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The Event Trap: Is Your Organization in It?

Events meet a basic organizational need to “do something” tangible and put a simple form of capitalism to work for a nonprofit, asserts consultant and board member Bill Hoffman. Have yours become the “default” fundraising activity, draining time and resources, but fall short of delivering a commensurate return?

It’s time to get out of the trap. Start your event planning with a thoughtful, honest assessment of potential value, and make it about more than just fundraising.

Are Events a Default Idea?

Nearly every non-profit has them…and often it seems like staff members move from planning, executing and recovering from one directly to the next one. I’ve been there, done that, and have way too many T-shirts (and hats, goodie bags, or other “tchotchkes”) to show for it. Of course, we’re talking about events. They seem to be the go-to for board members when it’s time to raise money for something.

Events have a certain tangible element that satisfies a need to be active at something which has a beginning and end, and also offers a simple form of capitalism at work for a nonprofit. There is very little philanthropy involved (i.e. true giving), as events are rooted in the concept of paying for something (that’s where the capitalism comes in). This is something that well-meaning board members, who may not be comfortable asking for philanthropic support, can get behind. It’s about getting sponsorships, selling tickets, obtaining auction items – that is, providing something for the money being asked for. In some cases events actually do bring in major dollars. But, more often than not, they are time, labor and resource-intensive and distract from the real work the development office should be doing: cultivating philanthropic donors.

Think Critically About the True Cost of Events

Make the attendees your raving fans because of a deep belief in your mission, not because they’re having fun at the event.

When an event is being pitched, it will invariably start with the comment, ‘well, the such-and-such organization announced they raised $150,000 at their gala last month.’
It always feels good and represents everyone’s hard work when we tout the money raised for an event. But let’s be clear, this is not the money left for the organization to use, it’s the gross revenues brought in from all sources. The net revenue to the organization is something much less—and is worth evaluating before jumping into doing that event. Let’s break down the numbers.

Gross Revenue = Total receipts from all sources (sponsorships, tables sold, tickets, auction proceeds, etc.)

Net Revenue = Gross Revenue minus Hard Costs (e.g. all costs paid for putting on the event)

Net/Net = Net Revenue minus Soft Costs (cost of staff time to put on the event, salary and benefits)

The Gross Revenue figure is normally presented – which is a wonderful public relations figure to advertise. Usually the organizing committee looks at the Net Revenue as well when evaluating the event. But often the Net/Net is overlooked. This cost calculation model recognizes that events are very labor-intensive and take a tremendous amount of staff time to prepare and execute a quality event.  Even with volunteer help, the staff is very involved.  Rarely is the staff time tracked or balanced against the event’s “net” to evaluate what the true “net/net” income of the event to the non-profit is. 

If You Must Do an Event…

All of the calculations given above discount what may be the most important factor–the lost opportunities for major gifts that could have been cultivated and obtained if all those volunteer and staff resources were directed towards true philanthropy. So if you’re going to do an event, make it about more than just fundraising.  Think of your event as a point of contact, or cultivation event, for major gifts that come from the philanthropic interests of your attendees. That is—be mindful of how you’re going to make the attendees your raving fans who want to support you because of a deep belief in your mission, not because they’re having fun at the event.  

To do that, you must go into the project with higher expectations than just having a wonderful event. During the initial planning you should be thinking of how you can:

Assure that you are collecting contact information from all attendees. That is, not just the individuals who bought the tickets or tables, but everyone who is at that table

Highlight some aspects of your nonprofit at the event. Be creative in making this interactive, not just a pitch or description from the stage. Have your attendees experience  something about your efforts that will whet their appetites.

While planning the event, include a follow-up with each attendee. If you wait for the event to be done to plan this, you’ll never catch up. The plan may start with a simple handwritten thank-you for attending, coupled with a testimonial about how the proceeds are helping your nonprofit.

Be persistent—but not intrusive—in your follow-up. Don’t expect to go from an introduction (at the event) to a major gift in 3 easy steps. Anticipate that you have started a cultivation process, during which the donor gets to know and trust you and your organization before they will commit to a gift. But always be thinking of that as your goal, as opposed to selling another ticket to next year’s event.

Keep these things in mind and if you must do an event, don’t get trapped into thinking that your highly touted proceeds are quite all they are advertised to be. But realize that you may have opened the door to some true philanthropic support for your efforts!

Bill Hoffman's firm provides services in:Strategic Plan Development & Implementation; Board Development & Training; Program Design & Management; Systems Development & Implementation; Executive Coaching & Leader Development; Interim Leadership; and Organizational Performance Audits. He also serves as a nonprofit board member on local, state, and national boards. Learn more about Bill.

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