Bikes, Blues & BBQ has long claimed to be a different kind of rally, one friendly to families and with charitable goals at its heart.
Those ideas have rumbled rather quietly in two of the past three years since the organization hasn’t given any money to charities. The rally organization has made less money than it has spent in two of the last five years, business records show.
A closer look at the books shows the rally never gave up on benefiting local causes despite these financial ups and downs. Bikes, Blues & BBQ gives contracts with charitable groups whose members volunteer for cleanup work and other needed functions every year, records show. Such contracts amounted to $71,000 in rally expenses last year alone.
Rally organizers also donate booth space at the event for nonprofit organizations, helping those groups raise money and awareness for their causes.
Wednesday kicks off the 2012 rally. The event will bring an estimated 350,000 or more motorcycle enthusiasts to the area from all across the country. They drop money at hotels, restaurants and bars as far away as Eureka Springs and Fort Smith.
At A Glance
Largest Charity Rally
Bikes Blues & BBQ is an open rally, so its exact size isn’t known. Organizers call it “the fastest growing and largest motorcycle rally in the country benefiting local charities,” having grown from an estimated 200,000 participants in 2004, 300,000 in 2005, between 300,000 and 400,000 participants from all 50 states and several other countries in 2006, 2007 and 400,000 in 2008, 2009, and 2010.
Source: Bikes, Blues & BBQ
A Chance Of Scattered Results
The rally itself collects money in three primary ways: vendor fees, sponsorships and beer sales.
According to the Bikes, Blues & BBQ’s IRS 990 form, the organization collected more than $779,000 in gross receipts last year. Joe Giles, the event’s executive director as well as a motorcycle enthusiast and local musician, said a portion of the earnings also comes from camping fees and merchandising opportunities. Those are relatively minor revenue sources, providing between $25,000 and $50,000 each. A motorcycle raffle also contributes several thousand dollars per year.
The potential profit depends heavily on fair weather. A rainy Saturday night costs the organization $50,000 to $60,000 in beer sales, Giles said.
The event’s 990 forms, which must be filed every year, show such fluctuation. Gross receipts for admissions and merchandise peaked at more than $180,000 in 2005 and bottomed out in 2008, when the organization reported more than $80,000 in losses. Results are scattered in other years. The rally showed a surplus each year for the last three years, netting $15,418 in 2011.
Nonprofit By Choice
Events on the scale of Bikes, Blues & BBQ tend to be inefficient money-raisers, said Sandra Miniutti, vice president of marketing and chief financial officer for Charity Navigator. Miniutti’s company is an online database that tracks charitable giving. In general, large-scale, event-based charities “cost a lot of money, whether there are good intentions behind them or not … They tend to be woefully inefficient,” Miniutti said. She equates the rally to a charity ball, the kind with cocktails, fancily dressed patrons, ample wine and big-name entertainment.
“Those $300 tickets for the dinner dance? A very small amount actually benefits the bottom line,” she said.
The Bikes, Blues & BBQ rally listed its 2011 direct expenses as just more than $789,000.
Northwest Arkansas’ bike rally is unique in its status as a nonprofit, Miniutti said. She knows of only vaguely similar charities.
The size of Bikes, Blues & BBQ puts the event in the upper tier of motorcycle rallies, just below those considered the big three: Sturgis in South Dakota; Daytona Beach Bike Week in Daytona Beach, Fla.; and the Laconia Motorcycle Week in Laconia, N.H.
Charlie St. Clair, rally director in Laconia and a 20-year employee of the organization, said bike rallies can be a tough business proposition.
“We’re nonprofit, but not necessarily by choice,” he said.
The rally in New Hampshire, which takes place in late June and will celebrate its 90th anniversary next year, is similarly weather dependent. Laconia is within a day’s ride of New York City, and riders may opt to make a trip to Laconia on a particularly sunny day but not on a rainy one.
Corporate donations make up a bulk of the Laconia rally’s intake, as the city government issues the vendor permits instead of the rally itself. When rally attendance slips — for weather, economic woes or some other reason — the rally does, too. St. Clair estimates the rally would need about $200,000 to get out of the debt it carries over from year to year.
Part of the problem is competition, St. Clair said. There were about 50 motorcycle events in the country when he started working for the rally full time in 1992. With more than 500 such rallies and rides now, competition for the same pool of money is tighter than it’s ever been.
Bikes, Blues & BBQ made an effort to go after corporate donations in 2011 when it announced it was hiring Ben Handford as president and chief executive officer and would include fundraising as part of his duties. When he left the company later that year, Giles retained the title executive director, but took on additional parts of the job. The organization maintains one other full-time employee, Coleson Burns, assistant event director, and a part-time office assistant.
Indirect Benefits
In addition to the contract work, organizers for the rally handed out checks to charities during many of the rally’s years. Such payments were skipped in 2008 and 2011, however.
In 2010, $80,000 — or about 20 cents per rally attendee — was distributed to charitable organizations. The largest grants went to Meals on Wheels, the rally’s original beneficiary, and the Donald W. Reynolds Boys & Girls Club in Fayetteville.
“It’s been a great partnership for us,” said Eric Schuldt, chief professional officer for the Boys & Girls Club. “It’s supported a variety of things through the years, from programs and operating expenses to helping pay off a loan on our new building.”
The club budgets each year expecting a certain amount in overall donations, and Bikes, Blues & BBQ is part of that equation.
“We don’t put a specific dollar figure on what we expect in terms of support from the rally,” Schuldt said. “It helps out overall donations in good years, and we look to other places to make it up in the down years.”
Bikes, Blues & BBQ contracts cleanup duties to several organizations such as the Fayetteville High School Band Boosters and the Fayetteville Sequoyah Kiwanis Club. In 2011, Bikes, Blues & BBQ paid $71,000 for such contract services. Giles estimates about $45,000 to $50,000 each previous year has been paid in exchange for work by local organizations.
Kiwanis members pull full trash bags from receptacles in the Dickson Street and Baum Stadium areas and replace them with new bags. For their efforts, the group gets $5,000. That’s a little less than half of the club’s $12,000 annual donation budget, which the group focuses on children’s charities. Without the money from rally, the Kiwanis club could not donate as much money, said Danny Spears, club president.
“Any money we take in, we give away,” he said.
While the Kiwanis handle daytime trash removal, nighttime and Sunday cleanup at the two main venues falls to the band boosters. Boy Scout Troop 122, 4-H clubs and the Farmington High School softball team also deal with post-rally cleanup.
“There’s also one other group,” Giles said. “We do get an infusion of involuntary labor from a group down on Clydesdale Drive,” the Washington County Jail.
Bikes, Blues & BBQ also has donated vendor space to nonprofits groups, allowing them to hand out pamphlets or sell items such as bottled water to raise money for their projects. The organization charges for-profit groups $700 for the same booth space, Giles said.
A poker run put on the by Fayetteville firefighters in conjunction with the rally also provides support to several groups. The association gives 30 percent of poker run proceeds to the rally. The other 70 percent is split between the firefighters’ scholarship fund and Camp Sunshine, a recovery program for young burn victims.
“We’ve never lost money on the poker run, although it’s been close sometimes,” said Jeremy Ashley, president of the association. “The prizes are donated to us, and the cost isn’t all that high, but a lot depends on the weather.”
Infrastructure improvements also arrived courtesy of the rally. A massive electrical system upgrade in the Tyson Track Center area cost more than $30,000, according to an Arkansas Democrat-Gazette story published in 2008. The system remains and is available for other groups to use.
Then there is the impact that has nothing to do with charity. A 2006 study by the Center for Business and Economic Research at the University of Arkansas estimates each out-of-town attendee spent $273 in the area during the rally. If about 65 percent of attendees are from out of town, as the study indicates, the event contributes in excess of $52 million to the local economy. Kathy Deck, director of the research center, said that while the study is 6 years old, she does not expect the per-person contribution has changed much.
Full Speed Ahead
Giles reports costs have already been cut heading into this week’s rally. The organization will save about $40,000 in annual expenses previously dedicated to Handford’s salary. Bikes, Blues & BBQ is expanding the number of vendors, too. Rally officials considered moving some of those vendors down Block Avenue toward the Fayetteville square, but the street’s merchants’ association voted against having the festival there. Instead, the group will have additional vendors in the Baum Stadium area, at the Washington County Fairgrounds and at the Tyson Plaza in front of the Walton Arts Center.
The rally continues to grow. An arenacross motorcycle race was added in Springdale last year. This year will have the debut of an official car show. That event will take place at the Northwest Arkansas Mall.
Giles expects Bikes, Blues & BBQ will donate to charities as a result of this year’s rally, even though the rally needs to make a profit of about $25,000 just to end the year without an organization-wide deficit.
“We never set a (donation) goal, but we would like to return to the amounts of 2009 and beyond,” he said.
And return thousands of riders to Fayetteville year after year.
Dan Craft contributed to this report.