Nearly every convention bureau or sports commission we work with has a dedicated grant program to help them secure events for their communities. While the rules of engagement vary widely from one destination to the next, there are some common best practices that we have seen deliver superior results from these incentive programs. Here is our list of best (and worst) practices in running grant programs.
- Conditions of Funding – Any grant program needs to have a specific list of attributes that the applicant must meet to even be considered for funding. At minimum, your list should include the following: (1) At least half the teams/participants will involve overnight stays in the host destination, (2) some minimum benchmark of the number of room nights the event must drive in the destination, (3) grant term is only for new events, (4) the grant will be for no more than three years, (5) the grantee must promote the grantor as a partner in the event including relevant marketing recognition for the funding agency, and (6) a post event report must be filed to receive all or some of the awarded funds.
- Evaluate – All events are NOT created equal. Implement some form of ranking system that takes into account the elements of an event that are important to your organization. That may be room nights, media/TV exposure, time of year (shoulder or off peak season is a plus), volunteer engagement opportunities, or any number of other criteria. Put those items on a list and award points to an event where they can check the various boxes. As a frame of reference, the best scorecard we have come across is from the Eau Claire (WI) Sports Commission. Thanks to Linda and the team there for allowing us to share their scorecard, which you can find at this link…..
- Accountability – The best grant programs we have seen do not give out all the funding on the front end. While grant funds can be distributed in a myriad of ways, the most common we see is where the granting entity awards 50% of the funds on the front end, and the remaining 50% after the event concludes and the rights holder has filed the appropriate follow-up paperwork. By holding back some of the funds, the grantor can hold the event rights holder accountable to follow through on the after action reports that are required by the CVB or sports commission. No report, no money.
- Business Development – Grant programs are best used for closing deals when new opportunities present themselves. This is true for both traditional bid-in events and also for newly created events. For created events, the grant should allow for a multi-year commitment, however, the allocation of funds should gradually decrease after the initial year. As an example, if your local soccer club applied for a $5,000 grant to get a newly created tournament started, and the event meets your scorecard criteria, the best practice would be this: award them $5,000 in year one, $2,500 in year two, $1,250 in year three, then nothing in subsequent years. After three years the event should be able to stand on its own and you should be able to allocate those funds to the next opportunity rather than continue to subsidize events for a long period of time (see worst practices below).
- Absence of a Process – In all situations where funds are being allocated to outside parties, you HAVE to have a process in place to make these allocation decisions. One client we have worked with actually has a claw back clause they can use to request a return of their initial investment if the event doesn’t meet its objectives. While that may seem a bit extreme, the need for financial responsibility and transparency has never been as important as it is today. Several leaders in the tourism industry have found themselves in hot water by not responsibly allocating the funds provided to them. A handful of CEOs have lost their jobs over this issue, so industry leaders need to take extra precautions when doling out grants or any other types of incentive funds.
- Subsidizing Events – The best grant funds are for closing NEW business deals. However, many communities award grant funds to the same events year over year. We don’t think that is a healthy business model. If an event can’t stand on its own after three years, maybe it shouldn’t be eating up your valuable resources that you could be using to launch new events that can generate a greater ROI in the future.
One very important note here. While we are largely talking about how CVBs and sports commissions can best implement their grant programs, it is just as important for event rights holders to understand how these programs work and what the expectations are when accepting these funds. Partnership is the key, and that starts with clearly laying out expectations from both sides at the very beginning.
Put a structure in place, measure each opportunity, follow the process, and hold your grantees accountable for the funds you invest in them. Putting these protocols in place will protect your organization’s investment and garner a more consistent return on investment over time.