I Am Not a Lawyer But I Pretend I'm One in the SCA

SCA, Inc. has decided to raise the membership fees again. This feels like the beginning of a death spiral to me, though I hope not.

[I've added some statements due to new info on 2012-Feb-04]

Initially this increase was going to be for $5, but they've just revised that to $8. The BoD's stated reason is because of the costs associated with an ongoing lawsuit.

I did a little digging around and quizzed some knowledgeable sources and was able to determine the following:

• The lawsuit in question is related to the Benjamin Schragger molestations that occurred as late as 2003. Basically six of the victims are suing the SCA for not performing due diligence in respect to its youth leaders.
  
• The inital 2007 lawsuit was thrown out after bouncing around the federal/state levels. The 2010 lawsuit involves the same issues, but is a modified refiling with some individuals named as defendants in addition to SCA, Inc.
  
• The victims are asking for considerable damages - $10M each [$7M total, settled for $1.3M].
  
• [one of] The SCA's insurer is not covering this liability.
  
• The SCA's assets (~$900K) are nowhere near large enough to cover that out of pocket. [But the total assets for the North American Kingdoms is much larger - I hadn't factored that in originally.]

I have not confirmed these statements, so don't take them as the gospel truth. In fact, if you know otherwise, I'd appreciate a correction!

My gut feeling, having read the initial complaint is that they have a good chance. The SCA is a fairly hidebound organization and it values personal bonds of fealty over the sort of organizational oversight that would have protected it. I know I wouldn't want to be the guy who has to defend the SCA in front of an actual jury. If even a fraction of the stories I heard online (a lot of blame-the-victim by friends of Mr. Schragger - even after his conviction) are true, it's going to make a jury very sympathetic to the victims and very negative towards the SCA. Plus a lot of the policies that were implemented (basically the Boy Scout's two-unrelated-adults-present-at-all-times rule) were done so after and in response to this all going down, which implies that the SCA was ignoring a potential problem while it was going on.

So I think this lawsuit is not going to turn out well. If it goes to a jury the SCA has a good chance of being clobbered. Even a fractional payout could bankrupt it. If that happens I'm basically cutting up my membership card and keeping an eye out for the auction where they sell off the Barony's assets.

The best outcome would be to ask for the suit to be dropped in return for a sincere apology to the victims, some proof that the policies will prevent a repeat from some other child-rapist, and paying for all the legal fees incurred. Given the number of victims involved and what they went through, I count this outcome as unlikely. That being the case, the next best outcome is a settlement that doesn't bankrupt the SCA.

Finally, they can go to trial and hope for the best. Who knows, maybe they'll win, then they'll just be out several years worth of legal fees.

I Am Not an Economist But I Pretend I'm One in the SCA

Win, lose or draw, the lawsuit against SCA Inc, is going to be expensive, and the group is already running a deficit. The SCA doesn't have a lot of income streams and the biggest one is membership fees, hence the fee increase.

This is akin to a government raising taxes. The only problem is that your taxes aren't voluntary but membership in the SCA is. I expect a lot of people simply aren't going to renew. Let's look at who buys memberships:

1. People who can afford it and will do so regardless of any reasonable increase. These are basically affluent SCA "lifers". This is the base membership that the BoD can always depend on being there.
   
2. People who can afford it and will pay so long as they feel they are getting something out of membership. This could be a simple cost/benefit analysis of ( membership fees <= non-member surcharge * number-of-events-per-year ), or it could be a gut feeling that paying the membership fee is the right thing to do. The BoD can probably keep these people so long as it doesn't actively piss them off.
   
3. People who can afford it, but pay it because they feel they have no choice. Officers and people receiving awards who aren't already in category 2. This is the category I'm in - I don't really think the membership give me anything other then a useless newsletter. It's just a hoop I've jumped through to be an officer in the local branch.
   
4. People who probably can't afford it, but do so anyway. Life is full of people who skip the necessities for the luxuries. Mostly they muddle through.
   
5. People who really really can't afford it. They will drop out, regardless of their beliefs in whether it's worth it or not.

So the fees are increasing, what does that mean? First, they can probably keep people in #1 and #4. If this goes hand-in-hand with an increase in the NMS surcharge, they stand a chance of keeping the people in #2. People in #3 are making their decision on staying for non-economic reasons. Some will stay, provided they still feel that being more then a fringe-member is worth it. Others will go if they get fed up. If those were the only categories, then the SCA would stand a chance - the increase in fees might compensate for the drop in membership. It might even compensate for the current deficit.

The problem is #5 - a lot of people simply can't afford it anymore, and that number is growing. And if they can't afford $35/year, they certainly can't afford $43. The deficit, the fee increase, the lawsuit, they're all happening during the worst economic downturn since the Great Depression. We don't see it so much here in Canada, but there are places in the US where the unemployment rate has reach Great Depression levels, and those jobs aren't coming back. Unemployment benefits for millions of Americans are about to expire, and lots of people are losing their homes. In the grand scheme of things, your SCA membership is not going to be a priority.

At the same time, the SCA is an aging organization. I have no numbers to back that up, but it is a testable hypothesis: All you need to do is look at the old membership statistics to see what the average age is each year. Anyone know if those numbers are publicly accessible?

We're going to see a rapid loss of membership if the average age of membership goes much higher. There's just not enough kids to replace us all.

I've made some of these arguments before, but now I'm going to focus on some of them.

Possibility one: The SCA survives it's current legal/financial crisis, but doesn't really change how it operates.

In this case I see the SCA slowly losing membership and it leveling out in 20 years or so somewhere in the neighborhood of 10K-20K memberships. Aside from providing a global umbrella of insurance for branches, the BoD doesn't do much - it simply won't have the funds to do much.

Possibility two: The SCA is bankrupted, either from a drastic loss of income (i.e. lack of memberships) or a huge outside cost (i.e. losing a lawsuit).

Keep in mind that there is really two parts to the SCA, one is the organizational framework provided by the BoD, the other is the rank-and-file members who just want to do their thing. Bankruptcy kills the BoD, but leaves the members intact. I don't know about you, but I'm not going to let the bankruptcy of SCA Inc stop me from going to Quad War. A new SCA could rise from the ashes. It would need to be substantially different, lest it inherit the former groups liabilities (i.e. you can't just lose a lawsuit, declare bankruptcy and change your name to SCA 2.0 - it's been tried before and the courts are well aware of it). An elected BoD, with a well-developed framework for oversight and removal of bad elements would be a start. The governing documents of the Boy Scouts of America would make a good template.

I'd recommend carving off the Canadian branches into an independent group that's affiliated with the global SCA in the same way that Lochac is. I'm not sure of the logistics of that - organizing nationally seems too big for such a sparse group, but doing so Provincially seems to be too small, given it would be ten provinces divided over four (proto-)Kingdoms.

Possibility three: A Hail Mary pass succeeds!

Something happens to "rescue" the SCA. An endowment from a rich eccentric; an outside source of income that takes the strain off the membership; or some large, untapped source for new members is discovered ("Lloyd the Conquorer" becomes a block-buster and the SCA becomes the "it" group to join). I have no idea what this would be, but it would be good in the short term (people don't need to scramble to pick up the pieces of a broken SCA or keep their heads above water in a shrinking SCA), but would be bad in the long term. Such rescues are unlikely to happen once, much less twice or with reliable regularity. Also I believe the SCA is simply badly run and has numerous systemic flaws (for example, non-elected directors) that will prevent it from fixing itself. This would prevent us from taking advantage of the clean slate of a brand new organization.

Needless to say, I don't think a Hail Mary pass is likely. I do like the idea of a reorganized SCA, although the circumstances of this occurring will be painful. I'm not looking forward to that, though I think a stronger group will result. A decentralized organization might be able to withstand the membership shrink I'm predicting.

Regardless, I think it's clear that a storm is coming and everyone should prepare for it. Storms can be destructive, but they can be survived and they do clear the air.

The Best Thing the SCA Has Going For It

The people in the SCA are remarkably resilient. As anyone who's seen (locally) the evacuation of Dragonsoaker in front of an imminent flood, or (on a much larger scale) the amount of effort given towards rescuing members after Hurricane Katrina, we can organize a lot of self-less activity for a cause on fairly short notice.

I don't know what the SCA will look like in ten years, but I'm confident it will still be there.