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More than 35,000 people will on Sunday run the London Marathon. Even if it fails to wrest back the title of the world’s biggest marathon – defined as the one with the most finishers and now held by New York – it will remain the most phenomenal.

This is because most of those who turn out will be raising money for charity, and the amount they will raise is phenomenal. They will collect £30m or more. This makes the London Marathon Britain’s largest annual charity fundraiser on a single day. It dwarfs the BBC’s Children In Need appeal which on its November night last year raised £17.25m.

How does one calculate the money raised? Well, it has become easier than it once was. In 1993 David Bedford, the marathon’s director, introduced the Golden Bond, the sale of places in the race to charities. For a fee of £1,250, each charity was guaranteed a place in the marathon for five years.

The idea was not greeted with universal approval. Chris Brasher, co-founder of the event, was one of those resistant to the idea. Nevertheless, the scheme proved a huge success. By last year’s race, the number of Golden Bond runners had grown to 14,178. Charities were asking for guarantees, starting at £1,000 from each runner, but were actually collecting an average of £1,800 from them. Deducting the £250 cost left an average income of £1,550, and a total of almost £22m.

To reach the £30m figure, the remaining 21,000 runners would have to raise only about £400 each.

For charities, the London Marathon has become a money-spinner. This year, the British Red Cross expects to raise in excess of the £60,000 in guarantees. Refuge, the charity that supports victims of domestic violence, hopes for about £50,000, while Whizz-Kidz, which supports disabled children, has targeted £1m. And so it goes on.

But what of the marathon itself? When Brasher and John Disley established it in 1981, the idea was that the surplus from each year’s race was allocated to charities within the London boroughs. For the first 12 years, the amounts raised were modest by recent standards, the highest being the £294,673 awarded after the 1992 accounts.

For last year’s race, the money paid by the London Marathon to its charity arm, the London Marathon Charitable Trust, was £2.6m – a vast increase. However, if one separates the income streams it is possible to designate where that money comes from.

In 1992, the marathon nominated two official charities, and there were no extra charges for their places. Last year, while the standard entrance fee was £27, the charities paid £250 a place. The difference in administrative costs between the two types of entry is negligible, the marathon is simply trading on basic economics – a demand for charity places much greater than the supply – and raising the price accordingly. For the marathon it meant a huge revenue increase. The 14,178 Golden Bond runners last year generated £3.54m compared with just £382,806 had those places been sold to non-Golden Bond applicants.

The marathon also receives annual charity be-quests from runners who are not successful in the lottery for places. In last year’s race, 98,000 runners applied for places and about 21,000 were successful. The organisers will not reveal how many of the 77,000 ticked the bequest box, but it would be unlikely to be lower than 50 per cent according to insiders at the marathon. With a net return of £20 for each runner (they get a free T-shirt which accounts for the other £7), that makes a total of £770,000 that should go directly to charity.

If we aggregate the £770,000 bequested and the £3.1m surplus (£3.54m revenue minus the £382,806 standard entry figure) earned from the Golden Bonds, the total of £3.9m far exceeds the £2.6m gifted to the charitable trust in the 2005 accounts. Rather than giving all the money raised to charity, the London Marathon appears to be using part of this cash to pay for administrative costs.

But Nick Bitel, chief executive of the event, says: “The sale of services to other charities is not unique to the Flora London Marathon,” he says. “Lots of charities do this, enabling them to raise much-needed operating in-come. We are no different; if we didn’t raise money from TV, sponsorship, entry fees and charity places, the Flora London Marathon simply would not happen.”

History does not concur, though. For 12 years the event not only survived, but under Brasher flourished without selling a single Golden Bond. Nor does the London Marathon do itself many favours by the lack of transparency in its dealings such as refusing to reveal the total of bequests.

The charities, however, will not be arguing. While they would love to pay less for their places, the richest irony is that the demand for Golden Bonds is growing, and they are going to have to pay more instead. Next year, a Golden Bond will cost £300 and the richest marathon in the world is set to get even richer.

Peter Nichols was international race director of the London Marathon from 1990-1992

Copyright The Financial Times Limited 2017. All rights reserved.
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