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Business Observer Friday, Sep. 5, 2003 15 years ago

CEO Insight: Sandy Loevner

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It requires implementation of serious business principles to run one of the country's biggest nonprofit charity events, especially in a time of limited charitable giving.

CEO Insight

Sandy Loevner

It requires implementation of serious business principles to run one of the country's biggest nonprofit charity events, especially in a time of limited charitable giving.

By Kendall Jones

Senior Editor

It's impossible to look at the names on the board of directors of the Florida Winefest & Auction and not feel a little sense of awe. They are Sarasota's most prominent power players: David and Myrna Band, Allan Barberio, David Berger, Vern Buchanan, Michael Moulton, Margaret Wise - the list goes on.

But perhaps the most important name on the list is board President Sandy Loevner, who has been running the Winefest, a nonprofit corporation, for 13 years. During that time, the Winefest has donated more than $4.2 million to children's charities in Sarasota and Manatee counties, donating $403,000 this year alone. For the last five years, the Winefest had annual revenues of more than $1 million. A few years ago, USA Today ranked the Winefest as the country's third largest charitable event.

It takes a lot of pure business sense to run an entity like that. "You take away the words '501(C)(3) not-for-profit' and what you have is the word 'corporation' and that's exactly what we are," says Loevner. "We have investments, audits, bank accounts. The only difference between us and a for-profit corporation is the more money we make, the more we give away."

And this corporation has faced many of the same challenges of its for-profit counterparts, particularly escalating budget pressures, a significant address change and increasing competition.

Nonprofits have suffered in the last couple of years; when the economy gets tight and people and corporations make less money on their investments, they tend to give less. "We rebend paperclips around here," says Loevner, whose staff includes two employees and more than 250 volunteers. Like a company facing a budget crisis, the Winefest has responded by getting practical and creative.

One important expense for the Winefest is insurance. Most concerts and other events purchase event cancellation insurance - if the lead singer gets laryngitis, the insurer will pay for ticket refunds and related losses. But the insurance is expensive. "One year, we looked into it, and it was about $40,000 per year," says Loevner. "That would fund X number of grants. We'd rather keep that money in the bank and earn the interest on it."

The solution for the Winefest was to self-insure. They keep enough money in the bank to cover the cost of a cancellation, a minimum of $500,000, which earns interest for the entity. "We have already promised the money to our charities," says Loevner. "We have to have enough to pay the charities and refund ticket money. Plus, by the time we find out about an event cancellation, due to weather, flash floods, etc., we have already got invitations printed, mailings out, all of that, so we have to have enough to pay for that as well."

Luckily, the Winefest has never had to tap into its self-insurance funds.

To get corporations as sponsors of the Winefest in tough times, the Winefest has gotten creative. "We tell businesses to let us do their entertaining for them," explains Loevner. "They don't have to entertain a bunch of clients - we can do that for them. We are also able to make a company's charitable donations for them. We have so much underwriting with ticket sales, those pay our expenses, and we basically give away 100% of our auction proceeds and corporate sponsorships. ¦ We have also put together a really good marketing package, combining tickets with advertising and exposure, so our sponsors get the most bang for their buck."

To ensure that the charities are maximizing the use of the donations, each charity is monitored. "We have only had to pull the plug on a charity two times, due to money allocation," says Loevner. "We are all about disadvantaged children in Sarasota and Manatee counties; helping those kids eat and sleep is our priority."

Case in point - a festival company hired to run the first Winefest 14 years ago left $34,000 behind for charitable donations, turning off a lot of locals. But David Band and Loevner, who worked together on previous charitable events, stepped in and the next Winefest resulted in $300,000 charities.

In tough times, it's also a challenge to get people from outside the area to travel to Sarasota. "We need to get people to come here from Chicago and New York and the Midwest," says Loevner. "We have not raised ticket prices because of the economy, but it's harder to raise money, because of the economy. We are lucky in that this is a destination event. We sell Sarasota and what it has to offer, with its cultural atmosphere and beautiful venue. We try to make the winemaker dinners interesting - in extraordinary homes or on boats."

But as any Realtor will tell you, in order to have a destination event, one thing matters most: location, location, location. Until two years ago, the Winefest was at the Longboat Key Club, in huge, air-conditioned tents facing the golf course. The Winefest brought in engineers to rig up generators to cool the tents - at a cost of about $45,000 per year. But there was a mystique about walking into a tent through palm trees with the Gulf breeze whispering next to you.

But about two years ago, the Longboat Key Club developed otherplans and kicked the Winefest out. Around that same time, the Ritz-Carlton Sarasota was opening, and it became the home of the Winefest, not without headache.

"At the Longboat Key Club, we had a map drawn for eight years that we had to reconfigure in 11 months," says Loevner. "The Ritz could not handle as many people. We had to have fewer events. Some people complained."

But the Winefest adapted to its new home. It cancelled the Friday Suncoast Showcase Lunch-Tasting its first year at the Ritz, but last year, brought it back in tents at the Van Wezel.

This coming year, the Winefest is having the Friday lunch at the Ritz. In fact, the lunch is at 2 p.m., and the Ritz staff will have the lunch broken down and a new set-up in place in the same ballroom for cocktails for the black tie gala to begin at 6:30. It's a matter of adapting to circumstances.

Part of that adaptation is learning to compete with a new crop of wine festivals - including ones in Naples, Jacksonville and the Panhandle. Increased competition is a common issue with nonprofit corporations, especially when their product or service is successful. The Winefest responds by differentiating itself.

"Our biggest challenge is to keep a top quality event with all the competition in Florida and elsewhere," says Loevner. "We first do that by keeping the wineries happy. They say we give them the best trade show in the country, with 600 to 900 or more people attending each of the big events. Plus, we attract people who can afford to buy these wines. And then there's that Sarasota sophisticated lifestyle. We also keep the community happy by making sure we are not an elitist event. Our ticket prices start at $10.00."

Compare that to the Naples wine event, which attracts a relatively closed circle of about 300 people, with the cheapest ticket price last year of $3,000.

"We stay above the competition with sponsors by enabling them to trust how we spend their money," Loevner says. "Solid business principles are always at work here. We have a financial committee made of people in town with a strong financial background. They advise us as to where to make investments, where and how and for how long to keep them. Alan Barberio (of KB Group) is our treasurer. Our books are audited every year. Plus, our board is made of friends who have worked together for a long time and developed trust. The names on our board lend credibility."

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