The Real Net Worth of the USCF

On 04 Jun 2000 02:37:50 GMT, (HHuntersRE) wrote:

Well.....In reality, if you feel you must take in consideration "future costs" then you also must take in consideration "future income" Now, since neither is very practical, I believe it's conventional practice to ignore both.

A liability is money you owe. There is no money owed to Life Members. Simply the obligation to send them copies of Chess Life. The cost of producing and mailing those issues will be absorbed by the operating income concurrent with the actual expenses.

Since, even with all the mismanagement you might want to point at, they have been able to accumulate some considerable net worth, the income must have outpaced the expenses so far and there is no reason to believe the same will not happen in the future.

In fact, if worse came to worse, I think they could simply go to a one page Chess Life magazine and save a lot of those future expenses... :-) After all, I don't think there is a contract that specifies and describes the magazine to be received.

Thank you for posting this, whoever you are.

Setting up the so-called LMA account was a political move designed to accomplish a valid and reasonable purpose, which was to prevent the Executive Director from running out and spending all the money right away.

I believe that Steve Doyle, who was USCF President from 1984 to 1987, takes credit for setting up the LMA.

Prior to Doyle, Major Edmondson was Executive Director of the USCF. It is often said that Edmondson left the USCF virtually bankrupt by selling cheaply or giving away a large number of life memberships and then spending the money as current income.

The LMA system was designed to prevent this from happening again. The LMA is under the control of a separate board and is not under the control of the executive director. The only way that the Executive Director can get at that money is to beg or plead for it.

However, to create a "Deferred Life and Sustaining Memberships Liability" is simply wrong. This is not authorized or required by GAAP. The USCF has no legal liability to the life members. The life members joined and paid their dues just like everyone else does. The USCF owes nothing to its life members, just as a for-profit corporation owes nothing to its stockholders.

The reason this is an important matter is that those who are out are trying to overthrow those who are in and retake the fort.

A perfect example is Al Lawrence. As long as he was in as Executive Director, Lawrence was strongly opposed to the various schemes which were being presented to give special treatment to the life members. However, now that he is out, having resigned in 1996 only hours before he was going to be fired (he still claims that he did not know he was going to be fired), he has jumped to the other side of the fence and is part of the group that wants to stop the Executive Director from receiving even enough money from the LMA to pay for the printing and mailing of Chess Life to the life members.

This has hurt the USCF badly, because a majority in the World Chess Community have heard that the USCF is broke and is likely to close down soon. The truth is the opposite. The Real Net Worth of the USCF as of the last fiscal year is $1,787,266.37, as calculated in accordance with Generally Accepted Accounting Principles, as opposed to the Doyle-Lawrence formulation. The USCF is on more solid financial footing than any chess organization in the world, with the exception of the Mechanics Institute in San Francisco, which is primarily a library, not a chess club.

Sam Sloan

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