In today’s economic climate, with high construction costs and rising interest rates, private clubs face significant challenges in creating capital project finance plans that are both equitable and widely supported. Adding to the overall challenge of member approval is the added difficulty of securing support for a capital investment from senior members. Some senior members feel that they have been loyal members for years and have therefore paid their fair share (which is often contradictory to the actual situation of the club). All seniors are concerned about having to leave the club in the near future due to relocation or health issues, limiting their enjoyment of the proposed improvements.
It is critical that when developing a plan to finance a capital improvement, we build into the plan a financial consideration for senior members. In some cases, senior members are clearly categorized as a member classification, usually through a combination of their age and their number of years at the club, with some level of reduced dues. The savvy clubs, along with reducing senior dues, will also add some golf restrictions and, as is important in the case of capital initiatives, take back the senior members’ vote. In these cases, the seniors must still be considered in the finance plan, but they cannot impact the outcome of the vote.
Nonetheless, when developing the finance plan, we recommend that the member’s investment, a term preferable to the negative “assessment,” is “discounted” to the senior member proportionate to the level of dues reduction. This is especially important in the case of lump sum payments. This same practice can be employed with a stepped approach for other older members who may not fall into an established senior category.
Another way to consider the seniors is to forgo altogether the lump sum payment and instead allow monthly payments, potentially at a greater amount than other members who may be asked to invest both through lump sum as well as monthly payments.
By thoughtfully integrating these considerations, clubs can successfully fund their capital initiatives while preserving their community and respecting the legacy of their long-standing members. A fair plan not only gets the project passed but also strengthens the club for the future.
Note: JBD JGA Design and Architecture and Buffalo Groupe are divisions of ClubWorks. Buffalo Groupe publishes The First Call.