Sources of Funds
Membership Funds
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 membership.
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.
Event Fees
Sport and recreation
events, whether they are organised a profit or not-for-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 event.
Events may include tournaments, championships, fixtures and other
special competitions.
Program Fees
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.
Fundraising
Generally this source of income for recreation organisations is restricted to not-for-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.
Government Grants
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 participate in a sport of their choice. Costs that may be funded include:
- Building or improvement of facilities
- The salary of a professional administrator so that the organisation can improve and increase the level the services it provides
- The staging of coaching courses (more coaches means more clubs and more opportunities for people to participate).
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
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:
- On billboards around the ground and/or on the players shirts
- In publications and/or printed materials produced by the sporting organisation
- On the sporting organisations web site (if they have one).
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.
Sales
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 wishes to sell alcoholic beverages a Liquor License is required.
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 or championship.
Gaming Machines
Since 1993 not-for-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.
Hire of Facilities
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.
Interest
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.