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Tuesday, June 14, 2011

Some Good Ol’ Nonprofit Americana - Kevin

For the past four years, our son has participated in the Blue Ridge Soap Box Derby Classic in Waynesboro, Virginia. This annual race, which takes place in late spring, is preceded with hours of preparation by participants and their parents or guardians. To some, the amount of time is disproportionate to the seemingly brief race down a very steep street. The gravity propelled race between opponents whizzes them along Main Street, lined with American Flags, safety cones, hotdog vendors, and spectators. With the goal of securing a coveted spot in the yearly All American Soap Box Derby World Championship in Akron, Ohio, racers rely on their driving skills to reach the finish line first. Often, races are determined by fractions of a second, as we learned last year when Nate finished second behind the winner of his division by .001 of a second.

Soap Box Derby racing has become an American tradition. Started in the early 1930’s by a group of neighborhood youths who used various materials to construct their cars, racing quickly became organized after reporter Myron Scott featured the youths in a story for the Dayton Daily News. Scott was so impressed by the events that he copyrighted the idea and subsequently organized the first Soap Box Derby held in 1934 in Dayton, Ohio. The races exploded in both race participants and spectators. It did not take long for civic leaders to recognize the positive impacts that the event brought to the community. In 1936, Akron public officials with assistance of the Works Progress Administration built Derby Downs, a permanent soap box racing facility. Since Scott’s idea came to fruition, the International Soap Box Derby Inc. (ISBD) has experienced many changes in structure, sponsorship, and mission. Not unlike many nonprofit organizations, these changes have resulted from a variety of social, political, and economic forces upon this 501(c)(3) organization throughout its seventy four year history.

Having just recently read and discussed The Bankruptcy of the Sans Antonio Symphony: Background and Financial Statements, I found similarities in the tribulations facing both the San Antonio Symphony and the ISBD. As we discussed the case of the San Antonio Symphony, the topic soon turned to the need for fledgling nonprofits to redefine their missions. What ensued was a rather passionate exchange of ideas concerning mission redefinition. Antagonistic arguments that the symphony could no longer survive and therefore it must redefine its mission were characterized as “dumbing down.” Rebuttal arguments suggested that redefining the mission does not necessarily “dumb down” the entertainment provided by the symphony. Regardless of which side of the argument one may take, it is evident that the symphony is in need of a fix, one that can be learned from the ISBD.

Similar to the situation the San Antonio Symphony found itself, ISBD has also experienced dire financial troubles. With the loss of major sponsors such as Chevrolet, Goodyear, Home Depot and Levi Strauss and the dwindling number of spectators, ISBD began a financial decent that was faster than that of a world champion racer. Adding to their troubles was an increase in the number of participating racers. In 1975 there were 100 racers. By 2010, the number of racers had increased to over 600. While this may seem counterintuitive, it provides evidence of poor governance on the part of board members.

It was clear that the ISBD needed to bring its propulsion towards bankruptcy to a screeching halt. Unwilling to lose the positive impact that the ISBD had on the city of Akron, in 2008 the city guaranteed $623,000 of ISBD’s debt. This action brought an end to a lawsuit FirstMerit Bank had brought against the ISBD to recover in excess of $580,000. Still, the troubles for the ISBD were not over.

The ISBD needed help, bigger than that which the city of Akron could provide. Enter Roger Rydell. Rydell joined the ISBD’s Board of Directors and immediately went to work using his experience as a public relations executive with Goodyear Rubber and Tire Company. Rydell called on a contact he had at USA Today for help. The information that the contact released of the ISBD’s troubles reached marketing columnist Bruce Horovitz who would eventually write a story about the Derby and its financial demise. The story made it to Corbin Bernsen, a Hollywood actor. Bernsen became very interested in the plight to rescue the ISBD from bankruptcy and committed to the production of a movie featuring the American tradition. Of course Bernsen faced the many challenges that are involved in the production of movies such as funding and distribution. Bernsen, fearing that Hollywood money would take the movie in an undesirable direction, decided to appeal to the wealthy citizens of Akron for the money needed to produce the film. After months of trying to convince skeptics to invest in his film, Bernsen obtained the financing he required and began shooting the movie, 25 Hill. The movie is currently set to premier in Akron on July 9, 2011.

The ISBD, under the guidance of Roger Rydell, came to an important realization. One that resource dependency theorists claim leads to the failure of nonprofit organizations. That is, organizations that have limited funding sources, especially governmental funding, are more likely to be disbanded (Fernandez, 2008, p. 118). Nonprofits must diversify sources of funding, therefore enabling the organization to avoid failure when a particular source expires. Rather than redefining the mission of the ISBD, the Board of Directors chose to instead concentrate on attracting more interest in derby racing. The ISBD has hopes that Corbin Bernsen’s film, 25 Hill, will be viewed by a large audience thus facilitating the diversification of funding sources. Through the film, Rydell and Bernsen, expect to fulfill their mantra, “Save the dream, Save the tradition, Save the Derby.” Further diversification efforts by the ISBD include revamping the Board of Directors. New board members, those with ties to corporate resources, were brought on board.

As the ISBD, Corbin Bernsen, and thousands of soap box racers enthusiastically await the release of 25 Hill, nonprofit organizations in similar situations should be paying attention too. Organizations such as the San Antonio Symphony may observe that there are alternatives to mission refinement. However, these alternatives will require the use of unorthodox paradigms or entrepreneurial strategies to increase funder resources.

If the strategies are successful, the ISBD will continue to allow champion racers to hoist a trophy and proclaim, “I’m going to Akron!” Just as our son Nathan did on June 11, 2011.


Fernandez, Juan. Causes of Dissolution Among Spanish Nonprofit Organizations. Nonprofit and Voluntary Sector Quarterly. 2008. 37; p.113-37. Web.

Ethridge, Mary. Feature Story: Saving Akron’s Soap Box Derby. Today’s Machining World Archives: Volume 06 Issue 05. June 2010. Web. 12 June 2011.

Barlow, Tom. Soap Box Derby's financial wheels wobbly but still rolling 16 June 2010. Web. 12 June 2011.

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