For those of you who have been waiting for an update since our Interaction 24 post, thank you for your patience. And for those of you who have been following along either actively or passively, thank you for your presence.
The long and short of where we are today is that the Interaction Design Association is financially insolvent and is carrying significant debt. Despite our best efforts, we have not been able to find a solution that would put the organization on stable footing. Given the situation (that is described in more detail in this post), we have made the very difficult decision to dissolve the non-profit side of IxDA.
What this means
It is important to understand that IxDA is both a legal entity and a community. The legal entity is what is frequently referred to as “global” and is what requires a board as part of legal operation.
IxDA began with community. In 2003 a mailing list was formed for practitioners in the emerging field of Interaction Design. In 2004 the first Local Groups were started in London and New York. This grassroots approach to organizing has always been a part of IxDA and community has always been at the core.
IxDA formed a legal entity in 2005. Interaction Design Association was incorporated as a non-profit in the United States to handle things like bank accounts, revenue generation, taxes, and the legal side of things as we began to put together more formal offerings like conferences.
In August we will be dissolving the legal entity. This means that the non-profit side of IxDA will cease to exist (including the board), along with the operational, financial, and organizational capacity to run global events such as Interaction Week, the Interaction Design Education Summit, and the Student Design Charette.
The community, consisting of Local Groups around the world, will continue to exist. IxDA Oslo will take over ownership of the ixda.org domain, which will continue to be a resource for interaction designers and community organizers, including our extensive video library covering conference talks from the last 15 years.
What happened
For a while now, the conference business model has been unsustainable for us. The yearly Interaction conference was the primary way the organization made enough money to operate throughout the year. The money we did make went to paying our Executive Director, contractor fees, and operating costs for the organization. We have always been a primarily volunteer run organization operating on a slim budget and have never been wildly profitable, which has always seen us in a vulnerable position.
And then came the pandemic. Two years of online conferences impacted our operating budget, and we didn’t make the returns we had from in-person conferences, further wearing down the small cushion we had built over time.
Interaction 23 was our first in-person conference since the pandemic, and we hoped to get our operating margins to pre-pandemic levels. While we didn’t quite hit the numbers we had hoped to, we came out of Zurich feeling like we could get the machine running again. The board received confirmation that we had closed out all accounts related to the conference, Early Bird tickets for Interaction 24 were released online, and we began to plan for the coming year.
As we entered the months of August and September of 2023 we weren’t seeing the usual signs of healthy conference engagement, both from the ticket sales as well as from sponsors. The conference relies heavily on sponsorships and with uncertain macroeconomic conditions coming out of the pandemic, inflation, and rising interest rates we found budgets weren’t what they were pre-pandemic.
We shared this with the Interaction 24 conference team, who made the decision that the best path forward, given what we were seeing, was to cancel the conference. The board supported this decision, especially since we didn’t have a lot in the bank to manage potentially higher levels of risk.
Around this time, it had become apparent that we wouldn’t have the funding to continue paying our Executive Director, who parted ways with the organization in October. We took this as an opportunity to rethink parts of the organization, get operationally lean, and return to the roots of IxDA by refocusing on community. It felt like an exciting path forward.
Then we began to hear from creditors from Interaction 23. While we had been assured that everything from Interaction 23 was finalized shortly after the conference, and while our financial statements reflected the same, the creditors were telling a different story.
We still do not know how this level of debt happened. As a board, we didn’t know about the debt until the end of 2023, because it wasn’t reflected in our financial statements. The board relies on financial statements — income statement, cash flow, and the balance sheet, to understand the health of the organization and inform decisions — and we’ve always operated on the trust that the reporting in these statements was accurate. But as we would come to learn at the end of 2023, the statements were not accurate. There was debt from Interaction 20 and Interaction 23 that had not been reported in the financials. Not knowing about this led us to make decisions in 2023 under the assumption that the organization had been profitable, even if marginally, when the truth of the matter was that we were deep in debt.
The magnitude and surprise of the debt hit us hard. While working to unravel the truth about the organization’s financial status, we also learned there wasn’t enough money left to refund Interaction 24 ticket holders.
As we reviewed bank account and credit card statements, we started to realize that money coming in from Interaction 24 Early Bird ticket sales was going to the payment of Interaction 23 speaker fees, organizational operating costs, contractors, and the Executive Director’s salary. We’ve confirmed that no malfeasance or fraud contributed to our financial insolvency, but as it turns out, we had merely been running on borrowed time.
It has taken us many months to get a picture of where we are and what comes next. We have been in conversations with our bank, our creditors, insurance, lawyers, and board alums. We have explored every path we can to keep the legal entity alive.
What we did
In October and November of 2023, the board scrambled to understand the implications of everything we had uncovered and what it would take to move forward. This was a massive undertaking for a small board of volunteers without the professional support of lawyers or accountants.
We have talked to as many people as we can to understand how this happened, but many of our questions remain unanswered. I know we all want to know exactly how this happened, but that may not be something we can fully answer definitively.
In parallel to our efforts to investigate what had happened, we began a review and transfer of accounts, which had previously been maintained, owned, and run by our Executive Director. We have always been aware of this single point of failure through the concentration of knowledge in an individual, but it took this crisis to shock us into realizing that management needed to move away from one person; become more decentralized. This was an important learning for all of us. Our hope is that it will also be one that remains for the community.
We worked to rapidly spin down as much operational overhead as possible, going from about $3 – 4k a month in operational spend to just about 0.
The Interaction 24 ticket holders and our creditors have weighed heavily on us. We’ve exhausted every avenue we thought of, in trying to find a way to generate the funds we needed to pay them back. Unfortunately, we never found a viable way forward.
In early January, Dean Broadley stepped down as President, requiring a leadership change amidst the mounting challenges facing the organization.
Thanks to the dedication and care of a small group of volunteers, we came up with a ticket exchange solution for Interaction 24 ticket holders: a way of offering ticket holders a value exchange for the tickets they were holding. Around 100 people had purchased tickets to Interaction 24. Of these, 35% have redeemed tickets for another offering. We are eternally grateful to those in our community who immediately and unfailingly offered conference tickets, workshop seats, and coaching hours to those who were impacted by our inability to issue refunds.
Which brings us to the organization’s dissolution. Despite our best efforts, we’ve found no viable path to keeping the legal entity alive. This has led to the very difficult decision to dissolve. We have explored alternative avenues, such as Chapter 11 and Chapter 7 bankruptcy filings, but both approaches are costly and as an organization, we do not own assets or have solid revenue-generating capabilities for them to be feasible.
In August of 2024, the legal entity incorporated in Oregon will cease to exist, as will the board, together with all initiatives and events that were associated with and supported by the operational infrastructure of the legal entity (bank accounts, tax filings, payment processing, etc).
What this means is that the events side of our work will come to a close — at least this incarnation of it. The conference world has changed and the conference model is challenging to make work. There will be no Interaction 25 next year, nor another conference in the years to follow. We will no longer be able to receive donations, nor fund global initiatives.
What comes next
Though the legal entity and global events are spinning down, the community, through Local Groups, continues to be active. IxDA Oslo will be taking over the website and related assets.
We will continue to have our Slack, the website, our mailing lists, video archives, and social channels to support the work of Local Leaders who choose to continue running Local Groups.
While this has been an incredibly challenging and tense time for all of us, we take solace in the hope for a better potential future for the IxDA community, run by and for itself. We hope that — as we continue to process what has happened — we can also start planting seeds for the future.
The current board is focusing on the pressing administrative and organizational matters regarding the corporate entity. Once this is taken care of, the board will no longer play a role in the organization.
That future will belong to you, members of the IxDA community.
Andrea Mignolo, Interim President
on behalf of the IxDA board (Ana, Sami, Pablo)
