NANCY M. LEVENBURG
PLIGHTS AND INSIGHTS
Nancy Levenburg, PhD, is a recently retired professor of management in the Seidman College of Business at Grand Valley State University in Grand Rapids, MI. She has published numerous articles in business and professional journals and has assisted over 200 organizations with strategic planning, marketing strategy, and improving operations. She is the president of Edgewater Consulting and is a member of Spring Lake Country Club in Spring Lake, MI. For more information, contact her at: levenbun@gvsu.edu or (616) 821-5678.
The Cost of Golf Outings Fidelity Charitable, a 501(c)(3) public charity that helps donors maximize their generosity through a donor-advised fund, maintains that “the COVID-19 pandemic has upended daily routines and impacted communities across the world in unprecedented ways. No corner of our society has been left untouched by the effects of the pandemic, including the nonprofit sector.” According to Fidelity’s research, 54 percent of donors plan to maintain their level of giving because of COVID-19 and 25 percent plan to increase it. This means that 21 percent will likely decrease their giving. (100 percent - 54 percent - 25 percent = 21 percent.) Fidelity’s data seems to jibe with FastCompany, which reported that two in five households (40 percent) said they’re receiving less income since the pandemic started, and one in five (20 percent) stated they “have given less to charity recently compared to before the pandemic.” One thing we don’t know, however, is how amount of giving varies by intent to continue giving; that is, are those who plan to – or actually did – discontinue giving the large donors or smaller ones? Nevertheless, this begs the question, where (and to whom) do nonprofits turn when donors’ giving declines? And the answer for many nonprofits is to hold special events – like golf outings – to bolster COVID-depleted coffers. In fact, it’s estimated that over 800,000 fundraising golf events are held annually in the U.S., netting over $300,000 in some cases, depending on committee members’ community connections, the reputation of the course, special events (e.g., a pro-am), sponsorships, and special add-on events, such as silent auctions. So numerous nonprofits have sought to host their golf fundraising events at their local country clubs. And for the past several years amidst waning membership levels, those country clubs have been enthusiastically offering up their facilities to the public to help offset operational assessments by balancing club deficits with nonmember revenues. So while golf fundraisers are revenue-generators for the charitable organization, are they also moneymakers for the private club? It’s a good question… and one that I’ve rarely received a straight answer to from clubs’ board members. Yet, private clubs typically tout outing participants’ nearly unrestricted use of the club’s facilities (“Host your event in our newly renovated ballroom!”), often including everything from curbside bag drop, use of locker rooms, driving range, putting green, and practice chipping area. Revenues are typically based on an amount for green fees, golf cart rental, meals served, and any service fees/gratuities… all of which are variable costs; that is, they depend on the number of participants in the event. (Fees may also vary depending on the day of the week, with Mondays being the cheapest and Fridays and Saturdays generally being the highest priced. And many clubs require confirmation of the exact number of participants a certain number of days in advance.) 104
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However, other costs incurred by the club are not quite so variable. So, are these costs also appropriately factored into pricing outside events? That’s the question. For example, • Beverage cart. Will a beverage cart circulate during the event? Clearly, the revenues gained from selling foods and beverages (especially alcoholic ones) from the cart will be incremental to the club, and this could be a big money-maker. But what about the wages for the cart driver? To what account will those wages be charged? • Outing prep/set-up. Among other things, this includes preparation of scorecards and rules sheets, preparation of cart signs and staging of carts, sign placement and recovery of proximity prizes, postevent scoring, awarding of prizes, and so on. Obviously, pro shop staff will be heavily involved in preparing for and hosting an outing… how are their time, effort and materials accounted for? • Food service. If the outing has 100+ participants, who – and how many of the kitchen and banquet staff – will be involved in setting up for, serving, and cleaning up after guests? And, since many private clubs’ F&B operations are closed on Mondays, is the added expense of workers needed for the event covered by fees charged to outing organizers, or is it absorbed by club members? (Further, since the ability to play golf for free on Mondays may be an important fringe benefit for country club employees, usurping this day of the week could be robbing those employees of one of their favorite perks.) The Chronicle of Philanthropy reported in 2020 that 73 percent of charities worldwide experienced a decline in contributions. Given this, alongside the increasing interest by many private clubs in attractSEE PLIGHTS AND INSIGHTS | 117
