Fundraising Events: Are They Worth It?
A while back I was on a Skype call from a friend of mine who is a priest living in the plateaus of Bolivia. He's working with some of the poorest people in South America. He wanted my advice on how he could 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 in the U.S. 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 idea is terrible. 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 do 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 revenue goals next to their names and I would 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 the other week, a celebration event for raising the all the money he needed for the campaign. He's going to end up with well over the $250,000 he needed!
Had he went ahead and tried to put on this event, he would have failed miserably.
Now, I realize this is just one little story to highlight the fact that I dislike fundraising events and feel for the most part they are absolutely worthless for raising net revenue, but over the last several weeks I've been confronted by organizations that are struggling with their event strategies.
For one of these organizations, I was reviewing its major-gifts caseloads and noticed that three years ago a number of donors had made significant gifts yet in the subsequent years their total was nearly zero. I asked what happened.
"Well, we had a big event that year and a number 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. And a lot of our donors were pretty mad that we held such a fancy event."
Then, there is this other organization I was talking with that has what I would call an events superstructure. The culture of its development department is essentially "all events, all the time." It boasts how the events team brings in about $6 million 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 talked to a few of the major-gifts officers (MGOs), they were complaining that some of their donors who they were cultivating for large six-figure gifts gave less because they happened to sponsor a $20,000 table 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 a relationship with a donor. Richard and I have written about the pitfalls of events many times, but we keep writing about it because we see too many nonprofits distracted with them with very little payoff.
Richard and I have seen way too many MGOs get sucked in to the events black hole never to be seen again. If I had a nickel for every MGO who said she didn't make her goal because she had to coordinate some event ... I'd be sipping mojitos all day long in San Juan.
If you are the head of a nonprofit, 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 nonprofit, you have to realize 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 that up with your great programs, and ask them to fund it. And guess what? They will!
If you like baseball, tennis, golf, Gregorian chant, jazz, rock, good wine and deep conversation, then you’ll like to hang out with Jeff.
If you are passionate about fundraising, Jeff will inspire you to be a true “broker of love” for your donors, helping you bring together a donor’s desire to change the world and the world’s greatest needs. Jeff believes that if nonprofits truly want to grow and obtain more net revenue for their mission, it will come through creating, building and successfully managing major-gift programs. The Connections blog will give you inspiration and practical advice to help you succeed. Jeff has more than 25 years of nonprofit fundraising experience and is senior partner of the Veritus Group.