Non-profit leaders and board members, this one is for you.
Several weeks ago I got a call from a distraught Director of Development telling me she was at her wits’ end with the board of directors and her non-profit’s CEO.
She said, “Jeff, I’m not sure what to do. My board and the CEO are insistent that we hold this annual gala, and it’s so much work. I’m embarrassed to say it nets only $100,000 on a gross of over $400,000! It gets worse – the board won’t allow me to reach out to the folks they invite to this event because they say that those are their friends, and they don’t want me (or anyone) to solicit them further.”
Let’s just think about this for a minute. Obviously, if the organization is only netting ¼ of the total gross of this event, this is really about making the event “a thing” for the board members. It’s definitely not about the mission.
Secondly, the role of the board in major gifts is to help evangelize their sphere of influence to join the mission of the organization. The board member does this because they love the mission. In this case, the board is about entertaining their friends first and putting on a good party.
Sadly, this is not a rare occurrence in our industry. Richard and I hear stories like hers all the time.
Together we talked for quite a bit about the “game” her board has been playing, which is popular among wealthy donors all over the place – and it often gets the blessing of non-profit leadership.
You know this game. A donor invites his friends and colleagues to an event by your organization where he’s on the board, and everyone “pays” to have a good time. Then those friends and colleagues do the same thing to your board members. The event attendees rarely, if ever, become real donors who are inspired by your mission.
Yet non-profit leadership thinks this is major gift fundraising. This is why they allow so much time to be devoted to these lavish events.
What gets lost in this game is all of the time spent by the non-profit’s development team and major gift officers, who are required to put on the event. It’s an enormous amount of work. For the Development Director that called me, she said she must devote essentially two full months of her year to concentrate on this one event that nets her only $100,000.
This is tragic.
She would love to give up this event, because she knows that if she spent real time developing relationships with the organization’s existing major donors, she could bring in so much more money than the net amount this event brings in each year.
Sadly, this Development Director is making the choice to leave this organization, an organization that is very dear to her heart, because she can no longer “go along” with “the game” the leadership wants to play.
I want to be very clear. If you are an Executive Director, CEO or Board Member of a non-profit, you need to know that fundraising events have nothing to do with major gift fundraising.
Major gift fundraising is about building relationships with donors. It’s about understanding a donor’s passions and interests, so that you can help them find joy in giving to your organization’s programs and projects that are changing the world. In that pursuit, gifts of money are a result.
Events are a tactic to help cultivate a donor, make her feel good about your organization, and hopefully bring in some cash (unlike the story above). It’s not, however major gifts work per se. So if you see your major gift team spending a ton of time working on events, you are not using them correctly.
Instead, they need to be out with donors, forming relationships, and working with program people to come up with great offers to inspire your major donors to do something amazing for (and with) your non-profit.
Don’t get sucked into “the game.” That is not fundraising. It’s something else that has very little to do with your mission.
As a non-profit leader, if you get this right, your organization has a chance to soar – and you’ll have donors who will find joy in supporting your mission. This is what major gift fundraising is all about.
Jeff
PS – We have lots more thoughts on Events and Major Gift Fundraising, including ways to best take advantage of events if you must do them. Click here for our free White Paper.
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Events Are NOT Major Gift Fundraising
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While I understand your distinction between event fundraising and major donor cultivation, let’s be careful not to marginalize the role of fundraising events. I’ve worked with organizations for whom their annual events are their major source of fundraising, and they are too small to be able to afford all the extra time that is required to invest in the one-on-one relationships key to major donors.
So again, I agree with this post. And I definitely agree that netting only 100k from 400k in gifts is atrocious and evidence of massively inefficient and overdone planning. I was part of an event that grossed nearly 80k, with less than 20k in expenses. 4:1, not 1:4. They’ve got it flipped backwards in that ratio.
But fundraising events are very often worth the time, especially because there is power in the group and the live event. It knits people to your cause and your people, allows them to meet people, see impact, and see a part of the world they might not otherwise see, and brings in a large cash infusion. And, it does also lead to new supporters. We’ve had people come to events, hear stories, get moved, become regular donors and volunteers, and then bring others next year.
Event fundraising works if it’s done right. But I agree, it’s not the same as major gifts planning.
There’s a chapter on event fundraising in my book – The Ultimate Fundraising Case Study. Very helpful for people looking for help in that area.
Hey Dan, thanks for adding to the conversation. This one quote of yours bothered me:I’ve worked with organizations for whom their annual events are their major source of fundraising, and they are too small to be able to afford all the extra time that is required to invest in the one-on-one relationships key to major donors.
What concerns me about what you said here is that your saying Major Gifts is too time consuming for smaller orgs. Richard and I would say Events are too time consuming for small organizations. You touted an event that made a 4:1 ROI. Two things: 1. That’s not that great. 2. I’m wondering if you factored in staff time? My guess is no. A healthy major gift portfolio should bring in an 8, 10:1 ROI or higher.
I”m not anti events. Events can be one tactic to cultivate a major donor, but if it sacrifices time an effort away from cultivate and stewarding a donor, then it’s actually hurting the non-profits bottom line. Major gifts if done well will bring in much more revenue at a higher ROI than any event. The problem is that for some organizations they use events as a crutch to actually NOT relate to donors. They don’t have to do the hard work of figuring out their donor’s passion and interests and matching to their programs and projects. If they did, they would ultimately be bringing in more revenue and have more engaged donors.
Understood – I guess the pushback is, being a small nonprofit, you really need word to spread, and one or two major donors don’t spread the word as well as an event with 200 people. I think they need both. If they stopped doing their event and nurtured the small handful of wealthy people who know about them, I think that would not be wise. The event is providing the foundation for operations and major donors is the next step (at this point they have one giving 5k – the second gift coming after I urged them to ask again this year.).
Again – I agree and like your post. Just wanted to argue for additional benefits of live events that can’t be replicated anywhere else. People talk about events. They get excited about them. Word of mouth happens, and they give something to invite new people to who would never find out about the org otherwise.
Many small nonprofits just don’t have any really wealthy supporters yet. So what are they supposed to do? Devote all their fundraising budgets to finding them at the expense of what they do have? In this particular case, the 5k person is the largest and only such donor. It’s easy to say they need more. It’s not easy to find the actual people.
Thanks for replying.
Couldn’t agree more. Well said.
It isn’t only major gift fundraisers. When I was a dedicated GRANT writer, I was pulled off task too many times to count — to pick up donated auction items, to tie goodie bags, to hostess at GOLF outings. And how many organizations have a plan in place for AFTER the event? For turning those ticket buyers into donors? I’ve seen many small organizations get on event treadmills where they are literally REELING from one event to the next. A recipe for burnout and exhaustion. And how often do we factor in the ENORMOUS amount of time that staff and volunteers put into events?
Yes, events can be a tactic. When you begin with the end in mind.
Events, like Major gifts, like estate planning, etc., are all ways people can engage and give to your organization. A healthy mix of revenue streams in any business is good business. How people organize their business and use their resources is another conversation all together. Great conversation starter, however, so much more underneath all of this, it’s certainly not a this or that conversation. There are as many orgs doing events in a non-strategic way, as their are ones doing majors gifts unsucessfully. If teams don’t know why they are doing any of it, it can all be a bust.