate for the upcoming election, is the set of
"bottom line" figures. 

Here are the various ones I believe are most useful, along with some
context.

    LCA:              2007      2008      2009
    ------------   -------  --------  --------
    Profit:        $40,875  $120,251   $86,451  (to date as at 2008/12/31)
    Receivables:         -         -  $120,000  (estimated, outstanding)
    Liabilities:         -   $25,000  $200,000  (estimated, outstanding)
    ------------   -------  --------  --------
    Totals:        $40,875   $95,000    $6,000  (estimated)

The LCA 2009 estimates are pulled completely out of the air, and are
likely to vary significantly by the time the conference has actually
happened. I would be surprised if they even match the latest figures the
LCA 2009 team are working from. Add any other caveats you can think of.

The total cost of running an LCA has been roughly:

                      2007      2008      2009
    ------------   -------  --------  --------
    Expenses:     $383,167  $376,654  $107,987  (to date as at 2008/12/31)
    Liabilities:         -   $25,000  $200,000  (estimated, outstanding)
    ------------   -------  --------  --------
    Totals:       $383,167  $401,000  $308,000  (estimated)

Our current net assets are approximately $450,000, however as per the
above we have at least $100,000 in liabilities that we will have to deal
with (eg, paying for the rest of lca 2009).

Our minimum bank balance over the past couple of years was in April '07,
shortly after linux.conf.au Sydney when we dropped to about $50,000
cash-in-hand, rising back to about $120,000 the next month, at which
point we still had an additional $78,000 in receivables still owing from
lca 2007 sponsorship. 

Excluding linux.conf.au 2009 income, expenses, liabilities and
receivables, it's reasonable to consider our underlying net cash in hand
as approximately $300,000, though that's very hand-wavy.

The total cost to run the 2008 Melbourne lca (assuming no sponsors, no
registration fees, and that attendees organise their own accommodation)
would have been would have been approximately $328,000 ($401,000 minus
$72,880). So based on that we currently have an underlying cash buffer
of approximately 91% of the total cost of the last lca.

If you consider supporting linux.conf.au as the most important function
of Linux Australia, that leaves us in a very good position to continue
doing so from a financial perspective, the global financial crisis's
effects on attendees, speakers and sponsors notwithstanding.

The other functions of Linux Australia, from a financial perspective, are
broken down into a handful of categories, and their income and expenses
look roughly like this, over the two reporting periods I'm working with
(namely the last .au financial year, and the last six months of 2008):

                   2007/07-2008/06    2008/06-2008/12
                   ---------------    ---------------
    Interest               $13,529             $7,814
    LPI                       $386                  -
    Misc                      $142               $140
                           -------           --------
                           $14,057             $7,954

    Admin costs             $2,992             $2,232
    Grants                  $3,216             $3,369
    Mirror                    $122                  -
    LPI                     $1,646                  -
    Special                 $5,296             $9,463
                           -------           --------
                           $13,272            $15,064

                           -------           --------
    Profit (Loss)             $785           ($7,110)
                           -------           --------

The overall profit/loss above may be viewed as how much LA's
non-lca activities are eating into the cumulative proceeds of past
linux.conf.au's. So overall between July 2007 and June 2008 we didn't
eat into those funds at all; and between July and December 2008 we ate
into LCA 2008's $95,000 (est) profit by $7,000.

To give you a better idea of what those categories involve:

    * Misc income includes the occassional donation or merchandise sale,
      such as kaldi coffee.

    * Admin costs are for council f2f meetings, maintaining the PO Box,
      fax number, getting insurance, maintaining the bank accounts, etc.

    * Special projects in the past six months were:

        $3,714 - Education expo presence
        $4,475 - OpenCD replication for Software Freedom Day
          $572 - CeBIT 2008 reimbursements (flight and petty cash)
          $702 - LCA 2010 bid review (flight reimbursement)

      Special projects during the prior twelve months were:

          $726 - OpenCD replication (SFD?)
        $2,647 - CeBIT 2008 costs
        $1,923 - CeBIT 2007 costs

I don't have a convenient summary of the grants that make up the (ex-GST)
figures above, but hopefully the grants czars might be able to provide
that RSN.

There are a few major questions that LA members, past, present and future
LCA organisers, and potential council members might want to consider
from a financial point-of-view:

    - how much buffer to we want to maintain for future linux.conf.au
      events?

          (benefits: generates interest, makes it easier to deal with
           delayed payment of sponsorship fees, self-insures against
           risk of future lca's making a loss)

    - how much profit from past linux.conf.au's do we want to allocate
      to other activities?

          (benefits: lets us promote/improve Linux and open source in
           other ways, including ones that don't have to make a financial
           profit)

          (costs: draws down on the buffer, means linux.conf.au teams have
           to worry about making a profit, not just a great conference)

    - how much is linux.conf.au likely to grow in cost in future?

          (benefits: more attendees, more speakers, more help to speakers
           who can't afford to get their on their own, better network
           access, better recording of talks, more fun and exciting
           stuff, etc)

          (costs: lca team needs to look at higher registration fees
           and more sponsorship effort, harder to return a profit,
           more effort to run a conference)

          (alternative: how much is lca likely to shrink in cost in
           future? invert the costs/benefits.)

    - are the non-lca activities LA is undertaking currently providing
      value for money and effort? are there other activities that would
      be more valuable?

    - are the other things LA members could be doing that are both
      worthwhile and would generate funds that could be reused for grants
      and similar?

Obviously there are tradeoffs amongst those ideas. But hopefully it's
food for thought.

Anyway, that concludes your pre-AGM financial teasers. If you do have
any questions from all this that you'd like answered at the AGM, passing
them on beforehand will increase the odds that you'll actually get an
answer at the AGM.

Cheers,
aj

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