Thread Director Amy Jo O'Hearn provides a framework for evaluating the effectiveness of using special events for fundraising
Thread Strategies kicks off every new partnership with a discovery phase in which we explore both the many ways the partner is currently fundraising and what areas it may already be considering for growth. Special events are always a major discussion topic, and for good reason. They’re a traditional staple of nonprofit fundraising. Our conversations range from formal galas to corporate-focused events to family-centered health fairs to endurance events… and everything in-between.
We love talking through the possibilities (and reality!) of successfully executing fundraising events. We have certainly seen many positive ways that hosting fundraising events can bring value to an organization. They provide an excellent opportunity to more deeply connect current donors and board members to the mission. An event can attract new revenue by leveraging volunteer committees that tap into their personal networks. They can bring your community together in one place to share and engage in your mission. Strategic use of events can offer the opportunity to identify consistent, repeat attendees to target for larger involvement in the organization beyond the event.
On the flip side, events come at a significant cost of both time and money. There are the obvious direct costs of the event logistics, such as venue charges, food and beverage, permits, security, AV equipment, etc. But if your team does not have a staff member specifically dedicated to special event fundraising, it is imperative to consider the indirect cost of the other staff members’ time, including at the executive level, required to plan and produce a fundraising event. What are these people not working on during the time they are focused on events, and could the work on hold actually have a stronger ROI?
Before deciding to host an event, create a budget for what it will cost, and include staff time. Whatever amount of time you initially estimate, double it. This is the element we most often see under-represented when projecting event costs. You will need staff members to communicate with the venue and all other vendors, adhere to all contract stipulations, manage guest RSVPs, track all payments and fundraising, recruit sponsors and manage their promised benefits, create seating plans, design a mission focused program with quality speakers, line up volunteers to staff the event (and manage them!)…. just to name a few tasks! With their many moving parts, events simply take a lot of time to produce.
Thread most often partners with small or mid-sized nonprofits where staff wear multiple hats and there is no dedicated event staff. In smaller organizations, there is always a tradeoff to fundraising via an event. For example, as a staff member becomes engrossed in event management, are they still stewarding your annual (non-event) donors and managing these valuable relationships? Studies have shown that 48% of donors who stop support for a nonprofit say it is because of poor communication or attention from the organization. Donors who make direct donations not tied to an event are more valuable, as there is not a hard cost of providing food/drinks/entertainment/etc. to that donor such as occurs at an event. It is important that an organization is not trading the more valuable donor relationship for the event-based one when capacity is stretched.
It may feel like we just burst your event-bubble. To be clear, we do agree there are strategic reasons to host a fundraising event. Our advice is to be sure that as your organization considers an event, you are asking yourselves critical questions to be sure that you are maximizing the opportunity an event provides.
To know if a fundraising event is a strategic choice for your organization, talk through the following questions as a team:
1. Why are we hosting this?
If the only answer is to raise money, an event will not be the most efficient way to do that! Events can meet many objectives for a nonprofit, and it’s important that the very first step of planning is to articulate what those objectives are so that throughout the planning process you can ensure you are designing and planning an event that is maximizing the time invested.
2. Is this what our supporters like?
Are you sure that what you are planning is an activity/event that your community will respond to and attend? Your board is a good place to start for surveying interest and gauging participation levels. If your key volunteers are not excited about the event, it may be hard to rally participants who are farther removed as well.
3. What makes this event different and appealing to the community?
If you are planning an event that is in a market already saturated by fundraising events, it will be important to think about what you can do to make it stand out from other similar and more-established fundraising events.
4. Within our staff, who has the capacity to spearhead this? How will we support her/him?
As discussed above, think not only about who will be on the team that leads the event, but what the tradeoff will be of those people not working on other fundraising strategies when the event planning takes over.
5. What will donor cultivation look like after the event?
This event should fit into a bigger picture of what fundraising looks like throughout the year for your organization. Thinking through how you will interact with the participants of the event throughout the rest of the year will help you maximize the opportunity an event can provide.
If these questions are not answered with resounding confidence and clarity, don’t add an event to your fundraising calendar. Consider other areas to improve fundraising or ways to meaningfully engage your supporters. Your bottom line and your staff will thank you.