Special Events: Look Before You Leap

I travel from time to time to Chicago for mandatory meetings, which I enjoy attending because I can interact with a variety of colleagues. During a recent trip, I had dinner with several senior peers where we thoroughly discussed special events. I have not been responsible for a significant special event for several years, so I listened intently. I am always interested in building new fundraising pipelines.

One of my peers directs an event that grosses more than $500,000 a year. Another colleague directs an event that raises several hundred thousand dollars a year. They noted how much time and attention it takes to oversee their events each year. They stated that the bar for their events continues to be raised each year—never lowered.

When you think of special events in development terms, you typically think of an annual activity that has a purpose of generating revenue plus awareness for the organization. These special events can take many forms and sizes depending on the organization.

The largest college fundraising special events, via the Best Colleges:

1. THON, Penn State: Since 1973, the Nittany Lions have raised more than $89 million by having dancers commit to a brutal 46-hour consecutive boogying stretch to benefit child cancer patients. In the last year alone, $10.7 million was generated by this single event.
2. A Day for Southern, Georgia Southern University: More than 100 faculty, staff and students ask the town for contributions to support the university in the areas of scholarships, athletics, etc. In 2012, the event brought in $1.41 million.
3. Indiana University Dance Marathon, Indiana University: In 2012, the annual 36-hour dance marathon raised $2.1 million for Riley Hospital for Children. More than 2,000 students danced and 750 additional students worked year-round, which has raised more than $14 million for more than 25 years.
4. Fashion Show, Otis College of Art and Design: This Los Angeles school directs a fashion event displaying the works of its talented students. The latest show generated $1 million dollars in one day.
5. Northwestern University Dance Marathon, Northwestern University: This dance marathon involved 900 students who danced for 30 hours in front of 1,000 onlookers. Most the $1.1 million raised in 2012 was headed to the B+ Foundation to help families with children fighting cancer, while the remainder was directed to a local Evanston, Ill. charity.

While many charities do raise a great deal of money via special events, others struggle to generate a positive net revenue. According to Joanne Fritz, “it is not always about the money.” In a widely cited study by Charity Navigator, special events are not good sources of funds. Per the study, the average charity spends $1.33 to raise $1.00 in special event contributions.

Grassroots Fundraising Journal editor Stephanie Roth noted that it is crucial that fundraisers plan to accomplish other tasks through special events. Roth noted that special events can promote in-kind contributions, sponsorships, silent auctions, ad books, build relationships, publicity, volunteer experiences and board-member engagement.

In a Guidestar article titled “Challenges and Benefits of Nonprofit Event Fundraising,” authored by Courtney Cherico, special events “can bring in a lot of revenue for the organization, but can also put tremendous strain on a nonprofit’s resources.” She noted that the top 10 largest nonprofit fundraising events in the U.S. raised more than $138 million in 2013. She also indicated a big benefit is brand awareness and the sheer enjoyment an event can have on staff, volunteers and participants.

“One of the main challenges of putting on a fundraising event is the sheer effort and coordination that goes into the planning and execution.” — Cherico

She suggested that before attempting a special event, look at other best-of-class events, competition and startup resources to launch the event.

“When you factor in the direct costs of an event (food, venue, invites, entertainment) and indirect costs of an event (staff, board, volunteer time), you either break even (best case) or lose money (worst case). The error that many nonprofit leaders make is looking only at the gross revenue of an event as opposed to the net revenue,” — The Social Velocity

The article suggests that those who are planning to host a special event should do the math to see if there is a positive cost to raise a dollar, and if not, those events should be restructured or abandoned.

There are more than 1.5 million nonprofit organizations registered in the U.S. You can bet that most of these 501(c)(3) organizations have some type of special event or have thought about creating one. Make sure you look before your leap in special events. This activity is not for every nonprofit.