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September 2021

The Win-Win of Charitable Tournament Hosting

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By David Gould

Spot a golfer on any fairway and you know they’ve arrived there one of two ways—as an individual player or as part of a group outing.

Group business has long been a welcome source of bulk sales, prepaid deposits and lower cancellation risk than you get with open play. But in the early 2000s, a big chunk of group golf activity basically disappeared: the corporate side. Scandals involving lobbyists who took Congressmen on lavish junkets dealt a blow, turning golf into bad PR for executives. Then came 2007’s knockout punch: the collapse of the mortgage-lending market and a miserable recession to follow.

What remained by way of group golf were charity fundraisers—plus a bachelor party here, a class reunion there, and the Rotary Club’s annual outing. Per-round revenue has seldom peaked during a 501(c)(3) group’s outing, even in the face of manpower requirements that bump up operating costs, especially with shotguns. But the effects of Covid-19 have helped repair some of the damage to group-outing profits, giving rise to the question of what comes next for this evergreen facet of the golf operation.

Steve Harker, CEO of Touchstone Golf, took notice as Covid-19 swept in and impacted the fee structure of group outings, just as it had for open play. “For the first time in 15 years our pricing power increased,” says Harker. “That gave us new flexibility as to where on the tee sheet these tournaments would go. If a group held their 2019 event with a weekend afternoon shotgun at $50 per player, and they asked for that same deal in 2020, we would tell them it’s $65 per player, plus a mandatory banquet.”

At Willingers Golf Club in Northfield, Minnesota, general manager Cody Mager has his outing rates and policies “pretty much set in stone,” where previously they had been quite negotiable. With a quick glance at the Willingers website, groups learn that 72 players are required for a full shotgun and 36 for a morning shotgun.

First-time fundraiser groups have to be managed attentively, if for no other reason than their tendency to project a turnout of 80 to 100 that ends up being half that. Groups that return each year, in Mager’s experience, negotiate realistically. “They tend to understand that if they’re looking to play at a particularly busy time,” he says, “the rate could well go up. At our facility, it basically will never go down, unless they decide to walk instead of ride.” He finds he’s particularly glad to work with groups that bring a strong volunteer corps. “The job is always to make sure customers feel at ease and enjoy themselves,” says Mager. “If there’s extra personnel beyond our own staff helping make that happen, it’s a plus.”

Clear communication and a protective attitude toward your bottom line goes a long way in event planning with charities. But revenue-management tools, like the ones designed to maximize return on individual play, would certainly help the cause. And indeed there is a push to make outing business more data-driven, so that it can be handled by group-sales people in a truly budget-conscious manner. Companies like Marriott Golf have made the effort to integrate tournament group play into their machinery for strategic revenue management, ideally with dynamic-pricing tools that turn an outing player into the equivalent of an airline passenger buying a seat in coach.

The industry’s management-solutions providers enjoy a similar opportunity. At least one of them, Sagacity Golf, has moved to leverage it. Through its software program called Group, Sagacity helps client courses generate sharp-pencilled outing quotes via a series of calculations based on current and historical data. Loading up factors such as group size, date requested, time of day and ancillary spend will generate a solid quote, one that can then go up or down with the click of a mouse based on changes that get negotiated or that occur as a matter of circumstance. Among the many advantages that Sagacity touts for its Group program is credibility with tournament organizers. In other words, the organizer can feel confident they’re being shown a price based on solid fundamentals.

All this is not to say course operators can’t opt to provide discounts or extra services if they feel it’s in the long-term interest of the operation. In the years since the corporate side of group play faded, the economic value of good works and affiliation with good causes has risen dramatically throughout the U.S. economy.

“Cause marketing,” the persuasion technique behind all those breast cancer ribbon logos on Dial shampoo, Swiffer mops and pink Pinnacle golf balls, is a $2.2 billion business. A survey by the Porter Novelli consumer research group found that 73 percent of Americans would buy a product identified as “giving back to important causes” over a product not identified that way. And so there’s a “halo effect” that comes with generosity to worthy causes, one that’s been growing stronger over time and shows no sign of slowing down.

Course operators have known this intuitively, as attested to by Pat Kelley, a principal in the 15-course Advance Golf Partners management group. “When you work with 501(c)(3) groups, you’re engaged in community relations, and that’s important,” says Kelley. “We always want to be good members of the community, for a lot of reasons. It gets noticed, and it can definitely be a positive for your business.”

A cause marketing expert would agree, but they’d likely add that golf facilities miss a big opportunity by doing business with dozens of charitable organizations but never integrating a particular cause into their brand identity. Contrast any high-end daily fee or semi-private with a PGA Tour event like the one held in Memphis every August. People know without being told that it’s the FedEx St. Jude Invitational and that it benefits St. Jude Children’s Hospital.

On the PGA Tour’s website there’s a landing page for every tournament, and “Charity” is one of the five buttons on top of each of those pages. Messaging that associates each tour stop with its chosen worthy cause gets hammered out on a regular basis, and in the public mind there’s a strong link between the event and its charity. It works well for the PGA Tour’s business, so couldn’t an upscale daily fee course have a “signature” cause that people associate with it?

Harker was a senior executive at American Golf years ago when the company tried to address this issue through its adopt-a-charity program—one worthy cause taken on and supported by each facility under AGC management. He was instrumental in rolling the program out and recalls it as a successful effort, albeit with relatively modest goals.

“It was a company-culture initiative,” Harker says. “We were looking for ways to build bonds both internally and with the communities that each of our courses served. Our managers responded to it, and they were able to create programming that sustained the focus on their chosen cause. Currently at Touchstone we continue to bring that same energy to community building, on a less structured basis.”

Kelley brings up the fairly common scenario in which a public golf course adopts a good cause informally  perhaps even inadvertently. A Cincinnati course that’s part of Advance Golf’s portfolio to this day continues its good works on behalf of an employee who suffered a profound family tragedy, even though the event predates Advance’s connection to the facility. “The previous owner was heavily involved in the charity so once we took over, we grandfathered in all of its favorable treatment,” Kelley says.

At Touchstone Golf there’s a simple but intriguing twist on group business that involves worthy causes. This spring’s “Pot of Golf 4-Player Best Ball” at the company’s Redwood Canyon Golf Course, east of San Francisco, is a good example. The idea came out of Harker’s belief that there is “an appetite for course-created events, both charitable and non-charitable.”

In this case, a 501(c)3 nonprofit called Unravel Pediatric Cancer is looped in for a share of the proceeds, but the golf event is designed, organized and executed by the golf staff. Doing it that way allows for creativity that a once-a-year tournament group probably couldn’t have come up with. It also places a footprint on the tee sheet that works fine within the facility’s revenue-management equations, and it brings the golf course’s own database of players into the prospect pool. “What are new and returning golfers looking for?” Harker asks. “They want group experiences, they’re drawn to support good causes, and they take our marketing effort as a golf invitation, which is what it really is.”

One Chicago-area golf professional, Mike Hainline, has a career path that’s given him an unusually broad perspective on 501(c)(3) groups and how they impact a public golf course’s P&L. Before signing on as head professional at the Odyssey Golf Foundation Golf Course, in Tinley Park, Illinois, Hainline worked for decades at public and private courses of many varieties. His current position is at one of the country’s growing number of golf facilities that are founded on (or dedicated to) a charitable cause.

Hainline’s employer is itself a 501(c)(3), functioning on behalf of military veterans and citizens with special needs. The tee sheet at their course features (Monday through Thursday) any number of charitable groups that receive the standing special rate of $30 per golfer, which covers green fee and cart fee both.

“The founders wanted this course to be in heavy use,” says Hainline. “Their attitude is, ‘Bring us enough people in recovery and enough groups from charitable organizations so that our operating budget ends up in the red every year.’ From the start, there’s been a therapeutic nature to this operation,” he says. “It’s the cornerstone of who and what we are.”

Between the branding of the Odyssey course and its significant rate breaks for good-cause groups, an extra-big share of the outing business in the region goes to this facility. And in the public mind there’s an extra-strong link between Odyssey and good works. American Dunes Golf Club in Michigan is similarly purpose-built, while Harbor Shores (also in Michigan), Cedar Crest in Dallas and East Lake in Atlanta all belong, to a greater or lesser extent, to this special niche within the industry. But Hainline doesn’t forget his long years working at conventional, for-profit golf facilities, and the discipline required to make sure group outings raising funds for charity don’t contradict the business model.

“Everywhere else I’ve been, the conversation always starts with the representative saying his outing is for a good cause and can they get a discount,” Hainline recalls. “You have to be careful how you respond, because word gets around that you did a favor for a particular group. You’d have to be ready to do something equivalent for the next group.”

Interestingly, an Illinois company called Swing King has cherry-picked one classic feature of the group golf experience and built an entire business around it, using a cause-marketing element to enhance its own success and the success of its partner golf courses. A golf course signs on with Swing King to stage daily hole-in-one contests for recreational play, with prizes ranging from $1,000 to $25,000.  At some courses, players can opt into the contest by paying a small surcharge on their green fee. It’s also possible to build the contest fee into the green fee, so that everyone on your course that day is eligible to win the hole-in-one prize, typically $2,500. It wasn’t long before Swing King realized its mission wasn’t complete and opted to make charitable giving an element that runs throughout the program.

“Our contests add a new level of fun and gamification to golf while building on the history and tradition of the game,” says Mike Jakob. “But golfers have historically been the most giving of all sports participants, and golf generates an estimated $3.9 billion annually for charities. I wanted our contests to embrace that tradition, so we added a charitable component to our Par-3 Challenge back in 2017.”

Under that arrangement, Swing King gives 10 percent of its profits, 10 percent of any hole-in-one prize and 100 percent of all donations received to its charitable partners. “Since adding this program, we have raised over $650,000 for the charities we’re involved with,” says Jakob.

Touchstone Golf is creating its own fundraisers—using the programming and tournament-management skills that only veteran operators possess—then finding charities who want to partner up. Swing King has leveraged a time-honored golf-outing gimmick and used it to build a business, boost revenues at partner golf courses and write checks to worthy causes. Golf outings that serve 501(c)(3) groups will always be with us, but they could use some further innovation along these lines. The idea is to connect fundraising events to your core audience and, in the process, to gather up as much well-deserved goodwill and halo effect as possible.

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