Color Me Rad race donated 6% of total revenue to charity

10:40 AM, Jul 24, 2013   |    comments
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(WBIR - Knoxville) It seems every other weekend in Knoxville, there's an opportunity for runners to hit the road for a cause. Though for those who run the Color Me Rad 5K, the cause they're benefiting may have more to do with profit than charity.

Of the 9,000 people who paid $35-$40 to run on a city street and have colored corn starch hurled at them last April, $1.18 of their registration fee automatically went to charity, according to calculations based on data provided by Color Me Rad.

In April, 7,000 runners registered for the race for $35. Two thousand people registered later for $40, based on previous WBIR reports. That puts CMR's gross revenue at around $325,000 (not including race merchandise).

The event donated about $20,000 to East Tennessee Children's Hospital, or around 6 percent of total revenue.

The for-profit company includes on all promotional material distributed in Knoxville "a portion of proceeds to benefit the East Tennessee Children's Hospital."

Race Directors Tommy and Kristine Peterson were recently in town, visiting the hospital, handing out t-shirts, and speaking with local media.

"We just hopefully wanted to brighten a day or two," said Tommy Peterson.

But some local runners were surprised to find out how little ends up staying in the community.

Knoxville Track Club member Laurie Gregory estimates she's run close to 300 races in her lifetime. She says when deciding which 5K to participate in, she frequently pays attention to which charity it's benefiting.

"Because there's a lot of 5Ks locally, and if the 5K is going to benefit a charity that I think is good, then chances are I'll choose that particular 5K," said Gregory.

She says she's never run Color Me Rad but has seen their promotional material around town.

"I think if you're going to advertise yourself as benefiting a charity you really should be a little more open about what percentage of your profits actually go to that charity," said Gregory.

According to Color Me Rad, participants can use a special code to boost their donation by 15%, but they typically donate between $1.25 and $3 of each registration fee to a local charity. The amount varies based on how many volunteers the partnering charity supplies.

For the most recent Knoxville race about $1.18 of every registration fee went to East Tennessee Children's Hospital.

At every one of their races nationwide, the company partners with a local charity and asks them to supply volunteers to help operate the race. Color Me Rad than makes a donation to the charity on 'per volunteer' basis. That's where the $1.18 from every Knoxville runner's money went.

In April, ETCH supplied CMR with about 170 volunteers. In exchange, CMR offered the hospital a donation of $75 per volunteer for the first 100 and $30 a volunteer for the additional 70, according to ETCH to a total of $10,700.

CMR donated another $5,400 to ETCH on behalf of people who used the promotional code at registration.

According to ETCH, the race also gave them an additional $3,892 from online donations, for a total donation of about $20,000.

CMR's Knoxville race director and public relations director both said they don't know how much it cost to put on the Knoxville race, and company policy keeps them from revealing that information anyway.

But Race Director Kristine Peterson estimated that about 20% of race proceeds went to charity.

10News attempted to verify that figure by compiling a list of known race expenses, such as city fees, and estimating other expenses based on figures provided by comparably sized races.

Based on those numbers, 10News estimates CMR spent about $21,000 to hold the race, including costs like space rental, city fees, security and traffic control, food, water, and shipping costs.

CMR Director of Public Relations Gretchen Willard declined to provide specific numbers, but told 10News that is "not even in the neighborhood."

According to Peterson, since they are a for-profit business they factor in to their race expenses like travel, employee salaries, and advertising, which raises costs.

In April, the race route doubled back along Neyland Drive and for the privilege CMR paid the City of Knoxville a total of $6,300, including clean up costs.

A happy partnership

East Tennessee Children's Hospital Spokesman Seth Linkous says "we couldn't be happier" with the partnership because CMR does most of the planning, and beyond rallying volunteers, ETCH incurs very little risk.

"From our stand point it does not require a lot of effort or a lot of work from our staff," said Linkous.

"It's a great deal for Children's Hospital because it's $20,000 we didn't have to begin with," said Linkous.

He added that the race directors are generous with their time and their swag.

But the for-profit model coming to town isn't sitting well with some of those in the Knoxville non-profit 5K community.

For-profit model's impact

One of CMR's tag lines is "ruining other races since 2010," and some races in town are concerned they'll do just that.

For example, CMR scheduled last April's race for the same weekend as the Knoxville Marathon, and the same date as the Covenant Kids Run. Traditionally a race with increasing attendance, marathon organizers say last year was the first time in children's race history that attendance went down. According to Race Director Jason Altman, about 20% of every runner's registration fee benefits the Knoxville Track Club, a non-profit, and their partnering charities. That's everything left over after race costs.

Prior to that, CMR scheduled their October 2012 race for the weekend before the Susan G. Komen Foundation's fundraiser "Race for the Cure." Both attendance and fundraising for the event were down.

Altman says he isn't concerned about CMR's future impact on the track club, or their biggest event.

"We have a strong enough presence in the community, we've been around for more than 50 years," said Altman. But he is concerned for the smaller races the track club helps put on.

"I do see some of the small start up races, trying to use a 5K where they get 200 or 300 people as a fundraiser, [Color Me Rad] may be hurting them. They may not make any money at all," said Altman.

The upcoming CMR race falls on the same weekend as two non-profit races: one to benefit Alzheimer's Tennessee and another to benefit Sevierville schools.

According to ETCH, the race plans to make their appearance in Knoxville a bi-annual event.


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