Several months ago I was on a Skype call with a friend of mine who is a priest living in the mountains of Bolivia. He’s working with some of the poorest people in South America. He wanted my advice on how to raise $250,000 over the next five years to support the projects he’s working on.
Before I could get a word out he said, “Jeff, I’m thinking all we need to do is have one big event back in the States. I’ll invite everyone I know, have them invite their friends and I’ll make a pitch for the money. What do you think?”
To his dismay, I said, “I think that’s a terrible idea. Do you know how much time and work events are and, even more importantly, how much they cost?” He didn’t know what to say. He was so adamant that the only way to raise the money was to have an event, he wasn’t prepared to have me disagree with him.
At that moment, he didn’t look very happy on my computer screen.
Instead, I recommended he put together a case statement, come up with a list of potential donors, put a revenue goal next to their name and have me help him devise a strategy to get the money. He was skeptical. But, he heeded my advice and eventually came up with a case statement and list of names with revenue goals.
Then, I helped him with his “ask” strategy.
Within one month, by following the plan, he had commitments for the $250K. Oh, and about that event. We did have an event last week- a celebration event for raising all the money he needed for the campaign. He’s going to end up with well over the $250,000!
Had he gone ahead and tried to put on this event, he would have failed miserably.
Now, I realize this is just one story to highlight the fact that I dislike fundraising events and believe for the most part they are absolutely worthless for raising net revenue, but over the last several weeks I’ve become aware of organizations that are struggling with their event strategy.
In reviewing one of these organizations and their major gift caseloads I noticed that three years ago a number of donors had made significant gifts, yet in the subsequent years it was nearly zero. I asked what happened. “Well, we had a big event that year and a number of donors gave, but then that was it. We couldn’t get them to give again.” I asked how much net revenue the event brought in. Their eyes looked toward the floor. “Well, not much. It was pretty expensive,” they said. “And, a lot of our donors were pretty upset that we held such a fancy event.”
Another non-profit I had an opportunity to review has what I would call an event’s superstructure. I mean, the culture of their development department is essentially “all events, all the time.” They boast how the events team brings in about $6 million dollars a year in revenue.
So then I started digging a little more. “Of that $6 million, how much of that revenue comes from donors that are on a caseload? I mean, this is revenue you are going to get regardless of putting on an event or not. And, when you deduct that revenue from caseload donors how much NET revenue do you actually end up with?” The answer was embarrassingly little.
Actually, when I spoke with a few of the MGOs, they were complaining that some of their donors who they were cultivating for large six-figure gifts actually gave LESS because they happened to sponsor a $20,000 table at an event instead. They were really frustrated.
Yet there continues to be the belief from upper management that “if we didn’t have all of these events we wouldn’t be able to raise so much money.”
Look, I’m not down on all events, but they should be limited and they should never be a replacement for developing relationships with donors. Richard and I have written about the pitfalls of events many times, but we keep writing about them because we see too many non-profits distracted with them with very little payoff.
Richard and I have seen way too many MGOs get sucked into the events black hole never to be seen again. If I had a nickel for every MGO who said they didn’t make their goal because they had to coordinate some event…I’d be lying on a beach in Hawaii right now and every day.
If you are the head of a non-profit, we urge you to move away from using events to raise money. If you’re an MGO who continually gets “asked” to help with an event, do everything you can to convince your boss it’s a bad idea. And, if you are a development director of a small non-profit, you have to realize that the best way to raise major gifts is to build relationships with donors and ask them directly to support your mission.
Don’t hide behind the false wall of an event. Knock that wall down, create a solid list of qualified donors, find out their passions and desires, match them up with your great programs and ASK them to fund it. And, guess what? They will!!
While I agree that fundraising events should not be the main development strategy in a non-profit, they are a very valuable tool if used correctly. I personally think events get a bad rap from others in the development, but they continue to be a great asset to non-profits. If used correctly events can:
1.) Bring in new donors that you can cultivate for Annual and Major Gifts.
2.) Bring awareness to large group about your programs and services.
3.) Show current and prospective donors ways that supporting the organization can make a huge impact.
4.) Provide a way to celebrate with some of your key donors.
5.) If sticking to a tight budget can also provide a tremendous amount of revenue. The goal I try to adhere to is the expense budget should not exceed 25% of your gross raised.
I think the key needs to be that events many times open the doors to deeper relationships and conversations. After every event we do, we look at who attended, who we don’t know and determine ways to reach out them. Our events start community conversations. We meet with these attendees in groups and individually. We send them letters after the event celebrating our success and sharing with them more about how their support have made an impact.
Events should not be your main revenue source but they can vital to your organization if used as a way to engage and cultivate friends of your organization.