Building Your Sport Fundraising Strategy
Pink Floyd once famously sang…
🎵“Money, it's a gas
Grab that cash with both hands and make a stash
New car, caviar, four-star daydream
Think I'll buy me a football team”🎵
But what if you ARE that football team…where is your money coming from? You can either wait until a 1960s progressive British rock band buys your club, OR you can grow your sport organisation’s financial engine through an effective fundraising strategy.
Regardless of your organisation’s size - community sporting club to professional sporting team - you need a strategic approach to raising funds to drive your objectives and impact. I touched on this in my blog on becoming ‘not-for-profitable’, and that revenue need not be a dirty word within sport but rather a means of enabling positive experiences for communities.
In my work I encourage sport organisations to develop activities across seven categories - our ‘fundraising mix’, which I’ll briefly unpack and give examples of in the remainder of this blog:
Memberships
Merchandise
Events
In-kind sponsorships
Cash sponsorships
Grants
Donations
#1 Memberships
Membership fees are not the first place I’d start (it’s actually the last), but it’s often the starting place for many clubs/organisations because:
It’s the easiest to calculate (5% increase in fees = 5% increase in revenue…assuming everyone stays!); and
Frankly, they lack the creativity and appetite for risk to explore other parts of the ‘mix’.
This is of course not to say, you should never increase your membership fees. The price of bread goes up, and so do facility lighting bills and coach wages. But before hiking your membership fees, you must understand the central truth about affiliation/membership fees in sport.
People rarely have an issue with cost, they have an issue with the perceived value of that cost.
So, as I wrote about in my blog on becoming highly not-for-profitable, organisations need to consider how they can bring a proportionately equal or greater increase in perceived value to the member when considering membership price increases.
But not all members want the same things in their club membership offering, so managing the equilibrium between the cost and value of a membership is tricky. This is where segmentation via tiered membership structures is a valuable strategy for organisations to consider. For instance, a "Basic" membership could provide access to social events, newsletters, and voting rights, while a "Premium" membership might offer added perks like exclusive merchandise, additional development opportunities or money-can’t-buy experiences. By offering various membership levels, you cater to a wide range of supporters, increasing the likelihood of higher revenue generation. For more information on this, check out our blog on “Good, Better, Best” membership models in community sport.
#2 Merchandise
Merchandise can either be a fantastic revenue-booster for your organisation, or a huge inventory management pain for your finance officer. Here are some tips based on my experience to avoid the latter:
Keep it simple: The “80/20 rule” proved itself time-and-time again for me delivering event merchandise activations: 80% of revenue comes from 20% of products. So stick to one or two products / colours, and avoid niche product additions. For example, avoid offering the long sleeve tee AND the short sleeve tee; or avoid three colours of hoodie. The further you extend beyond your core 2-3 items, the more likely you are stuck with stock to write-off eradicating your profits.
Make it a collectible: One of the best examples I’ve seen here is what Rowing New Zealand have developed for their national schools rowing championships, the Maadi Cup. The event’s official hoodie (sweatshirt) has each participant’s name built into the logo, and is a must-own collectible item for every student in attendance. It requires extra effort and planning, which is more than made up for in the positive impact on brand and revenue.
Go online and offer pre-orders to manage your risk: Pre-orders create a better experience for the customer and allow you to gauge how popular your merchandise offering is.
Offer into bundles: Merchandise can be combined with other elements such as membership or events, creating ‘bundle’ packages.
#3 Events
Offering experiences to your community as a fundraising measure is a tried-and-true approach by organisations: think of the club fundraiser for a pre-season tour, or the 50th year celebration event. Common event types I see are:
Gala/social events
Challenges
Trivia nights
Fun runs
A successful event draws upon all other parts of the fundraising mix, tying in merchandise upsells, calls for donations, and opportunities for cash or in-kind sponsorships. Other components that contribute to a strong event offering are promoting well in advance, being authentic in your approach, clear on the cause, and creating a healthy sense of FOMO.
Whilst most experiences I see are user-pay, there are also opportunities to offer free events with on-the-day donation opportunities.
#4 In-Kind Sponsorship
Pause reading this blog to review your expenditure from the past two years and look at each expense category - each is a sponsorship waiting. For the right exchange in value, organisations can reduce their operating expenditure in almost any area, with common ones including:
Medical/fitness expenses (strapping tape, gym access)
Professional services (accounting, marketing or consulting services)
Signage
Food and beverage
Transport (rental cars, buses)
Tip: Understand the trade-off of cash vs. in-kind sponsorships: The retail value of in-kind partnerships will typically be at least 3-4 times greater than cash sponsorships, reflecting the mark-up most businesses apply over the cost of goods. So a footwear sponsor offering you $2000 in shoes is comparable to the same sponsor offering you $500 cash.
#5 Cash Sponsorship
The ideal situation is to gain cash sponsorship from a business, providing ultimate freedom on how you deploy the funds within the organisation. A few tips when negotiating cash sponsorships:
Try to minimise the amount of costs that fall onto you, including the cost of time. For example, who is paying for the signage? Re-branding of existing assets?
Maintain an asset register with a list of all the possible things you can monetise within your organisation, even things that are functional to the sport like
If you aren’t able to get your desired about through upfront cash sponsorships, consider rebates where your organisation makes a commission off purchases made by your community. This is a great way to have your members feel invested and like they can support their club/association with everyday purchases, and gives you highly tangible ROI data to measure the sponsorship’s success.
TIP: Look within your existing community: During one project with a grassroots association, we used a member experience survey to ask whether members had a business that would be interested in sponsoring the club. The approach generated seven frictionless sponsorship leads for the club.
#6 Grants
Grants are really just another form of sponsorship, the sponsor in this case is just typically a government body or an enterprise offering a more publicised tendering process.
Government Grants: Investigate government grants that may be available for community sports organizations. Many government agencies at the local, regional, or national level offer grants to support youth and community sports programs. The key is to research and apply for relevant grants that align with your club's mission and goals.
Foundation Grants: Research and reach out to private foundations and charitable organizations that have an interest in sports and community development. These entities often provide grants to support programs and initiatives that make a positive impact in the community. Develop compelling proposals that clearly outline how your sports organization aligns with their philanthropic goals.
In Australia, it’s important to be across grants at all levels of government (Federal, State and Local), as well as advocacy bodies.
TIP: Use our 3 “I”s when developing your ‘pitch’ for a grant or sponsorship. Inspire the prospect with your vision, inform them on key figures and context, and include them in the direction your sponsorship takes.
#7 Donations
In Australia, sport organisations are fortunate to have the Australian Sport Foundation, where almost anyone from individuals through to peak bodies can collect tax-deductible donations towards their projects. It’s almost too good to be true, and yet many organisations have never dipped their toes in the water.
I often encounter leaders that are apprehensive about including cash donations as part of their fundraising mix, with common hesitations like “we don’t want to pester our members” and “they might want something in return”.
My answer to both: “I agree!”
I never think we’re ‘pestering members’ if we’re offering something of mutual benefit, where they’re largely satisfied with our existing service, and where the benefit in this case is a feeling of goodwill/belonging from contributing to something they care about. Of course if we begin to ask weekly or monthly, this is not going to be received well.
And in terms of members wanting something in return, I think we should absolutely be accountable to deliver something tangible for the donations we receive. With this in mind, here’s two key tips for managing donations:
Have a purposeful project. A general “Future Fund” might be sufficient to get a few tax-time donations, but for maximum effectiveness and donor satisfaction you need to offer something tangible that donations will contribute towards. Perhaps your project enables coaches to gain a qualification, provides a hardship fund for uniforms, or contributes to a new stadium where you can then dedicate a brick to each donor.
Invest in storytelling. It’s important to never collect funds without a basic plan for how you’ll communicate back the impact to donors. Use a mix of both quantitative (numbers) and qualitative (human-focused with quotes, video and/or photos) to showcase how you mobilise funds, which then helps to create repeat and referral donations.
Summary
Whether you call it commercial, partnerships, revenue, fundraising - it’s all about recognising the multitude of ways your organisation can exchange value with others. That value will be a blend of visible value (merchandise, signage) and invisible value (e.g. status, feeling of community). A well-rounded fundraising strategy encompassing all seven areas we've discussed, will make a substantial difference in achieving your fundraising goals and sustaining the growth of your sports organisation.
