Fundraising Events Are The Best Way to Raise Support … NOT!!!

I‘ve got another fundraising event tonight!” a nonprofit leader exhaled with an attitude of exasperation. Anyone who has worked or heavily volunteered in the nonprofit sector can relate to this attitude. Given the number of nonprofits that operate in most communities one can probably attend a nonprofit fundraising event 365 days of the year! Yet most fundraising events actually net very little net return when compared to other forms of fundraising (annual fund, major gifts, direct mail, planned giving, grants). Which makes us ask why are so many nonprofits are on the event treadmill? The answer is really quite simple. More often than not nonprofits hold events to fulfill the relational return nonprofit’s and their stakeholder community need to affirm their purpose. They serve as social, relational moments that broadcast and highlight a nonprofit’s reason to be. However planned alone, and in isolation from an overall development plan, events can be very inefficient practices in fundraising. Many nonprofit leaders will confess they would celebrate the day when their organization had no fundraising events on the calendar. But most nonprofits have tied their program year to events and find it hard to let go of events. Even those events which actually operate at a loss.

Events can serve a higher goal. The key is for events to fit-in with and serve the overall development purpose. Let’s put this in context. The purpose of development is to establish value-driven relationships between an organization, its donors and recipients of its service. This is measured monetarily in a number of ways but most importantly by the impact dollars raised has on program outcomes.  Results are also measured by the return on dollars raised compared to the costs required in any specific development activity (direct mail, annual giving, major gifts, events, etc … ). Events, unrelated from all the other fundraising activities, provide very minimal financial return. Indeed, given the costly nature of most events in terms of actual dollars and staff/volunteer resources expended, to hold an event that is not integrated into the overall development program can be wasteful. Unless you perceive the event as marketing. If so, it should be measured with appropriate metrics used to determine the efficacy of marketing efforts.

So how do you value events in the development program? First, by placing the event in the appropriate steps of the development cycle. This classic cycle is identification, qualification, cultivation, solicitation, and stewardship. All events and their costs should be weighted against each of these steps. Are you holding the event to identify and acquire new donors? Are you using the event to cultivate future donors? Are you holding the event to thank and show appreciation to existing donors? Are you doing all three? If so, then the organization needs to be measuring these objectives to determine an event’s effectiveness. However, short of an organization whose development program is totally centralized or scalable around events such as performing arts organizations, events are costly and provide limited return compared to  most other fundraising activities.

So the next time your nonprofit Board proposes an event you should ask how does this fit into the development program’s major steps and key activities? How will you measure its effectiveness beyond the net dollars raised? Bottom line: what is the objective of the event? Additionally, what are the opportunity costs? Meaning is there better use of our staff and volunteer resources in achieving our mission than this event?

Events, if done properly can be useful in furthering the mission of the nonprofit. If not they become an “I’ve got to attend another fundraising event!” moment. Costly, with little impact on mission.