Am I missing something here ?
SPAM Biking, a small local club, put on events, charge about £18 entry and make a large donation to charity from the profits.
HONC is another club event, £15 entry and another large donation to charity.
All the big events that have got a sponsors name tagged on to them, Marin Rough Ride, Merida/CRC Marathon, Kona Bike Fest, Wiggle Enduro6 Etc. are £30+ with no mention of charity donations.
I thought the idea of sponsorship was that the sponsors put money in to an event in return for publicity, not that they took money out.

The organisers of big events tend to do that as their job- organise events, so they tend to be run as a business. Small club events are almost always purely voluntary.

I've always thought the same until we started to organise the SSEC2010. We're selling entries at £41 however this is costing us £40.68 per person and thats after bartering with suppliers! For this we are providing 3 nights camping, 1 meal, live bands, Rollapauluza, beer blah blah blah……….
If there's anything left in the pot after we're done then the air ambulance will benefit from us.

The bigger the event the bigger the costs, alot of costs may not be obvious and/or visable.
If labour is being given free then that is a big cost saving, but the bigger events are a business or the driving force behind them is a business and there main aim is to make money.
I've been involved with the bigbikebash, and am in the planning stages of running the bar for a 5000 ticket music festival on the same site, whilst there are some similarites the size and fact the events being run by a company make it a totally different kettle of fish.

It keeps the riff raff out who are likely to steal my bike

Am I missing something here ?
dunno. jot down some figures on where you think the money goes. say for an average regional XC race – 300 riders, in a forest, no facilities on-site.

I don't know what the figures are, that's why I'm asking.
As a comparison (and from memory, so I may have got some of the details wrong);

SPAM Biking Winter Challenge.
£18 Entry fee.
Motorbike & 4×4 marshalls, Raynet, Red Cross ambulance, Lions Club & Timelaps all in attendance and presumably being paid.
Hire of the land from MOD, including sections that are not open at any other time.
Reasonably priced tea and cakes.
Free overnight camping.
Large donation to charity.

Kona Mash Up.
£30 entry fee.
A few marshalls, some of who packed up half way through meaning no timed runs on their sections.
Notoriously inaccurate timing system.
No first aid cover.
Another £2 to park.
Camping charges.
Takes place on a course that you can ride any time and is still open to non competitors on the day of the event.
Overpriced cafe.
Free Red Bull & bananas out on the course.
No donation to charity.

I agree that the mash up races are a rip off. In general I don't think anyones making a fortune from running races!

Heres some of our numbers
Marquee £1,750.00
Toilets/showers £940
Legal/Insurance £500.00
First Aid £412.85
Foresty Fee £375.00
Radios £125.00
Number boards £320
Security Bands £143.00

These are just the basics before we go into the nice things like goody bags!