The Fund Raiser

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By Mark J. Drozdowski

Last summer I played in six charity golf tournaments. I'm not complaining, mind you. Spending a "work day" on the golf course, playing free, isn't a bad gig.

I managed to lower my handicap, support local nonprofit groups, and collect polo shirts I will never wear in public. No, I don't object to playing in tournaments. What bothers me is running one.

Each year we host a "scholarship scramble" golf outing that raises money for, you know, scholarships. It's a popular event that attracts local business leaders, our board members and vendors, and other pillars of society. Everyone has a good time, even the hackers.

In a scramble, you may know, players are divided into teams of four and all of the players tee off on each hole. But then they get to hit the best shot of the foursome from tee to green. So if you shank a drive into the woods or plunk one into the pond, there's an element of forgiveness. Many players unfamiliar with the middle of the fairway enjoy the opportunity to visit formerly untrodden ground.

We run our tournament just like all the others. People buy foursomes or individual slots, which run anywhere from $150 to $400, depending on the charity and the chosen course. Companies purchase tee signs showing their commitment to the cause. And lead sponsors can underwrite costs such as cart rentals or meals.

Golfers arrive an hour or so before the tee time, at which point they meander through the registration line to pick up their tchotchkes, purchase an arm's length of raffle tickets and buy the team's mulligans, a $20 charge for sanctioned cheating. Players then hit the driving range and putter around on the practice green.

It's a great time to catch up with acquaintances you haven't seen since the last tournament, two weeks before. Conversations continue in the clubhouse (hats off, please) over a quick lunch, after which players retire to their carts and brace themselves for the "shotgun" start. A shotgun format requires each foursome to begin on a different hole; the groups starting on nine and 18 get their clubhouse beers first.

Five hours later, golfers return their carts, submit their scorecards, and get ready for the evening's festivities. That normally includes a buffet dinner, a silent auction and perhaps a live one, a drawing of raffle prizes, and a five-minute speech reminding them of the cause they are supporting. Winners of various competitions, including longest drive and closest to the pin, are revealed. Also crowned is the winning team, which proudly sports the title "sandbaggers" until the next year.

Like everyone else, we try to book our tournament for a sunny day. That plan went awry this year, though. We had to reschedule the event because, following two weeks of Biblical rain, the course manager offered us canoes instead of carts.

But our day came and went without a hitch, and everyone went home content. Except me.

It's not that I didn't enjoy the day. I did. I got to spend the afternoon yukking it up with colleagues, donors, and volunteers. A tournament presents an opportunity to raise the profile of your institution and highlight its value to the community. But it's not a great fund-raising enterprise.

Let's do the math. We charge golfers to play, and the course charges us almost as much. We charge them to eat, and the course charges us. We collect gifts to auction, and we purchase gifts to give away. When all the dust settles, we net anywhere from $5,000 to $15,000.

Most of the money that comes in counts as revenue, not gift income, because people are receiving something in return -- golf, meals, trinkets, advertising in the program. So a company spending $750 for the day might actually be contributing less than $100 for the good of the cause. And that's what they get to claim as a tax write-off.

Just charge more for the golf, you say? It's not that easy.

There's considerable inelasticity governing our pricing scheme. We can't readily charge more than other nonprofit organizations holding tournaments on the same private course. Plus, many of our golfers are members already, so they're not buying the opportunity to play at an exclusive venue.

If we raised the price much more, fewer people would play (remember Econ 101?), resulting in less net revenue. And if we switched to a more plebeian course, which would cost us less to rent, people wouldn't be willing to spend as much.

Any way you slice it, it's not a fabulous moneymaker. We would surely realize a sizable profit if the country club donated the course and the food for the day, but that's not happening. Every college I have worked for has run such tournaments, and all have yielded similar results.

This irks me for two reasons. First, we dedicate an inordinate amount of time to raising 10 grand. If you calculate the number of work hours involved, we barely break even. Staff members running the tournament spend months planning every detail, gathering auction items, selling sponsorships, producing brochures, and managing logistics.

The return on that investment of time and energy doesn't seem worth it. Could the same staff members, spending the same time and energy cultivating annual-fund gifts, have raised more than what the tournament netted? Probably.

Second, we cannibalize our own donors. Instead of asking a small company to contribute $750 for a day of golf, of which only $100 will join a scholarship pool, why not just ask them for the $750 outright? We would realize the entire amount for scholarships and the company would, in turn, realize the full tax benefit.

Without the quid pro quo, it's called philanthropy. And why not ask for both, you may suggest? Because many of the donors already consider the golf sponsorship their annual contribution. They are supporting the college and its students by playing golf. Only not really.

Absent the tournament, we might raise more money, and certainly more of it would reach its intended targets. But we will continue holding one because it's smart development, even though it's not smart fund raising.

Development, in the broadest sense, means building relationships that advance the institution. Through the tournament we broadcast the college's name and advertise the need for scholarship support. People feel good about the day and, in turn, feel good about us. We may, in the long run, reap rewards from those relationships because of the seeds we have sown. For that reason, the golf tournament -- or any special event, for that matter -- is valuable.

I just wish we would stop promoting the tournament as our signature fund raiser. It's more of a friend raiser. We net a few bucks to help our students. That's wonderful, something we should trumpet to our boards. But we should stress the broader potential of the relationships we are cultivating and focus less on the dollars raised. The cost-benefit equation will seem far more palatable.

Next summer's tournament marks the 10th anniversary of our scholarship scramble. Friends of the college are already looking forward to it. But do they enjoy participating because it's a fun day out of the office spent with friends and peers, or because they know they're doing something special for our students?

What do you think?