Iceberg

Most clubs across Australia will have, in one form or another, a membership category or subsidy in place to cater to Senior Members. Designed to reward long-term loyalty (and reduce the financial strain on older members), this can take the form of a greatly discounted rate for members over a certain age, who have been at the club for a long period of time.

On the surface, it sounds like a great idea. However, like an iceberg floating in the sea, these subsidies can often hide a dangerous behemoth lurking underneath. And if a club doesn’t address the underlying danger—whether choosing to ignore it, remain indifferent or simply deny the danger—then the club may be doomed to face even rougher seas (or deeper water) in the long term.

There is no doubt that clubs need to examine the long-term impact these subsidies can have on their financial health.  Of course, the major obstacle here is the obvious outcry that will doubtless result from the many Senior Members, right?

Perhaps not.

In fact, as is the case with one Melbourne club, senior members may actually be in FAVOUR of dumping their very own subsidy!

Like many clubs across Australia, Melbourne’s Huntingdale Golf Club had a senior membership category that provided a 50% discount in subscriptions to members over 70 years of age and who had more than 30 years of membership.

A few years ago, the club undertook a study to ascertain the impact of aging membership on the finances of the club. This study predicted that within a few years the club would have over 20% of its total membership in this category and the value of the discount or subsidy would be well in excess of $200,000 a year. It was further anticipated that the value of the subsidy would get progressively higher over time as the population continued to age.

In essence, Huntingdale’s Senior Membership category was becoming an increasingly large burden on the club; and the burden was only going to get heavier as time wore on.

But Huntingdale is not alone; if we all look at the current state of the industry, with many clubs experiencing financial problems due to declining membership, etc, it’s abundantly clear that many clubs are in the same boat, and can no longer continue to support these subsidies.

So what is a club to do?

Huntingdale made the bold decision to tackle this issue head on. They engaged with the membership and demonstrated that the value of these subsidies was unsustainable for the long-term future of the club. The club asked the membership to consider the future impact of these discounts on cashflows and the ability of future generations to enjoy the amenity of the club that has been such an influential part of the life of the senior members (e.g. long-term friendships, physical health, etc).

To make the required modifications, the club needed to change the constitution, which required the senior members to undergo a class vote where the senior members themselves had to vote to remove these discounts.

In a strong sign of the good will and sense of community that exists at Huntingdale, the senior members voted overwhelmingly (over 75% of the vote) to remove the senior subsidies that currently exist.

A remarkable outcome!

Over the next few years, the value of the discount will reduce on an annual basis until all senior Members are back paying the same fee as the wider membership. Some have asked to go back to paying full fees immediately. In addition, the general membership have since voted to “grandfather” the senior membership category which effectively has removed the senior membership category altogether so that no current members will have the ability to enter the category moving forward.

Huntingdale’s members (and management) should be applauded for their forward-thinking. By focussing on the club’s long-term health, the membership will ensure that future generations are able to enjoy the same amenity that has been enjoyed by these senior members for many years to come.

We can only hope that more clubs out there will follow Huntingdale’s lead, and avoid a potential disaster of Titanic proportions.

 

One Response to "Seniors subdue the subsidy snafu"

  1. Andrew Presnell  March 1, 2017

    “Over the next few years, the value of the discount will reduce on an annual basis until all senior Members are back paying the same fee as the wider membership.”

    How many years Richard? It’s not a huge sacrifice to have to give up your discount in say 10 years time if there’s every chance you won’t be in a state to play a whole lot then.

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