The Risks And Rewards of Street Festivals for Neighborhood Organizations

By Jordan Graham | Thursday, July 7, 2011

Street festivals such as last year's Retro On Roscoe, shown here, can be a big financial risk for neighborhood organizations. Credit: Mike Fourcher.

This coming weekend the intersection of Belmont and Damen Avenues will be packed with Chicagoans seeking a juicy burger, live music and a day outdoors, as the Roscoe Village Burger Fest takes over the street junction and surrounding neighborhood.

But what exists as a day of leisure for most can be a nerve-racking, painstaking endeavor for the hosting organization. Roscoe Village Burger Fest is owned by the Roscoe Village Chamber of Commerce, and the income generated from the event can account for as much as 65 percent of the nonprofit’s operating budget.

A failed event, whether caused by poor promotion or a chance rainy day, can spell disaster and even bankruptcy for some hosting organizations. So with their life on the line, a relaxing day in the sun becomes an exercise in risk mitigation.

What emerges from efforts to reduce risk are a series of partnership between nonprofits, event management companies, food vendors and sponsors, which pass on and absorb uncertainty until an agreement can be reached where all parties feel comfortable that their potential rewards outweigh the gambles they’re taking.

For the majority of Chicago street festivals, hosting nonprofit organizations hire for-profit management companies to oversee their events, often because their financial agreement alleviates the nonprofit’s contingency, but also because throwing a successful event in the city requires an incredible amount of planning through man-hours that lightly-staffed chambers of commerce cannot supply (a medium-sized street festival can take anywhere from six to 12 months to plan).

“The general consumer thinks that [everything] is provided for,” said Hank Zemola, CEO and founder of Special Events Management, a Chicago-based company that manages 15 Chicago street festivals, including this weekend’s Burger Fest. “The City only gives you the right to close the street, and if you’re really lucky they’ll put up ‘no-parking’ signs for you. But that’s it.”

Street festival management companies can offer a variety of services, including filling out paperwork for City permits and licenses, supplying event equipment, planning festival logistics, creating promotional materials, booking entertainment and bringing in sponsors.

In return, management companies can receive a portion of event income, ranging from working for tier-based incentives to taking the lion’s share of the profits, depending on the contract. Additionally, these for-profit entities are provided something they could likely not obtain on their own: access to the public way.

Though it is not illegal for the City to grant street closures to a for-profit entity, City officials frown upon closing public avenues for a private company that does not benefit the surrounding community. Hence, a marriage of convenience and necessity between management companies and nonprofit festival owners was born.

But some festival owners caution against becoming too dependent upon management companies, stressing the importance of maintaining control and ownership of your local events and fundraisers.

“You don’t want to get married to a producer so much that the event can’t happen without them,” said Maureen Martino, executive director at the Lakeview East Chamber of Commerce, which organizes a two-day art festival in September. “We used to work with a company that does [special event] production but it wasn’t financially in our favor to do so. And if you can motivate volunteers and get the right people, you can certainly be putting on a [financially successful] festival.”

Garrett FitzGerald, executive director of the Northcenter Chamber of Commerce, which coordinated Ribfest Chicago in mid-June, said that working with management companies can be necesssary early on for newer festivals, but that he would never relinquish control of an event he owned.

“The point of these festivals is not to make money in years one or two, but make money in years three, four and five,” FitzGerald said. “I would not enter into an arrangement with a private management company where they get ownership of anything.”

Still, many of the city’s nonprofit street festival owners will relinquish a good deal of control for the assurance of a profitable event and to avoid the threat of a rainy day.

Chicago’s chambers of commerce are delegate organizations to the City and receive City grant funding. Though members are not government employees, the organizations are subject to City audits and financial monitoring. Chambers of commerce use their funding for organizational operations, local programming, neighborhood beautification and fundraising efforts.

Roscoe Village Burger Fest will be held July 9 and 10 from 11 a.m to 10 p.m. on Belmont Ave. between Damen and Leavitt Avenues in Roscoe Village.

Tags: , , , , , , , , ,

Share this now!

  • http://twitter.com/dionusis dionusis

    The work these festival managements companies do is convenient,
    but not that complex to be reproduced by a well organized group of people. Make
    it sound “more” then what it really is just is an attempt to justify their
    price. But even at that price, the result is a low quality product. A gap-style
    festival.. stale, monotonous, repetitive, nothing unique or that characterizes the
    neighborhood. That’s festival after festival in the same summer..
    year-after-year…  One suggestion is to
    have many less festivals, and chambers of commencers can pull in resources for
    common events. 

  • Pingback: This Weekend: Summer on Southport | Roscoe View Journal

Spread the word