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Industry nonprofits roll through economy

Published February 6, 2012

By Doug McClellan

Editor's note: BRAIN's complete package on nonprofits, including an executive salary breakdown, is in the February issue.

Adventure Cycling’s 2012 bicycle tours are filling up faster than ever before in the organization’s history. USA Cycling expects a 10th consecutive year of membership growth. The League of American Bicyclists is discovering that its well-heeled enthusiast members are increasingly responsive to its fundraising approaches.

The good times continue to roll for nonprofit organizations across the spectrum of the industry—from major national groups like Bikes Belong and USA Cycling to the many smaller and regional advocacy organizations.

“Over a three- to four-year period from 2008 to 2011, while the economy is crashing all around us, we actually seem to have done relatively well,” said Andy Clarke, president of the League. “Given the circumstances, I’d say very well.”
The bicycle industry stands in contrast with most U.S. nonprofit organizations, whose results tend to follow the national economy.

Most industry nonprofits reported growth in revenue and giving for 2010, with many posting increases of more than 10 percent. Yet the Foundation Center estimated that overall giving by U.S. nonprofits declined slightly in 2010 and was flat in 2011. A survey of nonprofits by the Nonprofit Research Collaborative said that nearly 60 percent reported flat or declining support in 2011, and less than half planned to increase their budgets this year.

Bicycle Retailer examined the latest financial reports of more than 40 industry nonprofits and trade associations. Although nonprofits don’t pay income taxes, the Internal Revenue Service requires them to file detailed annual reports outlining revenues, expenses and compensation details for top officials. The reports are public.

The most recent available reports are for 2010, but officials at several organizations shared their preliminary results for 2011, and their expectations for this year.

Accounting for accounting
The reports provide a snapshot of how nonprofits fare from year to year. But these snapshots can sometimes be out of focus.

For example, the International Mountain Bicycling Association looked like a big winner in 2010, with revenue surging more than 70 percent from 2009 to $5 million. The League of American Bicyclists, in contrast, saw a slight decline in revenue.

But the directors of both groups said those numbers were misleading. IMBA’s revenue appears overstated because the organization received big multi-year commitments in 2010 that it was required to book in that year, said Mike Van Abel, IMBA’s executive director. The commitments arose from the Public Lands Initiative, a fundraising challenge sparked by Trek’s John Burke, Specialized’s Mike Sinyard and Bikes Belong’s Tim Blumenthal in 2010.

Even when its revenue is adjusted, IMBA has seen gratifying growth, he added, thanks to strong support from suppliers and a boost in membership revenue. He said IMBA expects to spend about $4.7 million in 2012, an increase of $1 million over its 2010 budget.

“I could not be more pleased and frankly grateful for the bike industry and its leaders, who see investment in advocacy as bringing a return on that investment for them. And it is,” Van Abel said.

The League of American Cyclists received a big contribution from SRAM in the waning days of 2009 for a membership database project it launched in 2010, making 2009 revenue look better and 2010’s worse than they actually were, Clarke said.

Meanwhile, the League’s 2011 revenue was about $2.35 million, an increase of 10 percent over 2010, Clarke said. And while “we are not getting too excited or overoptimistic,” he said the League is budgeting for modest growth in 2012.

Taste for adventure
Enthusiast organizations reported steady growth, whether they cater to hard-core racers or those who prefer the more laid-back pleasures of bicycle touring.
USA Cycling, the national governing body for competitive cycling, retained its position as the industry’s biggest nonprofit. It posted revenue of $11.1 million in 2010, up by $1 million, or 10 percent, from the prior year, helped by increased fees from licenses, permit fees and event surcharges.

CEO Steve Johnson said growth continued in 2011, albeit at a slower pace, and he expects the budget to grow by an additional 4 to 5 percent this year.
“The industry may have felt the impact [of the economy] in terms of unit sales, but in terms of racing activity, we didn’t,” Johnson said.

Membership reached 69,771 in 2010, a 5.9 percent increase over 2009, although Johnson said the rate of growth slipped to less than 2 percent between 2010 and 2011.

Adventure Cycling, which promotes bicycle touring, saw revenue grow by 14 percent in 2010 and 24 percent in 2011.

“We’re seeing growth in all areas, whether it’s our map sales or donations or memberships,” said Jim Sayer, executive director. “Advertising in our magazine has rebounded—that went way down in 2008—and our tour sign-ups for 2012 are going at the fastest pace we’ve ever seen.”

“Our growth has been steadily up, especially over the last seven to eight years,” he added. “When we were in the last boom we were going up. Even now we’re continuing to go up.”

Adventure Cycling is remodeling its Missoula, Montana, headquarters to create enough space to handle a 50 percent increase in staff over the next few years, Sayer said. It now has a staff of 32.

Advocacy accelerates
Bikes Belong, the industry’s primary advocacy organization, saw a slight boost in 2010 revenue of 2 percent to $2.4 million, while its sister organization, the Bikes Belong Foundation, more than doubled its revenue to $2.28 million.

President Tim Blumenthal said revenues for both accelerated in 2011 and are expected to grow again this year, reaching a combined total of just over $6 million, not including transfers between the coalition and the foundation.

The foundation has been particularly successful in attracting new or renewed grants from such non-endemic organizations such as the Robert Wood Johnson Foundation, Kaiser Permanente and Humana.

They will need every penny, because Bikes Belong is fighting to retain federal funding for cycling infrastructure as Congress grapples with reducing the deficit.

“I’m super-excited about everything and feeling like it’s going to be a great year, but the uncertainty and the ever-changing nature of the federal debate keeps us on our toes and is a challenge,” Blumenthal said.

In late January, Bikes Belong hired its first full-time, in-house lobbyist: Ivette Rivera, former head of government relations for the National Automobile Dealers Association.

“She has tremendous connections on both sides of the aisle in Congress and a firm understanding of transportation issues,” Blumenthal said.

Fine-tuning fundraising
Several organizations are working to diversify their revenues.

The Cascade Bicycle Club of Seattle, Washington, the nation’s biggest regional cycling club, created a development department last year to focus on individual donations, grants and government contracts.

“Because we were pretty well funded by our events, and expanding slowly in terms of our programmatic areas, we weren’t really hustling to go after grants,” said Chuck Ayers, Cascade’s executive director. “We are now doing that.”

The League of American Bicyclists is also increasing its focus on soliciting contributions from individual members, Clarke said.

“Within our ranks we know there are people of considerable means who are very, very passionate about cycling. I think we’re doing a better job of connecting with them and identifying those who are capable of significant contributions and lifting their support for the organization,” he said.

USA Cycling has retained a sales group to seek new corporate sponsors, which Johnson said had not been a priority. In January, the organization announced a new sponsorship deal with breakfast cereal brand Post Grape-Nuts.

“You will see a lot of noise from us over the next several months regarding new partnerships,” Johnson said.

Topics associated with this article: Advocacy/Non-profits

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