Non-Profit Sports Sector: Challenges and Opportunities

NON-PROFIT SPORTS SECTOR 1
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NON-PROFIT SPORTS SECTOR 2
NON-PROFIT SPORTS SECTOR
Introduction
Non-profit sports organizations are those organization that does not have profit creating
objectives. They receive funding from donors for them to remain functional. Their leadership is
voluntary. Although the existence of these organizations is common, most of them tend to move
towards profit making due to the different preferences of the members and also changing
environmental and political climates, that exposes the organizations to several challenges like
lack of adequate funds (Kong 2008, p. 281-299).
Nature of the organizations
Sports organizations which are not focused on achieving profit, but they are aimed at
empowering the young generation by growing their talents and abilities. They mostly occur in
the form of associations. Their major source of income is donor funds. They are also aimed at
growing leadership skills at the community level.
Due to their non-profit oriented nature, these organizations are exempted from tax in many
aspects. Their organization depends on the size, achievements or discipline of a certain
association. Their management is voluntary (Maier, Meyer & Steinbereithner 2016, p. 64-86).
Due to this reason, the approach of their management may be less formal and even affected by
traditions.
The management of non-profit sports organizations is a complex process since it needs to be
dynamic so as to adapt to the changing trends in both the external and internal environment. This
is because the sector is highly affected by upcoming pressures, both internal and external, like
the issue of government intervention. Non-profit sports organizations have been legally

NON-PROFIT SPORTS SECTOR 3
permitted by various governments to raise revenue through means like fundraising and acquiring
money from donors so they can remain functional (Raz 2012, p. 283).
How the sector spends funds
Non-profit sports organizations divide their revenue into certain percentages according to their
plans. Some amount is shared among the stakeholders. Some are retained in the organization for
various purposes like branding the organization name through advertisements and making
products like shirts for sale to popularize itself. The rest is taken back to the community for
development, for example, they build sports academies where they train children for free so as to
build up their talents (Gillett and Tennent 2018, p.228-259).
Sources of revenue
There are several opportunities for acquiring revenue. One is that they charge some fee for their
services and also sell products. A good example is a public university that has several non-profit
sports clubs. During an event, they will sell tickets to those aiming to attend. The money paid is
an event fee. Likewise, they sell products like sports equipment.
This sector also gets revenue from charitable contributions. Individuals who are fans of a certain
non-profit club will support the team by giving donations. This is very well practiced in
developed countries like the United States (Kolyperas et al. 2016, p. 702-719). The corporate
philanthropy is another revenue source to this sector. Some corporations decide to support the
non-profits sports sector as an act of charity work. Others may decide to fund the sector with
certain business aims, like advertising their products. Example of corporations that fund sports is
banks and the Safaricom company.

NON-PROFIT SPORTS SECTOR 4
The sector also acquires revenue from the state or local governments. The government supports
many non-profit sports activities, especially those associated with public schools. Another source
of income is the Federated funds. These include the community funds, whereby communities
support non-profit sports activities within their reach. There are public charities that make grants
to support non-profit sports activities (Powell 2019, p. 195-214). These public funding may
receive funds from private foundations, the general public or even the government.
Another source of revenue for this sector are grants from foundations. Foundations are of three
types. These are corporate foundations, family foundations, and community foundations.
Fundraising is another method through which non-profit sports organizations earn revenue. They
do this through activities such as raffles.
Before anyone becomes a member of the organization, they have to pay the membership fee for
registration. This is another way of gaining revenue. Finally, non-profit sports organizations also
levy program fee to get revenue. This is the fee collected from events organized for non-
competitive purposes (Clausen et al. 2018, p. 373-392).
Challenges for revenue acquisition
There are several obstacles to revenue acquisition for this sector. For instance, in 2003, the
National Survey of non-profit and Voluntary Organizations in Canada found out that 161,000
organizations, that were non-profit and voluntary had problems in obtaining revenue. 48% of the
organizations had problems in getting funds from other organizations, especially the government.
20% had problems in acquiring funds from the public (Elson 2009, p. 36-74). The sports sector
was not an exception. One challenge is the ability to grow income. Raising money to increase
income is a challenge for this sector. Some sports clubs draw ideas of developing their income