In the not-for-profit sector, participation in organised sport and recreation usually requires an individual to be a member of a sporting club or association. The principle reason why sporting clubs and associations exist is to organise activities, events, programs and coaching for their members.
Schools also provide sport and recreation for their own students, who may also be regarded as "members" although no specific fee may be charged to participate.
Membership fees also apply in the profit sector. Membership fees will be a very substantial part of the income of a golf club and almost all the income of a Health and Fitness centre.
Sport and recreation events, whether they are organised a profit or non-profit organisation, generally require participants to pay fees to take part. In normal circumstances event fees are set at a level to recoup all the costs of running an event.
Events may include tournaments, championships, fixtures and other special competitions.
In addition to events, sport and recreation organisations organise programs of a non-competitive nature. These programs may be purely for participation or for instruction of the participant i.e. coaching. Especially in circumstances where coaches/instructors are hired, or where expensive equipment is utilised, the recreation organisation must recoup costs by levying a charge.
Generally this source of income for recreation organisations is restricted to non-profit organisations. Fundraising though activities such as art unions, raffles, pie drives and fundraising dinners are often organised to pay for the cost of interstate travel of representative teams or to fund new building projects. Fundraising often requires a "good cause" to work best.
Many not-for-profit organisations depend to a large extent on the supply of public funding (government grants) for their existence. Typically governments tend to fund costs associated with the development of sport and recreation i.e. increasing the access and opportunity of ordinary people to
Where the facilities are owned, or are likely to be owned by a profit organisation, it is expected that such organisations will raise the necessary funds through normal business processes e.g. bank loans. However when such facilities, or the activities that are organised within them run into financial difficulties, government funding can sometimes be forthcoming if it can be proved that it is in the community's interest.
Sponsorship can be a normal and major source of funds for some sports organisations and virtually non-existent in others. Typical ways that sporting organisations earn sponsorship revenue include exposure of the sponsor's logo:
Whether an organisation, profit or not-for-profit, is able to achieve an advantageous level of sponsorship will depend on factors such as the number of participants and media profile.
Not-for-profit organisations are entitled to sell items for profit provided all the proceeds are ploughed back into the organisations general revenue for the improvement of facilities and services for its members. Items that are commonly sold include sports clothing and equipment, food and beverages, and coaching manuals but anything may be sold if the organisation is confident it can make a profit. If the organisation
A special form of sales is merchandising. A typical example of this is where a sporting organisation makes for resale a range of clothing with a club insignia or a special insignia to commemorate a special event e.g. a tournament
Since 1993 non-profit organisations in Queensland have been able to apply for a license to install and run gaming machines in their own club premises. Organisations need to have a liquor license before they can do this and an application does guarantee that a gaming machine license will be granted.
In fact the costs associated with running gaming machines are such that they are not a license to print money for the club. Most of the money goes to the government in the form of taxes and other levies.
For organisations that own facilities, indoor or outdoor, the hire of their facilities to outside groups can be an important source of revenue. Indoor sporting venues can also be used by other sport and/or non-sport community groups. Outdoor venues e.g. playing fields are usually owned by a municipal council and leased to a sporting organisation. Hiring outdoor facilities owned by municipal councils will generally require permission from the council. Outdoor sporting facilities may also be owned private landowners.
For those organisations that have considerable financial cashflows, some worthwhile revenues can be made from the depositing of money in interest-earning accounts. Although interest rates for deposit accounts are less than 5% these days, the investing of grants received from government until the money is needed is an easy way to make an extra $1,000.
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