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Part two: Money matters — Corps manage money creatively to keep their shows on the road

by Mike Ferlazzo, DCW staff
mferlazzo@yahoo.com

This article was originally published in the April 2007 edition of Drum Corps World (Volume 36, Number 1), mailed to subscribers on March 15. The first part appeared in the March issue and is in this Web site’s archives.

A drum corps’ creative team is typically thought to be the staff members who create the show. But with most touring corps now having annual budgets in the hundreds of thousands of   dollars, some of the best creativity is coming from the financial teams who manage the money to keep those shows on the road.

Corps management is constantly generating ideas on how best to raise revenue and minimize expenses in today’s high-priced touring environment.

“Our executive committee is having kind of a retreat next weekend [early January] where we’ll get together and brainstorm things like that,” said Carolina Crown Director Kevin Smith. “We do those kinds of strategic meetings, look toward the future and are constantly evaluating potential ways of making a buck or cutting expenses.

“Our board just had a retreat last weekend [early January] with a facilitator that enabled us to hone our mission, vision and short-term goals as an organization in the next year,” said Mark Richardson, executive director of The Academy, DCI’s newest division I corps. “While we do plan on getting to the point where we can tour full-time, our priority right now is to continue to develop new funding, focus on marketing our product and working our way over the next five years into a position where we are fund-raising for one year ahead, instead of raising money simultaneously as we spend in the current year.”

Spirit of Atlanta was a corps that was unable to keep up with expenses. One of DCI’s fastest success stories when it made finals and finished sixth in 1978, just two years after it was founded, Spirit eventually fell on hard times in the 1990s. They didn’t field a corps in 1994 and, while they made it back the following year, financial hardships continued and they were poised to fold following the 2000 season.

The university partnership is born

Spirit emerged through a new and still exclusive university partnership. Already famous for its corps-style marching band, the Marching Southerners — an organization which historically provided many members to the Spirit of Atlanta, Jacksonville [AL] State University — and its Director of Bands, Ken Bodiford, had initially formed a relationship with the corps in the      mid-1990s to exchange the JSU practice facilities for the band’s use of Spirit’s front ensemble equipment.

With the corps on the brink of extinction after the 2000 season, Bodiford and Spirit founding director Freddy Martin discussed taking that partnership to a new level.

“At the end of season, Freddy Martin and I talked about the corps and I asked him if I could make Spirit one of my marching ensembles at Jax State,” said Bodiford. “I asked him if we could sell it that way. He said, ‘If we could, you’d have to be the director’.”

Bodiford agreed to become a dual director and drew up a proposal for the JSU administration to make Spirit the school’s summer marching ensemble. The proposal emphasized how the school would benefit from the additional publicity of having a successful touring drum corps, how it would bring potential JSU students and their families to campus to participate in the drum corps, and how it would provide greater access to potential endorsements for new equipment.

In return, Bodiford asked the school to provide the corps access to campus facilities, shared equipment, a minimal touring budget and college credit for the students who marched in Spirit. The proposal was approved nearly three months later.

“One of the things that went along with the decision was that we would change the name from Spirit of Atlanta to Spirit of JSU,” said Bodiford. “Also, we got a scholarship budget. So for the kids who do make the corps, we can give them a scholarship for the college credit. They still have to pay membership dues, although we take care of the class credit cost, which is about $300. They [the JSU administration] also gave us about $30,000 in a travel budget.

“We actually get very little true cash from the school,” he said. “Where they do help is with in-kind gifts like use of facilities and equipment. For instance, in the early years [2001] Spirit didn’t have horns, so they used the Marching Southerners’ horns. That’s what kind of got the corps off the ground and what really helps in terms of the in-kind gifts.”

Those in-kind gifts keep down additional costs, like facility use and housing, for the corps’ $600,000 annual budget. But the university’s backing provided an even bigger asset in terms of financial stability with Spirit’s creditors.

“The worst thing that we inherited was the rap for the bad credit, more so than owing people money,” he said. “A lot of companies did not realize that Spirit of JSU and Spirit of Atlanta were two separate entities. And, even today, that’s hard for people to understand because we still use the baby blue color and everything’s really based on the early Spirit of Atlanta.

Whenever Spirit folded for the last time, the Spirit of Atlanta franchise no longer exists. That franchise is really gone, with the new one being Spirit of Jacksonville State University.

“In order to start doing business with a lot of companies, we had to pay off old debts of Spirit of Atlanta — thousands and thousands of dollars of debt that we had to spread over several years. We’re just now getting to the point where some of the debt created by Spirit of Atlanta is getting cleared off six or seven years later.”

The Spirit of JSU team has gradually convinced creditors that they’re good for the money and the administration, that the summer marching ensemble is worth the investment. But to do that, they have to live by some stricter “university rules.”

“Ultimately, I know I’m responsible not just for the welfare of the corps, but that everything the corps does is a direct reflection on JSU,” Bodiford said. “Whenever a university agrees to have the corps under the umbrella of the university band department, there are so many things that your staff has to understand.

“I’ve got staff from all over the country and, when they come here to teach with Spirit, they have to teach by the same guidelines that I’m under as a faculty member here at JSU. They cannot use whatever language they choose to use to talk to the kids. They cannot smoke in front of the kids because we have a no-smoking policy. So it’s little things like that, and we’ve lost some staff members because they weren’t quite ready to make those types of commitments to education that you have to make.”

Because of the way Spirit and its staff have to operate, Bodiford isn’t sure the full university partnership would be the right option for every corps, particularly long-established units that are used to doing things independently. It’s worked for the survival and continuing success of Spirit.

Other corps seemingly are following their lead. The Academy organization recently announced that it will team up with the Herberger College of Fine Arts at Arizona State University to give Arizona students two opportunities to learn from guest clinicians and instructors of the corps at the music facilities of ASU.

The enterprising private sector

For now, the rest of the drum corps world has to raise and manage money the old-fashioned way — generating some enterprising business ideas in the process.

One look at Carolina Crown’s Web site reflects just how entrepreneurial it has become.

There’s CrownEvents — links to tickets and information on the organization’s three drum corps shows, “NightBEAT,” “FirstBEAT” and “CrownBEAT”; its band championship, “BandBEAT”; and its golf tournament, “CrownGOLF”; CrownTickets, an on-line ticketing service for its own three shows, plus about 15 to 20 drum corps shows, band championships and several other events per year; and its on-line marching supply business, TheCrownStore.com.

Smith reports that CrownTickets began when the organization decided it didn’t want to pay for having tickets printed up for its “NightBEAT” show. The venture is the corps’ largest grossing subsidiary, but only nets revenue to cover about 3 to 5 percent of the corps’ operating expenses.

The marching shows and golf tournament have steadily expanded and now pay about 20 to 25 percent of the corps’ operating expenses. TheCrownStore.com started 10 years ago as a way to get wholesale pricing on items used by the corps, according   to Smith. It now has worldwide sales that contribute another 3 to 5 percent to the corps’ operating budget.

Those business ventures accompany more standard drum corps fund-raisers, like Crown merchandise and the corps’ annual fund. But even those have been tweaked to yield better returns.

“We have expanded our merchandising business beyond summer souvenir sales at drum corps shows so that we now do merchandise sales at band shows and other events such that the net is 5 to 7 percent of our operating budget,” said Smith. “We also own the building where our offices are located on Main Street in Ft. Mill, SC, and lease a storefront to pay for it — keeping us from paying rent.”

Just like its on-field creative team, new ideas are coming daily from the money management team.

“It happens on pretty much an everyday basis. We certainly have a few guys on there who are constantly thinking about what new venture to get into,” said Smith. “Jim Coates, our chief operating officer, who now is also our program coordinator, is our lead full-time guy in the office. One of his main goals is to come up with new ways to raise money, basically, or new ways to cut expenses. That’s one of his goals as the operating officer.

“And then we have some board people and volunteers always looking for things like CrownTickets to develop.”

Such is the enterprising world of drum corps today.

The true non-profit approach

Pacific Crest and The Academy not only resisted the temptation to initially go to the DCI World Championships, and then become full touring division I corps, they also practice more true non-profit approaches to managing their resources. In fact, Pacific Crest Director Stuart Pompel sees it as his legal responsibility.

“When you’re dealing with a non-profit corporation, all of your funds — even if they’re tuition — are public funds and you are under legal, not to mention ethical, obligation to the IRS and to the public to manage those funds with as high a level of fiduciary responsibility as you can,” he said. “So you can’t throw stuff   on a credit card just because you want it when you’re running a business — at least with a non-profit.”

Pompel has seen too many drum corps turn to credit to pay for short-term needs, only to   produce disastrous consequences later. But that’s nothing new to non-profits.

“Non-profits running out of money is not a particular disease to drum corps,” he said. “There are non-profits that run out of money all over the country and the world because they’re not created by people who run a business. They’re created by people who want to do something amazing — whether it be for the homeless, or health, or human services, or music education.”

Pompel reports that PC pays for its $350,000 annual budget through student tuition, which pays between 60 and 70 percent annually, its tour [annual] fund, hosting its annual drum corps contest and golf tournament, merchandise sales and performance fees. They keep it simple for a reason.

“It’s more of a traditional non-profit approach,” said Pompel. “So, instead of looking at this as a drum corps, we look at it as a non-profit organization — and non-profits have customers or clients, which in this case is our students and their parents.

“They have staff and volunteers, donors and a board of directors, and the board’s job is to raise money and to give expertise, to get their friends to give and get their friends to provide expertise.”

That’s not to say that PC is “politically correct” when it comes to its fund-raising future.

“The goal for us, at some point, is to find that thing that can bring in another $200,000 or $300,000 so we can have a full-time staff, so they can hire me full-time and they can have someone in the office to provide an even greater experience for the kids,” Pompel said.

The Academy chose to model Pacific Crest’s approach and its list of fund-raising initiatives closely resemble PC’s. According to Richardson, the corps’ fund-raising goals will be met with the following events and activities:

• Grants from state and local organizations
• Two “Southwest Corps Connection” DCI shows hosted in 2007
• Birdies for Charity, a pledge drive provided through the PGA event “The FBR Open”
• Merchandise sales
• Direct mail campaign
• Memorial Day benefit concert
• Annual benefit dinner

And, just like PC, The Academy is also cautiously looking to grow its financial base.

“Our corps budget is at $336,000,” said Richardson. “Only about $200,000 is covered by the membership. The remaining amount is raised by our events and donations. This is a high percentage of the budget covered by the membership compared to other top division I corps. Our goal is to continue to find new ways to raise funds in order to give our corps the opportunity to tour more.

“At our board retreat several weeks ago, where we honed our mission and financial goals for organization, we emphasized that it’s again about taking a responsible approach to funding this thing,” he said.

Advice to live by for fledgling corps

When it comes to navigating the sometimes daunting financial path of a touring drum corps, knowledge is a powerful tool. And experts who have been there, and might have done that, can lend some sound advice.

“I guess the biggest financing tips we pretty much had from the beginning was to grow slowly and don’t personally sign for anything,” said Smith. “I know that’s more easily said than done, but there are plenty of examples of people getting into trouble in our activity who didn’t follow one or both of those rules.”

“Probably my biggest piece of advice [for a corps pondering entering a university partnership] is to keep good records,” said Bodiford. “Really keep records showing the kids who are being recruited to the university because of the drum corps. If you show that on a yearly basis, that will only help make it easier to maintain the relationship. And numbers speak, they really do.”

“You don’t have to buy everything brand-new,” said Pompel. “You can maybe rent your equipment from an area school or develop a relationship with that school to exchange something.

“I’d also caution against people and organizations doing too much at one time,” he said. “It’s OK to grow incrementally. You shouldn’t go to championships in the first two to three years. If you’re starting a new corps and that first dollar comes from tuition or a candy sale, I think you have an obligation not to go.”

“Start small, stay small and grow slow,” said Richardson. “Stay focused on your mission, not on the dream of being a world champion. Surround yourself with successful people, not just passionate people.”

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Drum Corps World is published as an on-line electronic magazine by Sights & Sounds, Inc., Madison, WI. It is supported by advertising from manufacturers, service providers, corps, circuits and show sponsors. The publication began in October 1971 at the same time Drum Corps International was formed and has been produced continuously as a tabloid newspaper until April 2011 and on the Internet since May 2011. It is released monthly, as well as six additional e-mail blasts, one in late June, three during July and two in August.

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