Events (small) finances

[Heebeegeetee]

Evening All,

I hope you all don't mind my posting this thread here, I don't think its strictly within the remit of the board, but I'm looking for some advice from knowledgable chaps (and chapesses) like yourselves. I would be very grateful if you could all (inc the moderators bear with me on this and give me the benefit of the considerable experience of you all.

I'm a member of a club that runs competitions and events for classic cars, and is the leading club in its field, possibly within Europe. I'm the chairman of the local regional group. Locally, we're a small band, and we get about 20 people or so to each monthly meeting.

One of our members has organised a touring event for classic cars, which was run very succesfully recently. I have no quibbles whatsoever with how things were done, in fact the whole event, though a small one, was run very professionally indeed. However, I'm not sure why, but I have a couple of concerns.

Out of the procceeds, the member has donated a sum to our local group. The member used the name of the national club to promote his event. By the time he has covered all costs, he's ended up with a few quid in his pocket, which is fine. We're only talking a sum in double figures here.

The only problem we had was that the takeup of the event was about half of what the member was hoping for. Had we got the numbers he was hoping for, then the finances would have been very healthy indeed. In this case, the member would have made a figure well up in three figures. For some reason, I am concerned about this, and I'd like some advice.

The member has clearly set out to organise the event on a commercial basis, but didn't tell us (or certainly not me) that this was his intention. Indeed, because this wasn't discussed beforehand, he would have had to bear the brunt of any loss that might have been made.

Should I be concerned about a member organising an event which could see that member earning quite a few quid out of it?

Our national club organises similar events, though I have no idea of how these are organised - I imagine they are run by larger regional groups than ourselves, and are done by committee - ours was really a one man affair. If our man builds on this event, I think that within a couple of years or so, if this event were organised in the same way, I can see our small regional club having a good few hundred quid donated to it, but our member possibly earning a four figure sum.

Should I be concerned about this?

[MGDavid]

Yes you should be concerned. If he's organised and promoted the event in the Club's name then 100% the profit belongs to the Club IMO. The Club should have a Constitution and a set of Rules, or if a limited liability company then a set of Articles of Association and other policy documents, either of which should cover event organisation in some detail. As a Regional chairman one might expect you to know all this already. One would need to know a lot more detail about the event in question to pass a view on whether it needed MSA Permit (or waiver of permit) and there is a whole complex legal picture of responsibility there too, which might emerge if there was an incident. The 'organisers' could be sued for an enormous sum and without the legal niceties being in place they could be personally liable. The parent club could disclaim all knowledge and hang you out to dry.
BTW IMO the chap should be drummed out of the club - his ethics and motives are all wrong for the club scene.

[Al Weyman]

What would have happened if the meeting had run at a loss, can I guess that the club would have had to cover this? Been in this situation actually with a co co-ordinator hell bent on making a profit, he ended up taking a ducking in the pool at the Heathrow Hotel at the annual bash for his troubles (no names please!).

[EvilPumpkin]

I think that perhaps this is a conversation you should be having with him?

It doesn't sound to me like he has any ill-intent here - he's been above board with you about the actual finances hasn't he?

So it seems to me that this is simply a misunderstanding on both sides about how this should be done.

Sit down with him, explain your position, find out what his is and come to an agreement for the future. Possible options that you might want to consider....

• Agreement will be that the Club is responsible for all monies in and out.
• Agreement will be that if he reaches above a certain profit for the event, he gets a percentage of that (a commission!).
• Shake hands and agree to part friends.

As I said, this sound to me like nothing more than a communications breakdown - and they're easily repaired if you make an effort!

[John Turner]

As long as the replies are as constructive as David's, we'll let this run, although as you say not entirely within the remit of this board. Had the individual declared his intention to retain an element of profit and not promoted it in the name of the club, that may have been acceptable, providing, as David says, the club constitution and rules had not been breached.

Good point from Al, too about who would have borne the loss. As he also says, please, absolutely no posts from anybody seeking to identify either the club or individuals involved (or providing information that would enable us to do so) because the thread would then be pulled from view very rapidly.

Edit - Please note that EP posted whilst I was drafting my response to the earlier posts!

[PeterMorley]

Financially I don't see why you are bothered - as long as he tells the tax man about his additional income!
If he goes to the trouble of doing the work of organising and running the event it seems fair that he gets something, and you don't get a lot these days for a 3 figure sum (there is a BMW garage in London that will only do an hours work for that kind of money).
Classic cars aren't charities, most people will happily pay an expert for good work on their car so why not pay someone who is good at organising events.
As long as the event is good what is the harm in paying the organiser - what I dislike are events (many classic cars shows and race meetings) that are poorly organised and the organiser is clearly only interested in profit.

Along similar lines I was talking to a historic championship organiser the other day who said that the Oldtimer meeting at the Nurburgring attracts over 100,000 spectators (e.g. British GP size), yet the competitors have to pay to compete.
That is clearly wrong and someone is (or should be) making a huge amount of money out of the event.
Small events that don't attract much income obviously require entry fees, but the large events shouldn't need entry fees to cover their costs.

Back to your point, as I said financially I don't see a problem, but as MGDavid said you do need to check out the legal implications, which could be a huge problem.
It might be better for the club to disassociate themselves from his event, or to negotiate a percentage of the profits in return for using their name (and legal status).
The national club has presumably been through this process before and should already know the answer to this question.

Meanwhile I don't think you really need worry about legal implications because the fact he used the club name does not mean the club is responsible, unless they really were involved in the event organisation.
That is the same as dodgy tradesmen claiming to be members of their governing body, they can say what they like but the truth is the truth.

[zefarelly]

It doesn't sound like there was anything untoward going on, although I think it needs to be made clear that working to make a profit on the back of someone elses club/organisation/company isn't strictly speaking good practice!

Certainly a commision on profits sounds acceptable, if the club gains then I don't see anyone has any grounds to complain. If however a loss is made then maybe that should be shared also? or the club runs a separate fund for this, that way profit can be reinvested in hospitality at the next event and a fighting fund maintained to cover any losses or unforseen expenses ?

[HiRich]

Should you be concerned that a member has made a (really quite small) amount of money from having an original, fairly popular idea, and the gumption to go through with it? No not really. Is it really any different from someone tooling up for replica parts and getting a mention in the club newsletter?

Should you be concerned about any actual or implied sanction by you club, or risk to the club's reputation? Absolutely.

However, as zefarelly notes, it doesn't appear that there is anything untoward or crooked intended. There may well be benefits from having an independently organised event (perhaps achieving something that the club's structure is too rigid to do themselves). I would also assume that there is the thick end of a year before the event is repeated. And, as I read it, it appears that all issues can be amicably resolved.

So I would suggest
1) Work out exactly what your issues are. Draft a letter that lays them out (so you can structure your thoughts), and your thoughts on how to move forward. This would include if you have concerns that might require the club to withdraw support, or if you strongly feel that the club should take over the event.
2) Call the guy, congratulate him, then explain that you have some concerns. Be positive that a solution can be found. Then send him the letter as a starting point for discussion (note: discussion, not negotiation).
3) Take him for a pint and a chat.
It would be a shame to waste a bit of entrepreneurial spirit and gumption within a club, especially if it has good intentions. Too many clubs waste such opportunities, thinking the committee should rule everything. Odds are that with the experience of this first trial run, new ideas will come out, and you and he can come up with an even better arrangement that both of you will be more than happy with.

[Woolley]

I have no knowledge of the legal side of this, but I'd have thought the words 'organised in association with' rather than 'organised by' the club would cover it nicely?

[JimW]

What, a profit (potential, not actual) running into three figures (or even four figure donations to your club!). Come on, that is hardly in the Enron scale of things.

This sounds like there is lots more behind this and we are not getting the full story. Or, if we are getting the full story, it is a non-story.

If the club concerned is unhappy at how the (lack of) actual responsibility for the event the club actually bore was represented in publicity etc., then they need to discuss it with the person concerned.

Deep breath and talk to the person concerned. Whatever the form of words used (and Woolley's sounds a good start for talks) then get behind the person actually doing something. Until then - - - relax.

Regards

Jim

[Slippy Diff]

Originally Posted by Heebeegeetee

Out of the procceeds, the member has donated a sum to our local group.

Good on him, he didn't need to but he did the right thing.

Originally Posted by Heebeegeetee

he's ended up with a few quid in his pocket, which is fine.

So you didn't mind him taking a few quid for his troubles?

Originally Posted by Heebeegeetee

The only problem we had was that the takeup of the event was about half of what the member was hoping for. Had we got the numbers he was hoping for, then the finances would have been very healthy indeed. In this case, the member would have made a figure well up in three figures. For some reason, I am concerned about this, and I'd like some advice.

Lots of 'ifs' and 'buts'. Would you have minded him taking a few quid for his troubles if it had been a three figure sum? There's a big difference between 100 and 900. Why not approach the guy and suggest that the club gets behind the next event in a big way and any money made is split appropriately, as has already been done.
I would be more concerned over whose public liability insurance he used; his own or the clubs?


I am presuming you knew he was organising an event before it was actually run? Turn this into a positive. The guy can obviously put a good event together so capitalise on it.

[Heebeegeetee]

Hi Guys,

Many thanks for your informative responses, which was exactly what I was hoping for. Many thanks. Sorry for my slow response, been unexpectedly very busy at work etc etc. Thanks too, Mods, and don't worry absolutely no names or identities will be inferred to in any way at all.

Here are some answers to some of the points raised:

I am going to have a meet with the organisor to discuss my concerns, but I wanted some knowledge beforehand - forewarned is forearmed sort of thing. Also, the guy is a businessman and I'm not, I'm your typical volunteer clubbie man, so I'm at a disadvantage here.

The event was run under an MSA waiver of permit, and from what knowledge I have of the organisor I have very little doubt that he would do anything other than run a proper and legal event.

Because he had not discussed with me beforehand the financial grounds of the event, he would have had to bear the brunt of any losses himself. For instance he had stickers made and very nice pre-event brochures etc, and paid quite a bit of money for them. I knew nothing about this beforehand, and in fact have no concern about this so long as he doesn't come asking me for money to bail him out!

Yes, I think I need to discuss further elsewhere the legal implications of running an event in this way.

I don't have any problems with a guy using his entrepreneurial spirit to organise a good event and earn some money. I can see him earning a sum in the region of £3k if he built the event up, on the basis of 60 entries at £70 a head. It just seems a bit out of kilter with our small local group. But, who knows, he may build our small group into a large one within our sporting discipline.