When Good Events Go Bad

In his book, “Guide to Special Events FundRaising,” fundraising professional Ken Wyman discusses a “disaster that has now passed into fundraising legend,” where a Boston nonprofit wound up $50,000 in the red when it secured reggae legend Bob Marley to play at a benefit. Unexpected travel, accommodation and equipment-rental costs ate — big time — into whatever funds that were raised.

Wyman writes: “It is no surprise that non profit groups sometimes lose money on events despite countless hours of hard work by many volunteers. The surprise is how often they succeed.”

High costs, low ticket prices, poor ticket sales and unrealistic expectations are among the top reasons special events fail, Wyman says. Here, in an except from “Guide to Special Events FundRaising,” he examines what he has defined as the most overlooked problems in special-events fundraising:

1. FRONT MONEY IS NEEDED TO PAY BILLS BEFORE REVENUE COMES IN. Many groups do not have a source of capital to bankroll the investment phase. If they use operating funds, a loss — or even a delay in payments — can interfere with programs. Some board members will advance personal funds or co-sign a loan. Although this can be risky, it is often the only solution.

2. UNDERBIDDING CUTS INCOME BY SETTING PRICES BELOW WHAT A DONOR MIGHT GIVE. Frequently, organizations decide the price by the lowest common denominator. The nonprofit doesn’t want to exclude any supporters who can’t afford high prices. As a result, a fundraising event turns into a community party that just breaks even — or worse, loses money.

Even when prices are higher, there are always some people who would give you as much or more as a pure donation, if you asked properly. Whether you offer a ticket for $15 or for $150, few people will offer to give more than the ticket price. Yet some of them can afford $25 or $250. They might give that much, if you asked. It’s often your organizational goals they care about, not the event itself.