The Cost of a Nonprofit Gym

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Fun times at The Mountain Goat. Photo: GOAT
Fun times at The Mountain Goat.  Photo: GOAT
Fun times at The Mountain Goat. Photo: GOAT

By Joe Robinson

Nestled between retail stores surrounding the Haywood Mall and the downtown airport of Greenville, South Carolina, lies The Mountain Goat, a small 5,000 square-foot climbing gym with a big mission: to provide a safe and healthy gym environment for the public while helping break the cycle of systemic poverty affecting at-risk American youth.

Advertised as the only 501(c)3 climbing gym in the US, The Mountain Goat is certainly a unique member of the climbing industry which demands both attention and an explanation.

In brief, while their mission is certainly worthwhile and fosters a positive gym atmosphere, the financial ramifications of operating as a nonprofit gym may prove more restrictive than advantageous in the long run.

Crunching the Numbers

Great Outdoor Adventure Trips (GOAT) – the parent organization of The Mountain Goat – was started in 2008 by executive director Ryan McCrary, who ran the operation entirely from the confines of his own home. After working for an advertising agency during the week, McCrary, along with a few volunteers, would take underprivileged youth rock climbing on the weekends. GOAT grew exponentially after the first summer and eventually added white-water rafting and mountain biking to its repertoire, as well as full-time staff.

In these early stages, McCrary had no intention of opening a climbing gym. Providing outdoor trips for at-risk students was the primary focus, so McCrary filed GOAT as a 501(c)3 nonprofit.

“When we started out and were just taking kids outdoors, it was a logical thing,” says McCrary. “None of the kids that came on the trips were paying anything and our revenues were from donations. When looking at it from that point of view, it made sense. It fit the traditional non-profit model of providing a service to the community and asking donors to support it.”

Outdoor climbing trips with GOAT.  Photo: GOAT
Outdoor climbing trips with GOAT. Photo: GOAT

As GOAT grew, there was a pressing need for storage and office space. McCrary also wanted a place where all the hard work of transporting kids and tracking down waivers would not go to waste on rainy days, younger children could adventure separate from older peers and all youth could train and climb year round.

In September of 2011, McCrary initiated a crowdfunding campaign to support this project which raised $35,000 of tax-deductible donations when an anonymous donor matched 75% of the money raised. Afterwards, GOAT teamed up with a local contractor to erect the owner-built climbing gym, which officially opened to the public in 2012 as The Mountain Goat.

While becoming a 501(c)3 nonprofit aligned with the original structure of GOAT and may have helped raise initial capital, it has not greatly impacted the way The Mountain Goat manages its climbing gym finances. GOAT acquires regular monthly contributions from its passionate donor base, “The Tribe,” which helps cover the expense of free youth programming and administrative costs associated with these programs. The Mountain Goat simply acts as an additional revenue source for funding the gym.

In fact, since The Mountain Goat charges the public for day passes and memberships in exchange for the service of climbing, all gym revenues are classified as “Unrelated Business Income” and are thus taxed like revenues of any for-profit business. Only donations are tax-exempt, a financial break which may enable expanded GOAT programming at The Mountain Goat but does not affect gym budget lines.

Photo:The Mountain Goat
Photo:The Mountain Goat

“That’s the biggest misnomer,” says McCrary. “The true designation as a nonprofit, that name itself is false. You can have a profit, and we actually pay taxes on the revenues from the gym. It’s owned by a nonprofit, but still taxed as a for-profit.”

The 501(c)3 status also bears a burden when it comes to gym growth. Since all profit remains within the company for programming, there is no equity to show big-time investors who can help The Mountain Goat expand its facility and sustainably serve more than an average of 1,000-1,200 kids per year. Some grants may only be available to nonprofits, but according to McCrary, this funding is not as easy to come by as one might think.

As a result, McCrary will be switching the status of the climbing gym to for-profit in the near future. While all earnings will still be directed towards serving at-risk Greenville youth, The Mountain Goat will now be able to generate equity to attract enough investments to support its ever evolving vision.

“There’s really not a ton of financial benefit in the nonprofit model for a climbing gym,” says McCrary. “From the side of serving the kids it’s fine, but we will eventually be spinning the gym into a for-profit in order to raise the capital needed to build a true commercial facility.”

Striking a Balance

Perhaps most important in terms of managing a nonprofit gym is balancing the drive for profit with the larger mission. While the GOAT board maintains executive control of big decisions, day-to-day operations of The Mountain Goat are run by gym manager Cam Hill, who shared a few thoughts on how they maintain a profitable gym atmosphere while serving at-risk youth.

According to Hill, most of the students in GOAT programs are on free or reduced lunch, the majority are black, most or all come from urban contexts and low socioeconomic communities, and many don’t participate in traditional sports. In fact, while the GOAT partners with roughly 40 organizations, about 15% of regular participants are involved in some capacity with the Department of Juvenile Justice.

Pouring holds is just one of many cool activities at The Mountain Goat.  Photo: GOAT
Pouring holds is just one of many cool activities at The Mountain Goat. Photo: GOAT

Another strong partner is The White Horse Academy, a nearby 90-day residential treatment facility which assists high school boys in overcoming drug problems. To create a stable gym environment for the public while also serving disadvantaged, juvenile and recovering youth, GOAT program participants who climb at The Mountain Goat are provided an in-depth gym orientation which covers safety precautions and basic climbing technique.

“To make sure it’s not hectic or rowdy for gym members and families, the most important thing is intentionality: having a conversation with students in the program which prepares them beforehand,” says Hill.

Taming the Pulpit

The Mountain Goat also exercises intentionality when it comes to religion. While GOAT is a Christian organization, The Mountain Goat is careful to not advertise or impose their beliefs on others. Not all climbers are religious, and some people have had negative experiences with organized religion. So as to not alienate gym patrons, The Mountain Goat does not play overtly Christian music and maintains an atmosphere where new customers would not know the organization was Christian unless they asked.

“People have been hurt by religious organizations, so some people right out of the gate may assume things about us,” says Hill. “We don’t wear it on our sleeve, and we don’t force it onto anyone. We want everyone to feel welcome, loved and appreciated.”

Yes, all employees at The Mountain Goat and GOAT identify as Christian, and many staff at GOAT teach a Christian curriculum to students. Yet the goal of programming is to develop youth as much physically and mentally as spiritually. Only Christian values like love, compassion, grace, mercy, patience, etc. are emphasized by Hill and his staff, values which he identifies as critical to running any business well.

In addition to providing in-depth gym orientations to GOAT program participants and turning down the religious gusto, the Mountain Goat also maintains a regular gym environment by hiring the right staff and training them to handle challenging situations with difficult populations during open gym hours.

“Our staff understands the mission of the organization, and most of the staff know the students,” says Hill. “If they are coming from our GOAT programs, then there is a good chance they will have behavior issues, and our staff is aware of who is in the program and understands their situations.”

For the most part, though, GOAT participants and gym customers climb separately at The Mountain Goat. Program typically runs from 10am to 3pm during the summer, and doors do not open to the public until 4pm on weekdays. Thus, contact between serious crushers and struggling youth is limited.

Paying it Forward

When members do interact with young climbers at The Mountain Goat, according to Hill, the interactions are mostly positive. Since The Mountain Goat is upfront about their mission on their website and during gym orientations, members there understand anyone walking through their doors could have a tough background and are thus friendly towards all climbers, especially when they see staff acting in kind.

Hill compares this phenomenon to the trend of paying for the drink of the person behind you at a fast-food drive-thru or in a Starbucks coffee line. When members see employees engaging with misfit climbers or read a blog article about how volunteers are impacting the lives of inner-city youth outside, they are more likely to act friendly themselves. This cycle of generosity promotes new member retention which, in the long run, should increase the number of youth GOAT can afford to serve.

“Making profit and serving people are not mutually exclusive,” says McCrary. “The better we treat people, the better this place is from the standpoint of serving underprivileged South Carolina youth and making money.”

Remembering the Intangibles

Before making a final decision on whether to start or morph into a nonprofit climbing gym, keep in mind that arguably the most rewarding outcomes of nonprofit gym work cannot be measured in real dollars.

For one, climbing is still a growing sport which has only recently entered the consciousness of mainstream society. The Mountain Goat plays a hands-on role in this development by expanding the availability of climbing to underserved populations who they have found can show the same fervor and potential as other young South Carolina climbers. At a recent open competition at The Mountain Goat, at-risk and minority students from GOAT programs took 3rd place in the Women’s Beginner category, 1st place for Men’s Intermediate and 3rd place for Men’s Intermediate.

For another, youth themselves can develop. The yearlong Mentorship Program of GOAT walks at-risk youth through a 3-step process of Outdoor Trips, Leadership Development and Employment grounded in the core principles of Responsibility and Relationships. Hill recounts the story of one youth who joined this program in 9th grade and had the graduation deck stacked against him. After being mentored by a climber at The Mountain Goat who was in The Air Force, the student graduated from high school and joined the Air Force himself. The parties still interact with one another to this day.

The Mentorship Program not only empowers vulnerable youth to graduate from high school, it also prepares them to become economic agents. GOAT aids youth in financial literacy, prepares youth for job interviews and hires advanced participants to work at The Mountain Goat. They also partner with The Landmark Project in town which makes additional hires in the areas of order placements and screen printing for t-shirts depicting inspirational outdoor places. Several organizations even give car grants for participants to get to and from work.

These successes suggest a nonprofit mission is still valuable, regardless of the monetary value attached to the corresponding tax status. 501(c)3 or not, the mission of The Mountain Goat is still worthy of consideration and admiration.

“There’s a cost benefit to everything you do in life, and a nonprofit changes the dynamic of that,” says Hill. “The biggest difference between a for-profit gym and a nonprofit gym is the mission. Our mission is not to make money. However, making money is a major part of the vehicle which allows us to pursue our mission of serving at-risk youth.”