We encourage all venues to take a proactive approach in managing your venue’s sinking fund, as this is the only way of guaranteeing the venue’s long-term sustainability and ensuring future tennis players at the venue can enjoy playing at a quality facility. We provide some guidance to help you think about the best approach for your venue in managing your sinking fund.
What is a Sinking Fund?
The term ‘sinking fund’ refers to the financial savings that the venue has set aside over a number of years to maintain your facilities to a high standard; this covers all aspects from the courts through to the clubhouse. In particular, tennis courts and floodlights only have a limited shelf-life before the club needs to think about resurfacing and/ or replacing them, and this can cost tennis clubs a significant sum of money. Clubs can often find themselves in financial difficulties if they have failed to address their sinking fund requirements and raising the necessary finances at this stage can be challenging when the tennis courts are potentially past their best and less attractive for new members to join the club. Relying on grant funding from external organisations to improve the facilities is not a prudent or sensible approach.
Developing a Long-Term Sinking Fund Plan
Effectively managing your sinking fund does not need to be particularly onerous or even costly to the club if undertaken over a long-term basis. Club’s come into difficulties when they have left it to the last minute and not set aside any savings. A guideline to work from is that tennis courts and floodlights are likely to need replacing after 10 years of usage (this provides a general timeframe to work from, but is likely to differ slightly from club-to-club).
Therefore to develop an effective plan to managing your sinking fund, the club should breakdown the total costs to replace the courts and floodlights into a ten year savings plan. Each year the club should ring-fence the allocated annual amount into their sinking fund to put aside for the facility redevelopment – and the club should resist touching this money for any other scheme or initiative.
The Club Sinking Fund Calculator
Often the most challenging part is calculating what your club’s sinking fund should amount to. We have produced a simple calculator to help you understand the ball-park figure of what your club sinking fund is likely to be over the 10 years.
It is worth noting that this calculator only takes into account your tennis courts and floodlights, and a club should also additionally consider in their sinking fund other long-term development costs such as maintenance/ improvements to the clubhouse and to the fences around the courts. So this calculator should only be used as a guide and not as a definitive figure – as mentioned earlier, the sinking fund will change on a club-by-club basis.
To use the sinking fund calculator enter the details for your club where requested and it will provide you with the following information:
The annual amount of money a club should save to meet their sinking fund requirements based on a 10-year savings plan.
It provides a basic indication of the proportion of each member’s annual fee should be ring-fenced for the sinking fund.
It provides a year-by-year breakdown of the recommended size of your sinking fund and how much your club needs to save to meet its requirements.