The keys to success: honesty, accountability, and sustainability
Nobody likes to talk about money, but the bottom line is that for this initiative to work, it will require generous donations (financial or otherwise) to achieve its ultimate goal of self sufficiency. It is our hope that, as the Ragged Mountain Racing matures, many of our athletes will generate enough income through prize money and sponsorships to support themselves and their training efforts. Until then, however, it will rely on those organizations and individuals who believe that its goal (improving the state of distance running in the US) is worthy of their generosity. Before any person or organization makes a contribution (financial or otherwise) to a project such as this, they would want to be reassured that their donation will be used wisely. Thus, we would like to share with you an outline of our “business plan,” not because this is a business (it is certainly not), but because we’ve developed a financial model that we believe will allow this group to ultimately become a permanent fixture of the Charlottesville community.
1) We are incorporated in the Commonwealth of Virginia as a non-profit organization (NPO).
2) We have “tax-exempt” status from the IRS (501c3). Any gifts, income, sponsorships, etc. are tax-exempt, as are any donations. For more information on IRS treatment of “Amateur Sports Organizations,” which we are considered, see IRS Chapter 25.26 – the important part is as follows,
Some organizations provide financial support for athletes who are in the organization’s athletic training programs. The forms of support may include stipends, payment of living expenses, housing, and scholarships. Aside from the question of inurement or private benefit under IRC 501(c)(3), whenever the national governing body of the sport involved does not consider the type of support paid to the athletes as destroying the athletes’ eligibility to participate in competitions as amateurs, the Service will also recognize such athletes as amateurs in the application of IRC 501(j). Such an organization fits the definition of an “amateur sports organization” within the ambit of the Amateur Sports Act of 1978, which establishes the United States Olympic Committee and regulates the United States’ participation in the Olympic Games.
3) Approach potential donors for contributions (financial or otherwise). Those who make financial contributions will be given the option to contribute to the endowment or to the group’s operating budget for the year. All of this would happen in parallel with development of the athletic side of our organization – our athletes, as the team improves, will earn increasing amounts of prize money as well as secure substantial shoe contracts, which will eventually become a reliable source of income and decrease their “operational costs.” It is important to note that, unless they have signed a substantial contract with an athletic shoe company, we expect our athletes to work part time – this will allow them to pay for many of their own “operating costs.” However, an important element of this organization (and other similar organizations), is that it frees the athletes from the constrictions of a normal 9-5 job, allowing them to balance part time employment with time-intensive training (in some cases exceeding 110 miles/week in addition to substantial weight, core, and flexibility training). As a point of interest:
Total Estimated Operating Costs (per athlete/year)
- Housing: $4200 ($350/month per room in 4 BR apt)
- Food: $3000 (110 miles/week = 572,000 calories/year)
- Health Insurance: $3600
- Gym Membership: $480
- Shoes: $1373 (110 miles/week = 11.44 pairs/year)
- Travel: $3600 (6 trips, $600/trip)
- Total: $16,253/year