What is an equity club vs. a country club?
Many people are looking for ways to stay fit while building community and making friends. Joining a club is a great way to do this.
You may have heard the terms “equity club” and “country club” but not know the difference between the two.
Our staff at Paseo Club have grown up in country clubs and equity clubs and know the ins and outs of these organizations. In this article, we will explain what types of clubs these are, the pros and cons of the clubs, and the typical expenses associated with each one.
Equity clubs
What are equity clubs?
Equity clubs have been around since the 1800s. By definition, an equity club is a club that members join as stakeholders and partial owners of the club.
Generally, these are not-for-profit clubs, and the manager works for the members. There is a board of directors who create policies for the club that the management implements. The board reports to the president of the club.
The general manager is the club's chief operating officer and is hired by the board.
How does equity club membership work?
What makes an equity club unique is that it is owned not by a corporation or private person, but by its members. That means members both have the power to make changes at their facility but they also bear the responsibility of caring for and affording it.
This means that members are financially liable for the club and for making sure it turns a profit.
The way equity clubs work is that they usually offer a bond in return for the member’s initiation fees. The bond accrues a profit and is “purchased” back by the club at a higher value at the end of the membership.
Equity clubs have boards of directors that oversee a number of facets of the club.
- operations
- budgets
- business plans
- compensation
- policies
An outside resource is often hired to handle the day-to-day operations.
What are the fees and costs of an equity club?
The fees and costs of an equity club are exorbitantly higher than other types of clubs because the members are actually owners. Any time the club’s facilities are built, updated, or changed the members are charged to cover the costs.
Depending on the number of members and exclusivity of the club, the initial membership fee can range from about $5,000 to more than $250,000.
Once a person becomes a club member, they must pay annual dues. The amount depends on the number of members and the costs of operating the club. Fees can range from $300-$2,000 per month; clubs with fewer members are more exclusive and more expensive.
In addition to membership fees, most equity clubs require you spend a minimum amount each year on food and other amenities (golf cart, locker room, club storage usage, etc.). If the minimum is not reached, the members are charged for the difference.
What are the benefits of being a member of an equity club?
Members of equity clubs have ownership, and with ownership comes voting rights. This option gives individual members influence and control over the club — its needs and the direction it takes. A private club is always open to member feedback, but membership dues are not the same as stakeholder fees.
Country Clubs
What is a country club?
Country clubs are the most popular type of club in the US. They are private clubs that have paying members. They generally offer recreational facilities, particularly golf, tennis, and swimming.
How does country club membership work?
Most country clubs are corporate-owned and are expected to generate a profit. Members pay fees and dues but do not have the power nor the responsibility of owning the club.
Members of country clubs do not have voting rights and there isn't a board that oversees operations.
The general manager has the authority to run the club and must lead each department. Rather than depending on equity members who may lack the skills and expertise, the responsibility of running a country club shifts to professionals.
Although, there are some country clubs that do use the equity club model to manage their club.
What are the fees and costs of a country club?
Country clubs tend to be more affordable in comparison to equity clubs. Because members are not stakeholders, they are just paying dues. Although dues can range depending on the type of club, the amenities available, and the location.
What are the benefits of being a member of a country club?
Members of country clubs prize the services and resources that come with being a part of a country club. Members can expect top-rated golf courses, pro-shops, dining options, and more. For many members, their country club is their headquarters for social and business connections.
Are the facilities at country clubs similar to those at equity clubs?
The facilities at country clubs vary widely. But overall, they do offer similar resources.
- Golf course
- Clubhouse
- Restaurant
- Pool
Additional amenities can be:
- Pro shops
- Practice facilities
- Tennis courts
- Fitness centers
- Kids programs
The environment of both clubs provides the experience of exclusivity, social positioning, convenience, leisure, and business and personal community.
Which club is best for me?
The difference in the approach to membership is the primary distinction between equity clubs and country clubs. Deciding which club is best for you really comes down to mentality. If you don’t mind the additional obligation, equity membership could be for you.
Some people prefer the extra control and influence that comes with “running” a club. They welcome the extra work that’s involved. The bonus of more exclusivity and potential financial gains makes equity club ownership an attractive option for many.
On the other hand, those looking for a more stress-free and relaxed club experience find country clubs the best option. They often have most of the advantages of an equity club without the added responsibility.
Should I take a tour?
Now that you have read this article you will have a better understanding of which club is best for you.
It is always recommended to tour a facility before joining it. That way you can try out the facilities, meet instructors and staff, and visit with other members.
Remember to review the upfront and long-term costs with staff. Each club has specific policies regarding membership, resignation, transferability, and refundability.
Are you still not sure which club you want to join? Learn more about different types of clubs by reading this article that compares country clubs versus social clubs.
If you are located in Santa Clarita Valley and you’d like to check out a social club, swing by the Paseo Club. We’ve got tennis and pickleball courts, a junior-Olympic pool, a fitness center, and programs for kids and adults of all ages. Make an appointment for a tour today.
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