Show You The Money

Most agencies accept a flat commission from their vendors because it’s the easiest to track and all financial risk is taken out of the hands of the government. If you are reviewing a short list of potential “comprehensive and exclusive” concessionaires, you will have more negotiating leverage and may want to consider other means of remuneration, if it means more revenue for your department.

To illustrate, I will use the example of a 500 square foot golf course pro shop. A review of retail leasing in your area determines that $15 is the average price per square foot being paid, or $7,500 annually.

If 100,000 people visit this course every year, and your receipts indicate that 1% of these visitors made an equipment purchase in the shop and their average purchase was $30, then you can project commission revenue on different levels:

5% $1,500

10% $3,000

20% $6,000

25% $7,500

30% $9,000

In this example, you can see that you would need a 25% commission on gross receipts to earn as much as you would from a no-risk lease. You would take the lease option unless you negotiated the commission higher than 25%.

Also, if your concessions package is large enough, you may be able to use a comprehensive relationship to help you build that new facility you’ve been wanting. For large deals, a concessionaire will sometimes contribute capital toward the construction of a new facility, preferably one in which it would be working. In return, the agency agrees to accept a much lower commission rate from the vendor.

You will also want to investigate a lease-commission combination, whereby the agency is guaranteed a minimum amount of revenue, but can also reap greater rewards if business surpasses expectations.

Akin to this strategy is the fixed-price-with-incentives contract. Here the agency receives a predetermined amount and will provide incentives for the concessionaire to continuously improve performance.

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Grant Alert

The Land O’Lakes Foundation in St. Paul, Minn., is supported by Land O’Lakes Inc. The Foundation’s mission is to “improve the quality of life in communities where Land O’Lakes Inc. has members, employees, plants and facilities; to proactively help rural communities prosper and prepare for tomorrow by donating resources that develop; and to strengthen organizations dedicated to human service, education and youth, civic and art endeavors.”

The Community Grants Program supports organizations throughout the north central, western, and eastern United States with cash awards and through employee volunteers.

Areas of interest include: alleviating hunger; building knowledge and leadership skills of rural youth; agricultural and cooperative education programs; supporting stewardship of soil and water resources while maintaining a positive balance between the environment, agriculture and global food needs; and quality artistic endeavors.

Extensive information on eligibility, guidelines and deadlines are available on-line and applications can be downloaded in Word format.

There is also a Matching Gifts for Educational Reform. Programs can apply to participate, allowing any employee gifts to be matched by the foundation.

Grants are made in communities in the following states: California, Idaho, Indiana, Iowa, Maryland, Michigan, Minnesota, Montana, Nebraska, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Virginia, Washington, Wisconsin.

There are grants lists, contact information, and annual reports available on the site. Visit www.foundation/landolakes.com for more information and specific application instructions.

Mick Jackowski, Ph.D., is an alternative funding specialist who can be reached at mickjackowski@msn.com.

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