Organizing a medium- to large-scale "happening" — like a footrace, or a concert, or a convention — can involve a lot of uncertainty. The weather may turn bad and force a cancellation. Sponsors may drop out. Suppliers may fail to deliver. Entry fees may be set too low to cover up-front costs, or not enough participants may sign up in advance.

So events get cancelled, sometimes at or near the last minute. Two contrasting examples from this year's local running calendar:

• When a winter snowstorm attacked on the morning of the 42nd Annual George Washington's Birthday Marathon (16 February 2003) the DC Roadrunners Club http://www.dcroadrunners.org/ did the honorable thing and refunded all advance entries. This was a significant cost to the Club, since it had already spent much of the money to rent equipment and facilities, engrave medals, etc.
• When the promoters of the 2nd Annual DC Marathon discovered that they were deep in a financial hole they cried "terrorism security threat" and abruptly called off the race. Those individuals who signed up early lost all their money. This being America, lawsuits ensued and are still working their way through the court system.

The answer to this sort of problem is straightforward. First, full disclosure: announce on the entry forms specifically who will bear the costs of nonperformance and what will happen if, for any reason, an event doesn't take place as scheduled. Second, offer event insurance: as a surcharge, or as part of the basic price, collect an appropriate amount to go into an escrow fund (or to a third party) for use in making everybody whole in case something goes awry. Reliable organizers with a history of good performance will be able to charge a low fee for this service. New events, or those set to occur at a weather-wise delicate time of year, likely must ask for more up front.

Simple stuff — but making risk explicit, and shifting it to those who can manage it efficiently, helps everybody make better decisions.

TopicRunning - TopicRecreation - TopicSociety - 2003-08-28

(correlates: DetectiveWork, Comments on ImpossibleStandards, FunVersusEntertainment, ...)