Stage 2

[stickman11]

The club has got ride of its debt - we have a red and blue foundation - the club really needs a club assets investment foundation - a debt demolition type event but focused on consolidating money for projects to make money and that is independent of the clubs operating needs.

The club should be profitable in itself
Secondly, a future fund of some kind that is tax deductable.

 

[Demon 16]

Any suggestions?

 

[jimmyclean]

Honestly as far as investing funds its actually fairly tough for a football club.

We essentially have a couple of options.

The easy route; pokies & pubs. The morality is obviously questionable but it is a licence to print money. That said I'm not sure about the actual licence issues and how far we could expand this part of our revenue stream.

The harder route; reinvest in the club. The idea behind this is to essentially invest in our core competency which is, football. Growing the clubs brand and support bases, perhaps even looking to create peripheral business opportunities (selling tickets to training seminars, motivational speaking to business clients etc) can increase revenue, but it won't be as profitable as the easy route.

Personally I'd rather the club grow the brand but for the club to become as large as stable as someone like Collingwood, it will take a long time and (most likely) a lot of investment.


All this said we don't actually need a really massive revenue, as long as we meet the salary cap + operating costs + small amount of investment (for future salary cap increases) we can be very competitive, in the AFL club management counts, not dollars.

 

[Syrus]

Once the club becomes successful on the field, the money will come in, by way of sponsors and members.

I think focusing on sponsorship would be the best way to go, as the word "Melbourne" can be marketed in so many ways. Even Eskimo's idea i think would/could be a very viable option.

Sucess on the field though is the key, as is very hard to market something, if it is unsuccessful.

 

[Demon Revival]

Something a little left field maybe, US property market, such a golden opportunity for real profit & capital gains to be made...

I have bought properties in USA (3 or 4 bedroom homes that require little or no renovation for between $25k - 30k & they are rented out to solid tennants for between $800 - $1000 per month...

It helps having a brother over there who is a builder & his wife a real estate agent to sort the shit from clay & of course the exchange rate is so good at present...

The Club could set up a company over there or get someone to manage it for them, it could quite easily be trialed on a small scale to test the waters...

 

[RandB]

The Red and Blue foundation is a great initiative and is tax deductible.

1. Players Development Fund: To purchase state-of-the-art equipment for our players.
2. Facility Development Fund: Help us to build elite training facilities.

A minor criticism of it is that it isn't a seemless operation to make donations. You fill out a donation form and then mail it to the club. Ok, that is not too strenuous but the cbf factor would come into play with some potential donors. With Debt Demolition we had a quick and simple way where people could make an electronic payment from the DD site so I don't see why such a facility couldn't be set up for the Red and Blue foundation. I also think that a dedicated website for R&BF would improve awareness.

A long term asset fund could be a great idea as well 'stickman11' but IMO it might get to a point where there will be so many funds that donations will merely become diluted over time but no harm in adding it as a 3rd option perhaps to the R&BF.

 

[stickman11]

Actually, I was just reading my Heartbeat mag and noticed in the David Neitz article, they maybe already onto this. Melbourne Forever Fund.

 

[Gazza_11]

Where does one get the heartbeat mag?

 

[Crusty Demon]

Once the club becomes successful on the field, the money will come in, by way of sponsors and members.

I think focusing on sponsorship would be the best way to go, as the word "Melbourne" can be marketed in so many ways. Even Eskimo's idea i think would/could be a very viable option.

Sucess on the field though is the key, as is very hard to market something, if it is unsuccessful.

This is true to a certain extent, but look at how success has not turned into $$ for clubs like the Kangaroos and Lions. Winning a premiership or two will help in the short term, but for long term, doesn't mean much.

 

[Demon 16]

Something a little left field maybe, US property market, such a golden opportunity for real profit & capital gains to be made...

I have bought properties in USA (3 or 4 bedroom homes that require little or no renovation for between $25k - 30k & they are rented out to solid tennants for between $800 - $1000 per month...

It helps having a brother over there who is a builder & his wife a real estate agent to sort the shit from clay & of course the exchange rate is so good at present...

The Club could set up a company over there or get someone to manage it for them, it could quite easily be trialed on a small scale to test the waters...

Very interesting stuff DR - have you spent Aussie dollars on this venture?

 

[Syrus]

This is true to a certain extent, but look at how success has not turned into $$ for clubs like the Kangaroos and Lions. Winning a premiership or two will help in the short term, but for long term, doesn't mean much.

I agree. The money made in the short term if invested properly (property, etc) since we now have no debts, could ensure the club remains financially sound in the years to come.

 

[ROB48]

The Red and Blue foundation is a great initiative and is tax deductible.

1. Players Development Fund: To purchase state-of-the-art equipment for our players.
2. Facility Development Fund: Help us to build elite training facilities.

A minor criticism of it is that it isn't a seemless operation to make donations. You fill out a donation form and then mail it to the club. Ok, that is not too strenuous but the cbf factor would come into play with some potential donors. With Debt Demolition we had a quick and simple way where people could make an electronic payment from the DD site so I don't see why such a facility couldn't be set up for the Red and Blue foundation. I also think that a dedicated website for R&BF would improve awareness.

A long term asset fund could be a great idea as well 'stickman11' but IMO it might get to a point where there will be so many funds that donations will merely become diluted over time but no harm in adding it as a 3rd option perhaps to the R&BF.

I think the key to this is the tax deductibility of the Red & Blue Foundation as opposed the the donation aspect of the Debt Demolition.

 

[RandB]

I think the key to this is the tax deductibility of the Red & Blue Foundation as opposed the the donation aspect of the Debt Demolition.

Are you referring to the tax deduction to the donor?

Just looked up Cancer Council Victoria and you can make online donations through Verisign (which is the system DD used) and any donation to them of $2 or more is tax deductible.

 

[RandB]

Actually, I was just reading my Heartbeat mag and noticed in the David Neitz article, they maybe already onto this. Melbourne Forever Fund.

Maybe they'll do this with a dedicated site.

Check out the Bulldogs version, it is very well presented and informative.

Notably donations via downloadable form similar to R&BF.

 

[ROB48]

Are you referring to the tax deduction to the donor?

Just looked up Cancer Council Victoria and you can make online donations through Verisign (which is the system DD used) and any donation to them of $2 or more is tax deductible.

Yes I was.

I think the difference is, the majority of donations to the Cancer Council would probably be fairly minor in nature and most of the participants would probably not even bother claiming the tax deduction. Donations for the R&BF are usually more substantial and those made by companies would probably prefer a more visible paper trail and would most definitely be claiming it on their tax returns.

 

[RandB]

Yes I was.
Donations for the R&BF are usually more substantial and those made by companies would probably prefer a more visible paper trail and would most definitely be claiming it on their tax returns.

I agree with that Rob and that payment option should be available for the larger donors (no arguement there).

DD however showed that every little bit adds up so a similar regime would mean not missing out on the full spectrum of donations which (if perpetual) would add up over time. Essentially cap into both areas so the smaller donors (which is where the cbf factor is highest) have a more seemless method which better reflects their donation amount eg $20 or $50 as opposed to thousands of dollars of the corporate entities and wealthy stakeholders.

 

[Demon Revival]

What about offering to be in the team photo??? How much would each of us be prepared to pay for a framed team photo with you in it??? How many photos do you think they could market???

 

[jimmyclean]

Ideas time!

How about special colored membership cards that indicate you've donated $20 or so dollars.

Sell 10,000 of these and thats an extra 200k in the bank a year, for virtually no cost.

 

[ROB48]

I agree with that Rob and that payment option should be available for the larger donors (no arguement there).

DD however showed that every little bit adds up so a similar regime would mean not missing out on the full spectrum of donations which (if perpetual) would add up over time. Essentially cap into both areas so the smaller donors (which is where the cbf factor is highest) have a more seemless method which better reflects their donation amount eg $20 or $50 as opposed to thousands of dollars of the corporate entities and wealthy stakeholders.

That would be a good idea, perhaps the only barrier may be the processing of the donations to the R&BF; the money actually goes to the Australian Sports Foundation Ltd for the benefit of the Red and Blue Foundation project, one that you specify. The tax deductibility is the donation going to the ASF and they, in fact, can direct that money to wherever they like but they will in almost all cases, direct it to where you have requested.

The R&BF have to make an application to the ASF for the money that has been donated, to be allocated to them for a specific project. This is how the 150 club operated the money was paid to the ASF and then the R&BF put in a request for the funds so they could build the Gym at the new facility.

I'm not sure if the ASF would have the facility to accept donations under the circumstances you've mentioned but I will send an email to John Poulakakis at the club to see if it can be done.

 

[Demon Revival]

Ideas time!

How about special colored membership cards that indicate you've donated $20 or so dollars.

Sell 10,000 of these and thats an extra 200k in the bank a year, for virtually no cost.

Not bad Jimmy... Upon signing up , there could be a box to tick to include the $20 donation...

 

[RandB]

That would be a good idea, perhaps the only barrier may be the processing of the donations to the R&BF; the money actually goes to the Australian Sports Foundation Ltd for the benefit of the Red and Blue Foundation project, one that you specify. The tax deductibility is the donation going to the ASF and they, in fact, can direct that money to wherever they like but they will in almost all cases, direct it to where you have requested.

The R&BF have to make an application to the ASF for the money that has been donated, to be allocated to them for a specific project. This is how the 150 club operated the money was paid to the ASF and then the R&BF put in a request for the funds so they could build the Gym at the new facility.

I knew that R&BF worked through the ASF but I had no idea of the complexity of it all, thanks for explaining.

It appears that R&BF is a trust so once the funds reach them they technically could use them in anyway they see fit couldn't they (with MFC as beneficiary)?

I'm not sure if the ASF would have the facility to accept donations under the circumstances you've mentioned but I will send an email to John Poulakakis at the club to see if it can be done.

I get the feeling that it is probably not viable from what you say.

It sounds like such a facility would have to be direct to the club (trust) and donors would miss out on the tax deduction. As you say though, most people who make small donations probably wouldn't care about the tax deduction - I know I wouldn't.

 

[ROB48]

I knew that R&BF worked through the ASF but I had no idea of the complexity of it all, thanks for explaining.

It appears that R&BF is a trust so once the funds reach them they technically could use them in anyway they see fit couldn't they (with MFC as beneficiary)?


I get the feeling that it is probably not viable from what you say.

It sounds like such a facility would have to be direct to the club (trust) and donors would miss out on the tax deduction. As you say though, most people who make small donations probably wouldn't care about the tax deduction - I know I wouldn't.

The R&BF have two registered projects with the ASF and they are both for the development of facilities for the players and the club so I guess technically they could use the money for what they require as long as they fit this criteria.

They can't use it to pay down debt or for other purposes and I would imagine that they would have to indicate what they were going to do with the money before they get it.

Unfortunately payments to the club are not tax deductible so that doesn't suit some.

 

[RandB]

The R&BF have two registered projects with the ASF and they are both for the development of facilities for the players and the club so I guess technically they could use the money for what they require as long as they fit this criteria.

They can't use it to pay down debt or for other purposes and I would imagine that they would have to indicate what they were going to do with the money before they get it.

Unfortunately payments to the club are not tax deductible so that doesn't suit some.

I've had a look at the ASF site a little (good exam procrastination ) and it sure is a very rigid set up.

Also double checked DD and made a mistake, got Verisign mixed up with IMG which is what DD used and it had a disclaimer that donations were not tax deductible (as you mention).

I still think a dedicated website for R&BF or Melbourne Forever could be a good idea. At the start of the donation process have a "Do you wish to claim a tax deduction for your donation? - if not you can donate directly online" reference.

Click Yes and the ASF donation form appears, click No and you are directed to the IMG website (similar to DD). DD not only showed how many people were willing to chip in (be it pocket money or something more substantial) but it showed that the tax deduction was not crucial. There obviously won't be as many smaller donations as with DD but it is at least an option, only factor is the cost of keeping the payment facility open with IMG.

 

[ROB48]

I've had a look at the ASF site a little (good exam procrastination ) and it sure is a very rigid set up.

Also double checked DD and made a mistake, got Verisign mixed up with IMG which is what DD used and it had a disclaimer that donations were not tax deductible (as you mention).

I still think a dedicated website for R&BF or Melbourne Forever could be a good idea. At the start of the donation process have a "Do you wish to claim a tax deduction for your donation? - if not you can donate directly online" reference.

Click Yes and the ASF donation form appears, click No and you are directed to the IMG website (similar to DD). DD not only showed how many people were willing to chip in (be it pocket money or something more substantial) but it showed that the tax deduction was not crucial. There obviously won't be as many smaller donations as with DD but it is at least an option, only factor is the cost of keeping the payment facility open with IMG.

In the first year of the DD the club produced a "Foundation Heroes Business Directory" and any of the initial Foundation heroes could put their company details in there allowing them to claim the cost as advertising, making it Tax Deductible. I don't know why they stopped this after the first year but I'm sure they would receive more money for "Advertising" if they continued it.

 

[ROB48]

I've had a look at the ASF site a little (good exam procrastination ) and it sure is a very rigid set up.

Also double checked DD and made a mistake, got Verisign mixed up with IMG which is what DD used and it had a disclaimer that donations were not tax deductible (as you mention).

I still think a dedicated website for R&BF or Melbourne Forever could be a good idea. At the start of the donation process have a "Do you wish to claim a tax deduction for your donation? - if not you can donate directly online" reference.

Click Yes and the ASF donation form appears, click No and you are directed to the IMG website (similar to DD). DD not only showed how many people were willing to chip in (be it pocket money or something more substantial) but it showed that the tax deduction was not crucial. There obviously won't be as many smaller donations as with DD but it is at least an option, only factor is the cost of keeping the payment facility open with IMG.

I spoke to the club this morning and they are launching a new program at the end of the month or early next month; it will be run by Neita and will include Football, Community and Charity. You can donate to player development which includes things like a new hypobaric chamber or the cost of high altitude training or other areas of sports science. Or you can contribute to the Community programs the club is involved in or the Charities they support like Reach etc.

Unfortunately the cost and time involved in setting up the trust is just too much so they will continue to piggyback on the ASF. Just on that, the club have to spend the money on the projects they have earmarked to the ASF and they are reimbursed once the club provides receipts, so they have to spend first and collect later.

BTW They felt the Foundation Heroes Business Directory was maybe sailing too close to the wind to be a tax deductible item, so it won't be reintroduced.