I don’t really see what the fuss it to be honest. They still have to attract the money after all.
Some of the Sydney Shute Shield Clubs have been very successfully in raising a pot of money via a Foundation – whether it was through the sale of licenced club (Randwick, Norths), wealthy and passionate ex-players and wider business network ( Sydney Uni, Manly) or other clubs trying to sock away whatever they can.
I’m a massive believer in a foundation, as if-and-when the handouts from the ARU dry up, which is happening presently until the next multi-billion dollar TV deal comes along, an annual income stream for the rest of life’s existence can ‘underwrite’ key expenses of the club. If managed correctly, it can be a very valuable asset to a club and much more than a pokie palace as Wests Tigers in the NRL are finding out.
The main negative with a Foundation is that you need to raise a truckload of cash to generate meaningful returns. The investment objective of all Foundations should be the preservation of capital, and with cash and Term Deposit rates around the 3-4 mark, even a nice chunk of cash such as $1 million, will only generate an income stream of $35k unless you go up the risk curve which then threatens the capital.
The Rebs will need to generate a foundation of $5 -$10 over the years if they want a meaningful contribution to their operations.
I’ll donate a little bit and its a nice token reminder that the tax man gives me half of it back at the end of the year.
