The True Cost of Fundraising Events

Something really unfortunate has happened. 

Despite learning some hard lessons about fundraising events when the COVID-19 pandemic happened, nonprofits have returned to their old patterns of over-prioritizing events and dragging frontline fundraisers into events work. 

Now, I want to be clear — I am not against events. Events can serve a valuable role in your organization for marketing and PR purposes. They can also be a great donor-acquisition tool and, if used properly, can be a powerful cultivation touch point for a major donor. 

But the role of events is significantly out of alignment in many organizations. Here’s what happens when your thinking and approach to events is not aligned with this fundraising vehicle’s true and intended purpose:

• There are silos between events and major donors that create competition and a these-are-my-donors mentality.
• The urgency of events gets prioritized over more meaningful donor strategy.
• Donors aren’t given opportunities to partner and give across different areas based on their passions and interests.
• Staff, who should be dedicated to working major donor strategies, get pulled into planning, managing and executing events.

It may not seem like this approach is having a negative impact on your fundraising efforts, but I’d bet that’s because you aren’t looking at the true cost of your events. 

Most organizations don’t evaluate the cost of their fundraising events in a way that takes the full cost into account. (I heard about one organization that doesn’t even track cost and only looks at gross revenue!)

When you look at the cost of your events, it’s important to get a comprehensive view. Here’s what that must include:

• Any costs related to the physical event (e.g. space, food, invitations, banners).
• All staff time dedicated to the event across your entire organization.

That last piece is critical — though most organizations don’t track this well or incorporate it into their results reporting on the success of an event. 

When you look at your event this way, you can get a more accurate net revenue number and see your event ROI. Most likely, your fundraising event ROI will be around 3-to-1, which is not bad. That’s roughly the same ROI as a direct mail program. 

But, when you consider that major gifts programs can have an ROI of 8-to-1, 10-to-1, 20-to-1 or even higher (and planned giving programs are similar), that puts the value of events into sharp perspective. 

And this is why I talk so much about not dragging your frontline fundraisers into events. There is no reason a major gifts officer should be busy with event teardowns when they could be meeting with a donor. 

That doesn’t mean that the event isn’t valuable. It means the best ROI for the organization is to have the major gifts officer focused on their caseload. 

Remember, every person in your organization has a cost attached to them. Now, I know that feels very impersonal, but hear me out. Your organization is paying for your time, expertise and effort. The most effective way you can support your mission is to focus each person on the highest return activities for their role. 

For a major gifts officer, that’s undoubtedly working with their caseload donors. 

So, the next time you start planning for an event, make sure you are accurately tracking all costs associated with it so you can see the true return for that investment. And before you pull in frontline fundraisers to help, consider the value of their time. 

If you do that, you’ll have a healthier investment approach for your events and allow your fundraisers to use events as a tool in their donor strategy. That’s how you maximize your efforts and keep everyone focused on making a meaningful impact on your mission.

The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.