Events are an important part of any diversified fundraising program. They present an opportunity for people to come out and publicly support a cause they are passionate about, offer a great opportunity to thank and steward donors and prospective donors. When executed well, events can also play a significant role in raising the profile and awareness of your cause.
But events can be a black hole as well. Often, they’re classified as fundraising initiatives rather than awareness-building initiatives. However, they very rarely raise much in terms of net revenue.
While your events should bring in a profit, it’s important to note that event-based fundraising can be the most expensive form when looking at cost-per-dollar raised. According to James Greenfield, it typically costs $0.50 to raise $1.00 through an event. In my experience, that’s being generous.
What many organizations don’t factor in to their expenses are staff and volunteer time. Why include those? Include them because that’s time that could be spent on other forms of fundraising; those with a higher return on investment (like major gifts, for example).
Volunteers often love special events. They feel safe and easy, and aren’t the more direct and personal fundraising that often scares volunteers. To be honest, they often feel safe and easy to fundraising staff as well. In fact, when I’m called in to do an audit of a fundraising program, particularly in smaller shops, I’ll more often than not find that the staff spends virtually all their time organizing events, leaving little time for other forms of fundraising. I’m at the point where I can analyze the problems in an organizations fundraising program just by asking, “How many events do you organize each year?”
In fact, to be really honest, when I’m hiring fundraising staff or fundraising consultants, and I see a big focus on special events, that’s usually a red flag for me. In my experience, those folks can be using special events as a bit of crutch to avoid the “scary” world of major gifts and planned giving.
Analyze the effectiveness of your special events
What I typically do during a fundraising audit is a cost benefit analysis of all the events, and I suggest that every organization do the same. Here’s how to do it. Create a spreadsheet and list all of your revenue from a particular event. This might include:
- Ticket sales
- Silent auction or live auction bids
- Donations received during the event
Then list all of your expenses (and I mean ALL of your expenses):
- Venue rental
- Speaker fees
- Staff time (get each staff person involved in the event to estimate their hours, then multiply the hours by their hourly wage)
- Volunteer time (do as above, but use minimum wage)
Now calculate your net revenue. I’m guessing that it might not be as much as you thought, now that you’re including staff and volunteer time.
Do this exercise with all your events, and then consider eliminating those with the lowest return on investment. Keep those events that either have a high return, or where the primary purpose is awareness-building or donor engagement.
By cutting down on events, you’ll free time up for major gifts, planned giving, and other fundraising tactics that are more efficient.
This post was written by Leah Eustace, ACFRE, former Principal and Chief Idea Goddess at Good Works.