When and How to Start Thinking About Money
By Sigmund Werndorf
We all get into swords for the fun and passion of it, but there comes a point when every club begins thinking about money. However, it’s possible to start worrying about finances too soon. Why does a club need money (and thus, the financial management that comes with it)? How do you know when it’s time to start thinking about it? How do you get it, and what happens once you do?
Why Your Club Might Need Money
What does your club need money for? Every club’s needs are different, but here are a few key expenses most encounter:
Insurance
The most straightforward use of funds is to pay for insurance. This is an important topic, so for more information, check out our article on insurance.
Training Space
If a free outdoor venue isn’t an option, you might need money for a training space [link to finding a training venue article]. Likewise, if you live in a place where the weather (either heat or cold) severely limits when and how much you can train, you may want to invest in an indoor venue with climate control. Whether it’s plain old rent, fees associated with booking a room or venue, or actually buying a location, having a nice place to train is an amenity many people want.
Gear
Clubs often find it beneficial to own gear they can loan out to beginners or visiting participants. Swords and protective gear (most often masks, but sometimes jackets and gloves) cost money, and so does keeping them clean and maintained. For more on this topic, check out Club Gear: Where to Start.
Scholarships, Resources, and Events
Beyond that, some clubs with sufficient finances will fund scholarships to send their members to tournaments, build up club libraries of fencing related materials, or even fund running their own events. If your club goals include any of these, it might be time to think about how you’ll finance them.
When to Start Thinking About Money
Insurance, training space, and gear are all worthy reasons to start thinking about club finances, but how do you know when your club is ready for these things? In part, this question is connected to the question of what kind of club you want to be [link to article]. If you want a small study group with a couple of peers then finances are probably not something you will need to worry about soon. But if you want to create a large hub for the HEMA community that is open to anyone interested in trying it out, you may want to think about it sooner.
When Your Club Starts to Grow
Generally, thinking about finances starts at a certain threshold of growth: when you are getting too many club members to loan out personal gear or share what’s available, it’s wise to start thinking about funding loaner gear. Likewise, when you start having too many people for whatever venue you’re in and need to upgrade, you will most likely want to start looking into training venues that can accommodate everyone.
It’s important to note though that it is always smart to pause at moments like this and double check with yourself and your leadership team that your club wants to grow. Sometimes momentum can sweep us up and we assume that the club has to take on the new people and do everything required to accommodate them. But that growth comes with responsibilities and consequences, and it’s fair to decide you don’t want them. Make sure you think about [what kind of club you want to be] before starting to expand.
When You Need to Protect Yourself
The big exception to this is insurance. Any time you practice without insurance, you are taking a risk, and those risks might require you start thinking about finances earlier than you otherwise might. However, there are options (such as through the HEMA Alliance) that can help take care of that issue for you quickly and affordably, allowing you more time and space to consider what you want your club to be and how you want it to work.
How to Make the Money You Need
If you’ve decided it’s time to start thinking about money, the next big question is how to make the money you need? There are lots of options, though some like crowdfunding and using personal finances come with important caveats.
Membership Fees
The most traditional way to raise money is from your club membership. There are different ways to approach this (for more, see Fee Structures), but it boils down to charging your club members some kind of fee for ongoing participation in the club. This is the most common and easy to understand approach.
The key is to balance what you are charging your members and what you are giving them in return. Keep in mind that the moment you start charging fees, however, you are closing off access to your club to those who cannot afford the cost unless you create specific measures for those people. The higher the fees, the more people you are excluding from participation.
Fundraisers and Events
Another approach to raising money is to hold fundraisers and events. This can look like anything from the humble bake sale to a local sparring BBQ with a small admission fee. These are good, grassroots methods for raising funds, but they come with some drawbacks. For one, they aren’t consistent or reliable. You can get a one time payout, but unless you can run these events regularly and count on people showing up to them, it's better to use this fundraising method for one time expenses like gear purchases or sending club members to an event. You don’t want to be trying to sell cookies to make rent.
Also, make sure you are cognizant of where the money is coming from. Your friends and families may be happy to support you, but don’t be surprised if they don’t want to pay $20 for a brownie. There is a limit on what you can and should ask from people. As a note, in theory you can run larger events like tournaments, but most tournament organizers will tell you it’s extremely hard to make money on a well run event, so it is wiser to stick to smaller ideas with an explicit fundraising theme.
Crowdfunding
There are two common fundraising methods that should be approached with care. The first of these is crowdfunding. Some people try to launch crowdfunding campaigns to get their clubs off the ground or cover large one time costs like gear purchases. This can be a viable method if you have the community to tap for it, but we advise caution.
Keep in mind that crowdfunding campaigns are essentially asking for charity and that there are many people and clubs out there who could also benefit from the money you are asking for. Crowdfunding efforts are best kept within your own direct communities and members. It is bad form to blast these efforts into open venues like nationwide social media groups, and unwise to rely on beneficent strangers.
Using Your Personal Finances
Another approach to be cautious about is to fund these things with your own personal money. Only you can know your own finances, but if you are going to spend your own money you should be clear eyed about the sustainability of this option. One time purchases for things like gear or deposits on a venue can be safely taken on, but bearing the responsibility for ongoing costs like rent can be stressful, especially if other people do not show up in the ways you expect or want. Make sure you understand the dynamics of the organization and what you are committing to before putting your own money on the line.
Other Funding Options
Lastly, there are creative options to generate income for your club if you’re willing to do the work. Your area may have grants or scholarships for sports or community organizations that you can apply to if you qualify. Many clubs also sell merchandise in the form of shirts, patches, stickers, or hats. Just be sure when considering a new revenue stream to ask yourself whether it is realistic, ethical, and sustainable.
The Responsibilities That Come with Club Income
Once your club does start having an income, what responsibilities come with it? Having money requires detailed record keeping and careful consideration of its impact on your club culture.
Record Keeping
First and foremost, you need to start keeping records. Track how much money comes in, from what sources, and how much money goes out, and where to. This will be easier if you set up a dedicated bank account for the club but even if you don’t, you’ll still benefit from keeping close tabs on all the money that passes through the club. Why? Primarily, taxes [link to taxes article].
While there are certain thresholds for when a club will need to pay taxes, the responsibility for record keeping starts as soon as any cash changes hands at all. The sooner you get into the habit of keeping your records accurate and up to date, the better off you’ll be when it comes time to figure out the paperwork. This goes double for clubs that are large or aspire to growth. It’s one thing to note down the cash flow around a few friends. It’s another thing when you have thirty or forty club members with monthly dues, merchandise purchases, and more.
On top of taxes, a clear understanding of where your money is and where it is going helps prevent mistakes like overestimating whether you have this month’s rent ready, losing track of funds, or failing to notice if you’ve been the victim of fraud. Unwatched money tends to have a habit of disappearing.
Community vs. Customers
Finally, a less tangible or obvious risk of involving money in your club is the danger of your membership developing a consumer mindset. The more money is emphasized in a club, the more vulnerable members are to thinking of themselves as customers buying a service rather than members of a community.
The best HEMA clubs are communities, held up by people who care for each other. The support of these relationships is the foundation of a good club. This does not have to be undermined by money but it certainly can be. Carefully consider the kind of club culture you are cultivating as you start to deal with money. [link to club culture article]
Making Money Work for Your Club
Clubs do not inherently need to generate income. However, club goals around growth, service to their membership base, and quality of training experience often end up requiring funding. There are various ways to go about getting that funding but the most common and reliable is charging dues from your membership.
Regardless of how you go about it and for what purposes, money always comes with administrative responsibilities including keeping records for tax purposes and making sure you are handling your finances responsibly. Be conscientious about how the introduction of money to your club affects its culture and your membership’s expectations from the organization.