VISION 2016 – Executive Summary for Board review and commentary

Please find below and attached a draft of the proposed VISION 2016 strategic plan. This updated plan has been developed by the SMT, and we are now looking for Board input, so that we can continue to fine tune and present he final plan to you at the October Board meeting.

For clarity, this document does not represent a proposed change in “strategy”. We already have an agreed strategic plan called ONE VISION, and this document should be viewed as an “operations plan” update, with a focus on what our priorities should be going forward, specifically in 2014

The SMT is looking to gain alignment with the Board on the proposed priorities going forward, on the draft 2014 proposed budget, and draft 2014 scorecard kpi’s.

Attached for your review are:

1) The updated “House”. We have redrafted the language on Strategic imperatives 1.1, 1.2, and 1.3 to be clearer, and more indicative of the true meaning of these imperatives.

2) The proposed 2014 Scorecard with kpi’s only. The current kpi’s for 2013 are listed in a side by side comparison for easy reference.

3) The proposed draft budget for 2014, 2015, and 2016 with commentary to explain key variances from the 2013 current estimate, and rational for significant changes. This also includes a summary of must do initiatives that the SMT would like to pursue, but we cannot currently afford in the existing financial framework.

Proposed 2014 priorities

The SMT has put a lot of time and effort into determining what we feel should be the priorities for Golf Canada in 2014, as part of the One Vision strategic plan. It is important that staff and the Board are aligned on these priorities, and we will use the time allocated at the Board meeting to receive your feedback. These are the proposed must do initiatives within each pillar of ONE Vision, and in brackets are the specific strategic imperatives that they are aligned with:

Participation • Create and implement programs and initiatives that “connect’ golf facilities engaged in

CNFL to the schools engaged in the Golf in School programs. The goal is to increase the number of children engaged in CNFL at facilities, and to increase appropriate access for children at these facilities. (Imperative 1.1)

• Conclude the negotiations with The First Tee, with the intention to launch an integrated curriculum and coach training pathway for both the GIS and CNFL programs. The goal is to increase awareness and penetration of programs and generate incremental revenue to grow these programs. (Imperative 1.1)

• Evaluate the “Golf Fun” pilot, and include learning’s in expanded 2014 program, designed to engage more public golfers and increase public player memberships. The goal is to add 15,000 new public player members in 2014 by expanding the program to 100 courses (Imperative 1.2)

Excellence • Launch the Team Canada Emerging professional program. Goal is to create more

Canadian “heroes”. (Imperative 2.1) • Create a 10 year plan for the two Open Championships, and make a recommendation

on the potential of a new permanent site. Goal is to solidify financial future of Championships. (Imperative 2.3)

Capacity • Provide support to ensure the Golf Canada Foundation achieves its business objectives.

Goal is to provide more funding to Golf Canada. (Imperative 3.1) • Develop new, national golf funding model with NAGA and provincial associations. Goal

is to increase partnership/alignment with industry. (Imperative 3.1) • Implement new CGHOF strategy, including a new permanent home (if warranted), and a

national marketing strategy. Goal is to preserve and promote history and heritage of golf in Canada. (Imperative 3.3)

Interaction • Investigate, develop recommendation, and implement (if appropriate) integration with

either the PGA of Canada or a provincial association. Goal is increased alignment and possible financial/governance efficiencies. (Imperative 4.1)

• Define new technology, commercial and content partner relationships for the website and Score Centre. Goal is to complete new partner agreements (Imperative 4.2)

• Continue to integrate the CRM platform throughout the organization, and make it the base for all constituent data and databases. Goal is to consolidate all customer insights and provide a more robust platform to build future engagement integrations. (Imperative 4.2)

• Secure a minimum of two national strategic alliances (ie Shaw, McDonalds, Canadian Tire) to promote/grow Golf Canada brand, and increase penetration of programs and services. Goal is to leverage the power of these brands to build Golf Canada brand in a cost efficient manner. (Imperative 4.3)

Grow Participation

1.1 Engage moreCanadian youth in thesport of golf

1.2 Develop a connection with more golfers

1.3 Promote thesocietal benefits of golf

Ensure Excellence

2.1 Implement programming for high performance juniors, Team Canada, and emerging professionals

2.2 Develop certified coaches and officials

2.3 Host best in class national and international championships

Expand Capacity

3.1 Develop sustainable funding and fiscal responsibility

3.2 Uphold and preserve rules, handicapping, course rating, amateur status, and history of the game

3.3 Provide opportunity and training for all volunteers and staff

Foster Interaction

4.1 Collaborate with STRATEGIC IMPERATIVES: STRATEGIC IMPERATIVES: STRATEGIC IMPERATIVES: STRATEGIC IMPERATIVES:

provincial golf associations, NAGA, government, and international partners

4.2 Increase capabilities in digital & interactive technology

4.3 Strengthen communication and brand awareness

Performance Measures

CORE VALUES: Purposeful, Inclusive, Respectful, Responsive

VISION: Successfully shaping golf’s future in Canada through innovation and interaction

MISSION:As the governing body of golf in

Canada, our mission is to grow participation, excellence, and passion in the sport while upholding the integrity

and traditions of the game

2013 (Actual)

KEY PERFORMANCE INDICATORS

2014 (Proposed)

KEY PERFORMANCE INDICATORS

1.1.1 Total # of schools registered in Golf Canada "in-schools" program 1.1.1 Total # of schools registered in Golf Canada "in-schools" program

1.1.2 # of unique sites actively running FL (total number of unique facilities - # of

active sites registered and using Learn to Play, Junior Skills, Junior League and Girls

Club)

1.1.2 # of Facilities connected to a registered school

1.1.3 # of active CN Future Links sites

1.1.4 Conclude First Tee negotiations

1.2.1 Total membership revenues 1.2.1 # of Member golfers (including public player)

2.1.1 Implement Team Canada Emerging Pro Program

2.2.1 # of total Future Links leaders trained 2.2.1 # of total Future Links leaders trained

2.2.1 # of total PGA members trained at CNC 2.2.2 # of certified or trained officials

2.3.1 Defined key learnings and recommendation for 2013 events2.3.1 Board aligned recommendation on 10-year Opens strategy

3.1.1 Net - Operating Fund results (before amortization, Women's Fund and

investment income)

3.1.1 Net - Operating Fund results (before amortization, Women's Fund and

investment income)

3.1.2 - Secure title sponsor for CWO (by a for a minimum $2M plus purse)

3.1.3 Implement Board approved sales/marketing strategy

3.3.1 Clarify roles and responsibilities for CEO, SMT, and Board

4.1.1 % of non-member free accounts set up that have multiple scores posted4.1.1. Secure agreement to new industry funding model

4.1.2 # of GC programs (GFC, GIS, CN L2P, selling merchandise) @ member clubs4.1.2 Conduct pilot with PGA of Canada and/or Provincial Association

4.3.1 # of permission granted e-mail addresses 4.3.1 # of permission granted e-mail addresses

4.3.2 Number of provinces committing to connect to CRM 4.3.2 Secure two national strategic alliances

2.3 HOST BEST IN CLASS

NATIONAL AND AMATEUR

CHAMPIONSHIPS

3.3 PROVIDE OPPORTUNITY AND

TRAINING FOR ALL VOLUNTEERS

AND STAFF

4.3 STRENGTHEN

COMMUNICATION AND BRAND

AWARENESS

2.1 - IMPLEMENT PROGRAMMING

FOR HIGH PERFORMANCE

JUNIORS, TEAM CANADA AND

EMERGING PROFESSIONALS

3.1 DEVELOP SUSTAINABLE

FUNDING AND FISCAL

RESPONSIBILITY

2.2 DEVELOP CERTIFIED COACHES

AND OFFICIALS

4.1 COLLABORATE WITH

PROVINCIAL GOLF ASSOCIATIONS,

NAGA, GOVERNMENT AND

INTERNATIONAL PARTNERS

2014 GOLF CANADA GOALS & OBJECTIVES

(Draft)

1.1 ENGAGE MORE YOUTH IN THE

SPORT OF GOLF

1.2 - DEVELOP A CONNECTION

WITH MORE GOLFERS

 

TO / DESTINATAIRE : Board of Directors FROM / EXPÉDITEUR : David Lafleur

CC: Scott Simmons, Senior Management Team

Audit & Risk Management Committee

DATE : 13-06-14

RE / OBJET : 2014-2016 Budget

2014-2016 Budget Based on an off-site Senior Management meeting, we have updated the assumptions and plans behind the 2014 budget to tie to the updated key initiatives as part of the strategic plan. We have summarized the key budget assumptions in detail below, but the impact of the 2014 budget revisions at a high level is as follows: ’13 Bud ’13 Est ’14 Bud Net Operations (before Investments) ( 620) ( 508) ( 445) Investments 1,083 1,286 1,096 Disbursements from other Funds ( 40) ( 98) ( 100) Net Income before Adjustments 422 680 551 Depreciation/amortization ( 410) ( 410) ( 410) Net Income on Financial Statements 12 270 141 Some of the key assumptions in the 2014 budget:

• Dues increase from $12 per member to $13 per member • Growth in public player memberships through expanding the Golf Fun program pilot • Increased fundraising support from the Foundation • Increased CN sponsorship for Future Links • Securing new presenting sponsor for Golf in Schools program • Loss of Kavelman funding for amateur championships offset by some cost reductions • Increase net cost of our Globe/Golf Net agreements • Introduction of Intermediate Golf in Schools program • Bi-annual increase in Team Canada costs due to participation in World Amateur • Conversion of compensation plan from year-end incentive pot back to annual increases • Full year of reduced rent costs

VISION 2016 FINANCIAL ASSUMPTIONS REVENUES Membership Dues

• Dues projection includes an increase of $1 in 2014 and a $0.50 annual increase starting in 2015 o It is anticipated that a new dues model could be implemented in 2014 or 2015 that would

provide, at a minimum, the projected dues based on the above assumptions o $242K increase in 2014 over 2013 estimated results, a further $89K increase in 2015, and

a further $85K increase in 2016 • Overall attrition assumed to be 1.5% for 2014 to 2016, compared to realized attrition of 2.52% for

2012 and budgeted attrition of 3% for 2013 o Most attrition of unhappy clubs would have been expected in 2012 and 2013 after the

announcement of the dues increases o Attrition is a combination of some element of reduced membership at current clubs

through lower actual membership levels offset by the reversal of some under-reporting issues due to card distribution and awareness

• Increase of 4 net new member clubs in each year of 2013-2016 • Increase of public player members over 2013 estimated results from a number of areas:

o Significant growth from upgrading golfers to full paying memberships through the investment in the Golf Fun program (15,000 new members per year starting in 2014, with 50% retention)

o Individuals who have left member clubs (15% conversion to public players) o Renewal of members signed up through a VTour program (50% conversion) o New members recruited through a number of promotional initiatives:

§ Targeted advertising campaign § Targeted app providers promoting membership § Use of practice facilities and public golf courses to act as retail outlet

o $224K increase in 2014 over 2013 estimated results, a further $144K increase in 2015, a further $154K increase in 2016

Sport Canada

• We received notification that our base funding decreased by $165K for 2013 (to $690K) • We anticipate some increases in base funding based on special projects, but have based the

budget on annual funding of $760K RBC Canadian Open

• Starting in 2013, RBC is paying TV direct to Tour (savings of $2.3M), our fee from RBC decreases by only $2.0M, our purse obligations increase by $350K net, and our currency cost of $50K is eliminated due to RBC paying us in US funds in the new contract

• In 2014, RBC fee increases by $300K, offset by $50K in net purse increase and increased host club fee of $200K

• 2013 Ticket sales and corporate sales revenues are projected to be $5.0M compared to $6.1M in 2001 when we were last at Royal Montreal (Tiger was defending champion)

• We do not have the same $800K risk that we had going into 2013 (replacing Bell net revenues) as we have the Shaw sponsorship in place and increased ticket and corporate revenues help fill this gap for 2014

• We have budgeted for increase expenses for bilingual signage required by being in the Montreal marketplace

CN Canadian Women’s Open

• Event is expected to be at or above the break even mark, depending on the market it is in: o 2014 (TBD) is projected to be breakeven due to minimal government funding o 2015 (Calgary) has the potential for financial surpluses due to Calgary Tourism funding,

but there is now unknown with their future direction and role in that market • CN’s contract expires after the 2013 event and we are continuing to have discussions with

companies about taking over title sponsorship for the 2014 event • Ticket sales and Corporate product sales revenues are projected to be similar to prior year’s

results for all 3 years Golf Canada Centre (Calgary facility)

• We do not plan any significant changes in operations for 2014 and beyond, expecting business to continue in a similar manner, projecting minimal overall net growth

• The current term of the lease expires as of December 2013 and we have given notice of our intention to renew for an additional 5 year term

• We had an initial meeting with the new landlord about having additional 5 year options available to as part of a lease addendum, and a follow up face to face meeting is being scheduled to discuss this further

Sport Development

• Fundraising for Emerging Pro program is not budgeted, but targets have been set ($250K in 2014, $400K in 2015, $550K in 2016) with the understanding that the monies raised are to be spent on a one-year lagged basis using money raised from previous year from a number of areas including:

o Accessing funds raised through the Golf Canada Foundation o We also anticipate we will start receiving some amount of “Own The Podium” funding due

to being an Olympic sport beginning in 2015 • Increase in investment by CN to $750K in 2014 allowing new spending on a Field Trip program,

School Adoption program and FL Leader program ($775K in 2015, $800K in 2016) o Planning to add one new supporting sponsor at $25K level in 2015 and another one in

2016, providing them “presenting” status on certain elements of the program (ie. Jr. Golf League)

• Callaway left as NGIS sponsor – currently budgeting for replacement at $200K level starting in 2014

o Planning to add one new supporting sponsor at $25K level in 2014 and another one in 2016

o Projecting that we add 700 participating schools per year between the elementary and high school program through the school paying fees or adoption of schools

• Planning to add one new “pink” partner in the golf equipment category at the $20K level for Golf Fore the Cure starting in 2014

• Accessing funds raised through combined efforts with the Foundation, ($275K per year starting in 2014), based on the following:

o Oviinbyrd event o RBCCO Monday pro am o Trustee Donation program

• Corporate sponsorship from “MacKenzie days” on the Monday after both professional championships to support Team Canada ($120K net per year for 2014-16)

• RBC sponsorship agreement expires after 2014 – loss of $100K in sponsorship revenue

Amateur Competitions • The Royale sponsorship agreement expires after 2013 ($70K), and the RBC agreement expires

after 2014 ($200K), we assuming to replace $85K of this for sponsorship of all Amateur events for 2015 and beyond

• Amateur Initiative funding expires in 2013 ($100K) and renewal/extension of this donation is not anticipated

• A $25 entry fee increase was implemented in 2012, and we expect to increase dues by $25 every four years

• All events budgeted as full fields (156), except Women’s Amateur (144), Junior (120) and Senior (120), Men’s Amateur assumed to continue as double field (240) for 2014 to 2016

Other revenues

• Royalties from merchandising strategy forecast reduced by $35K in 2014 due to lower manufacturer participation than anticipated

o Slower growth projected for 2015 and beyond ($144K in 2014, $187K in 2015 and $209K in 2016)

• Revenue for rules publications goes through a 4-year sales cycle with lower sales projected through 2015, with a spike in 2016 being the new rules year

• Partner revenues from IHG & RBC Insurance royalties ($15K per year combined for 2014-2016) • Combined “Other Partners” net revenues includes:

o Continuation of Global Golf Post agreement at $50K per year o New deals with GolfNet and the Globe & Mail (or alternate partners) that is expected to

have a net cost ($100K in 2014, $75K in 2015 and $50K in 2016) Investment Income

• The budgeted amount is based on a projected return of 4.25% from distributions and market value increases of the holdings in our portfolio

• The Investment Committee has made changes to our investment holdings which are expected to provide an overall higher portfolio return than prior to 2013

• It is important to remember that based on the new Not for Profit reporting standards, we are required to realize any changes in market value as investment income which could provide some risk and volatility to this line item on an annual basis

EXPENSES Sport Development

• One new full time junior staff person to support growth of Future Links and Golf in Schools programs starting in 2014

• Team Canada o Based on 22 team members with increased spending on:

§ Sport science consultants ($44K per year) § Other coaches/caddies as support system ($25K per year) § Adding of World Am to playing schedule ($52K in 2014 and 2016) § Adding additional events to schedule of top players ($30K per year) § Related increase in coaching fees/travel due to above ($25K per year) § New trackman equipment ($30K in 2014 only)

• Junior High Performance o Junior golf development centers program ($15K per year) o Launching of Learn to Compete program ($40K in 2014 and 2015, $20K in 2016) o Costs to prepare for Olympic games ($20K in 2015 and 2016) o Introduction of World Junior Girls Championship in 2015 accessing up to $85K from the

Women’s Fund supplementing sponsorships or government funding, and subject to approval of the Women’s Fund Committee

• Increased spending in Future Links program o Introduction of Field trip program, School Adoption program and FL Leader program

through new CN funding ($70K new spending started in 2013, increasing to $85K per year starting in 2014)

o Launching new Junior Golf League program in 2014 ($25K) o Increased spending on “Get Linked” program (from $35K to $50K starting in 2014) o Launching of interclub competitions starting in 2015 ($5K per year) o Increased promotional spending by $80K in 2015

§ Introduction of FL brand ambassadors (2 pros) and integrate them into the promotional plans ($50K)

§ Development of a series of FL videos ($20K) § Development of an “Are you ready” campaign to promote FL ($10K) § Integration of FL website into Golf Canada website in 2016 ($33K)

o The impact of First Tee integration is unknown at this point, and no money has been included in the budget

• National Golf in Schools o Increased cost of providing equipment to schools will be variable and tied to revenue

levels from donations or school participation fees (assuming 700 new schools per year starting in 2014)

o Launching of Intermediate Schools in schools program in 2014 (costs of $40K for 2014 and $15K in annual program support costs for 2015 and beyond)

o The impact of First Tee integration is unknown at this point, and no money has been included in the budget

o Introduction of new program elements: § Pilot Skills Challenge ($11K starting in 2014) § Transition program ($15K starting in 2015) § Club Depot initiative ($6K starting in 2015) § On-line teacher training ($7.5K in 2015 only)

o Bi-annual survey of participating schools to be conducted next in 2015 ($17.5K) • Focus on under-represented groups

o Introduction of community Centre program ($10K in 2014 to $20K starting in 2015) o Integration of para-participants into National Championships ($5K in 2015 and $15K per

year starting in 2016)

Member Services

• Continued investment in Regional Director and club visitation strategy • A change in strategy to have the membership cards re-produced the cards in 2014 with a view of

some type of transition plan for 2015 and beyond ($120K cost in 2014, reduced to $70K in 2015 and $20K in 2016)

• Redirected promotional and marketing activities and increased spending on collateral material to promote public player sales through the expansion of the pilot program, and connection to the game applications (from $77K in 2013 to $120K in 2014, and $110K per year starting in 2015)

• Eliminate paying for ED’s flights to our AGM ($7.5K savings starting in 2014) • Course Rating calibration seminar occurs every other year, costing $10K in 2014 and 2016 • Slightly increased spending in Heritage department based on continuing to operate on a

minimum basis, until an alternate plan is developed ($15K in additional expenses in 2014) • Reintroduce expenditure on corporate intelligence to better understand the wants and needs of

members and potential members ($40K in 2015, $50K in 2016) • Investment in new member benefit development for people who have a physical card ($150K in

2015, $225K in 2016) • Hosting of International Rules Seminar in 2015 in lieu of normal rules seminars, receiving

financial assistance from the R&A ($15K savings for 2015 only) Amateur Competitions

• Expenses reduced by $100K starting in 2014 due non-renewal Kavelman money o Lower amount contributed to the club for player dinner, requiring the club to supplement

with fundraising/sponsorship of the dinner o Elimination of daily breakfast for all players

Administration/Other

• Staffing costs - conversion to an annual average increase method to replace the incentive pot method ($150K increase to fixed costs in 2014 rather than spending up to $200K as a variable cost at year-end, with an assumed average growth of 3% per year)

• Reduction in rent due to restructuring of lease with ClubLink, providing $300K of net savings in 2014, a further savings of $13K for 2015 and beyond

o Our rent recoveries are expected to reduce by $116K from 2013 with Wasserman moving to a downtown location

• Costs of website management tool to coordinate with new website partner ($50K in 2014) • Development of a plan to make the CRM the home of constituent data for Golf Canada, allowing

integration of other programs with the CRM ($160K in 2014, $91K for 2015 and 2016) • Hiring of a new Senior Coordinator level person to support D&I activities starting in 2014 ($40K

per year) • Public relations campaign with growing expenditures from $50K spent in 2013 ($80K in 2014,

$125K per year starting in 2015) • $50K per year spending budgeted for strategic planning, including initiatives supporting the “One

Vision” strategy • Planned spending from Women’s Division Fund to $100K starting in 2014

Capital

• Continued replacement of older IT equipment (3-4 year replacement plan) • Continued capital maintenance plan at Calgary facility • We replaced on truck in 2012 and will be replacing one of the trucks used to transport the

amateur championships equipment, based on our 5-year replacement strategy, with no impact to the bottom line as the depreciation on the new truck will replace the depreciation on the old truck

The following are items that we did not include in our 2014 budget due to financial constraints, but staff is looking for ways that we can include some of them while not limiting our ability to meet our financial mandate. For Sport Development:

-­‐ Team Canada o Additional coaching support for Team Canada members- $15K

-­‐ Junior High Performance o Olympic preparation - $20K o Pan am games preparation - $10K o Junior course strategy - $5K

-­‐ Future Links o Interclub competitions - $5K o Future Links promotional video - $20K o Future Links ambassadors program - $50K

o Are you ready campaign to promote Future Links - $10K -­‐ Golf in Schools

o Golf in Schools adoption strategy - $5K o Club depot initiative as part of Golf in Schools - $6K

-­‐ Minority development o Para participant strategy in our amateur championships - $5K

For membership:

-­‐ Membership promotion o VTour prizing - $5K o Reduced targeted PP campaign costs from $15K to $7.5K per year o Moved cost of intelligence ($40K) to 2015, and plan for every other year

-­‐ Member benefit o Amount to provide additional benefit to member card holders - $150K (This amount is

deferred to start in 2015, with some planned increase in costs thereafter)