Starting a Race – Nonprofit Considerations

At Capstone Events, we’ve had numerous conversations with nonprofits considering starting a running event to add to their portfolio of fundraising and affinity events. Our advice to them is often received with a puzzled look: in our view, there are often more efficient ways to achieve the same objectives.

Read on to learn more about why nonprofits struggle with running events and a few alternatives that might better serve their objectives.  See an example of how an arts education nonprofit partnered with Capstone, freeing up their time and resources while still benefiting from the event financially.

Some running events are owned and operated by nonprofit organizations whose mission is to own and operate that event, and potentially other tangential activities (e.g., run club).  There are numerous examples of success stories using this model.  But in these cases, the core mission of the organization is centered around producing the event, often with the broader purpose of encouraging health within the community.

But other events are operated by nonprofit organizations who have other core missions, and the purpose of the event is almost exclusively fundraising.  There are success stories using this model, but the examples are limited, particularly when considering the volume of organizations that have attempted it.

One of the biggest indicators of success or failure with a major project or initiative is whether or not the organization is focused on it.  Does it fit with the organization’s core mission?  If it does, there is clarity of purpose, the team is aligned on the objectives and the organization’s resources can be deployed efficiently.  If it does not, it will be an uphill battle to make it successful.

We’ve heard anecdotally that many nonprofits are underwhelmed with the results after producing a running event.  There are a few reasons why:

• Organizing a running event can be a significant financial undertaking.  You might need hundreds, if not thousands, of participants to break even on the event itself.  And getting thousands of participants is very difficult to do, especially for a brand new event.  According to RunSignUp, 87.5% of 2023 running events in the U.S. had fewer than 500 participants.  Only 0.4% had 5,000 or more participants.
• In addition to the financial resources needed, it takes a lot of time to plan and produce running events effectively.  This is an opportunity cost for the nonprofit – in other words, the time nonprofit staff spend on the running event is time they are not spending on potentially higher value activities, whether that is fulfilling the nonprofit’s mission or fundraising.
• If the event is not well organized, it will likely be difficult to sustain or grow participation, and it will most likely be discontinued as the organization realizes it is not worth the time to produce it.
• There is no perfect event.  We’ve produced 150 running events and there is always something to improve upon the following year.  But we know what mistakes absolutely cannot be made and we make sure we’re as perfect as possible in those areas.  We have the experience to know where the major risks lie and how to mitigate them.  That knowledge only comes with time and repetition.

If you are a nonprofit thinking about producing a running event, or even if you have a running event but realize it isn’t accomplishing what you want, here are a few questions to ask yourself:

• What are the objectives?  Fundraising?  Engaging with organizations and people who already support the cause?
• Why is a running event the best way to achieve those objectives? 
• If you already produce a running event, how much staff time is spent on that event? Could staff use those hours in more effective ways?
• If you determine that a running event is the best way to achieve the objectives, why is your organization in a position to create an event that is unique?  
• What additional resources would you need to make the event unique and special?

In our experience, building connections within a local community is an essential part of building a special running event.  Nonprofit organizations are often in a great position to do that.  It’s in the other areas where they struggle.

On top of that, the reality is that most of the ‘income’ – the funds that actually go to the nonprofit after producing a running event – are funds that were raised on top of the entry fee.  Perhaps runners were encouraged to donate on top of their registration fees.  Perhaps the nonprofit was able to sell sponsorships to organizations that are already supporters.  When you add in the often unallocated cost of staff time, I wonder how many actually generate any income at all.

1. Partner with an existing race – we’ve seen some success absorbing a nonprofit event within a larger event.  For example, there might be a great half marathon in your community.  Adding a 5K can be pretty simple once a half marathon course is established.  Perhaps that race organizer is open to branding the 5K for the nonprofit.  This can be a win/win, allowing the organizer to build a new component of the event and add to their audience for future events while also allowing the nonprofit to benefit from an event that they don’t have to produce themselves.  It may not lead to much direct fundraising from race entry fees, which I suspect doesn’t drive income anyway, but it creates a mechanism the nonprofit can use to raise more significant funds through the event and beyond with no cost outlay.
2. Hire an event management company – Many event management companies know how to safely and effectively produce running events.  This path will create an expense for the nonprofit, but my guess is that the expense would be easily justified by the dramatic decrease in time required from nonprofit staff to operate the event.  I suspect there is limited upside to this path simply because event management companies are not marketing companies.  Again, it brings the concept of focus…back into focus.  But, if the nonprofit can spend time marketing and fundraising, the event management company can handle all of the operations.
3. Explore a more creative approach – this is best illustrated using an example.

In 2017, Capstone connected with Engaging Creative Minds (ECM), a nonprofit in Charleston, SC that focuses on arts education in schools.  ECM operated a race in Charleston, which was a well known event locally and one of their largest fundraisers each year.  Despite its fundraising value, ECM realized that the event was a significant drain on internal resources and was considering what to do with the event moving forward.

ECM and Capstone worked together to create a partnership that has allowed ECM to increase its ROI from the event without having any of the operational or financial burden.

Seven years later, the event is thriving.  It continues to be one of ECM’s largest fundraisers.  Beyond that, ECM is able to utilize the event in ways that are valuable to the organization without having to focus on any elements that are outside their core mission or capabilities.

We don’t want to discourage nonprofits from starting events.  We just want to provide some helpful advice as you consider this path. 

If you’d like to discuss this or just share event war stories, best practices and challenges, feel free to reach out to me at charlie@capstoneraces.com.