When starting out, we highly recommend that you give yourself plenty of time to plan a safe event for participants, and be realistic about how many people will sign up for a first-year race. Educate yourself about the complexities of managing a running event and the associated risks. We highly recommend completing the RRCA Race Director Certification program. If you aren’t quiet ready to take that step, carefully review our Safe Events Guidelines.
With lots of planning, marketing, and the production of a safe, well-organized event, you can build on the success of your first year to grow your event into a top-notch race in the coming years.
Race Director Certification
Step One: Determine Your Business Organization
The first thing you need to do is determine how your event will be organized from a business perspective. There is not a one-size-fits-all approach to managing an event.
Chances are you will answer “yes” to one of the questions below and we can provide guidance on structuring your organization.
The designation of a race as a nonprofit has nothing to do with the contributions made to local charities by the race proceeds. The nonprofit designation of a race or a nonprofit club-managed event is determined by the corporate structure of the organization.
A volunteer board of directors, (no less than three unrelated people) that does not profit personally from the event and that oversees the operations of the event is what defines the event as a nonprofit organization, along with the official designation from the IRS as a 501(c)3 organization or through the RRCA’s group exemption with the IRS.
If an organization is a nonprofit, they are entitled to retain net profits, compensate staff, or hire contractors, as needed, to run their nonprofit business or event.
A race director may get paid for their services if a board of directors chooses this method of race management, so long as the race director or their immediate family is not a voting member of the board of directors, thus profiting from their relationship with the board. In recent years, event directors have gotten in trouble with the RRCA, their state’s attorney generals, or departments of justice for profiting from nonprofit service and engaging in self-dealing for personal gain.
A race may choose to depend on the generosity of volunteers to make their business model work. Nonprofit management structures differ from event to event and utilize a mix of paid staff, contractors, and volunteers.
All nonprofit events share a commonality, they have an independent, volunteer board of directors that does not profit personally from the event.
Read more about working with charities and hosting fundraising events.
Events without the official 501c3 designation are typically organized as for-profit LLCs or sole-proprietor entities. The gross receipts from the event may be subject to sales and income tax regardless if all or a portion of the proceeds are donated to a charity.
If you are a for-profit race director organized as an LLC or a sole proprietor, you should not include a contribution line for a local charity on your registration form with the contributions going directly to your for-profit race company and noting that the contributions are tax-deductible. If “contributions” are paid to the race company, these “contributions” are not tax deductible by the donor and may be taxable income for the race director.
Only a correctly organized nonprofit organization can accept tax-deductible contributions for charitable purposes.
For-profit race companies should have donors contribute directly to a local charity or commit to donating a portion of their net proceeds to charity, but be clear in your communications how registration fees will be expended and contributions given to charity partners.
Working with a fundraising or provide a direct link to your charity partners online giving page. This ensures contributions go directly to your partners.
Some race directing companies have created “foundations” as charitable organizations. Due to fraud and abuse in the event industry, we DO NOT recommend this approach unless you have consulted with an attorney and can ensure that your for-profit company is not self-dealing or committing fraud through a nonprofit foundation.
It is very important for these types of business structures to have a clear conflict of interest policy and operating procedures for the foundation. The foundation board of directors must ensure that the for-profit race directing company is not directly benefiting from the foundation in ways that are illegal or unethical. The owner of the for-profit event company should not sit on the board of directors of the foundation as a voting member to avoid the perception that the for-profit company is self-dealing or improperly sheltering taxable income.