Fundraising Events: a losing proposition for your nonprofit organization?

There is nothing so useless as doing efficiently that which should not be done at all. - Peter Drucker

Say the word “fundraising” to anyone unfamiliar with the field and what’s the first thing to come to mind? You guessed it – events. Everyone seems to buy into that old Andy Hardy mantra of “let’s put on a show!” and many people view events as the be-all, end-all of fundraising.

Well I’m here to tell you a little story. Bear with me and I’ll tell you how my experience relates to events…

It happened several years ago. I was working with a small organization as their part-time development director when I came up with the idea to sell donated goods on eBay to raise money. Their board agreed to give it a try, we publicized it in the newsletter and I began hauling donated items home in my car every week to photograph and list.

Selling on eBay is much more time-consuming than you might imagine – from researching the items, writing up the listing, designing the HTML for our page, taking countless photographs of the goods and, lastly, packaging, addressing and shipping – especially when you’re doing it all yourself. At the end of three months we had raised slightly over $8,000 for the organization – after PayPal fees – and the organization was pleased with the outcome.

I, however, was not. When I factored in the amount of time that I had lost – time that would have been better spent writing grant proposals, researching foundations or calling donors – I realized that selling on eBay was a losing proposition.

Why am I telling you this?

My story illustrates two points:

  1. I was blessed with a wonderful board, a board that supported my idea wholeheartedly. More boards should give their development staff the freedom to do their jobs – even at the risk of sometimes failing.
  2. My eBay selling experience was very similar to many smaller nonprofit organizations’ experiences with events. My friend, Jen, who works for a moderately large nonprofit in New Jersey that shall remain nameless, refers to events as “crack.” For many small organizations they are addictive, despite the often relatively low return on investment.

Oh sure, events can and do raise money. Yet it’s rare that event ROI analysis methods factor in the enormous – and I do mean enormous – amount of time devoted by staff to the planning of events.

You know exactly what I’m talking about.

As an example, I once worked as a grant writer for an organization where I was repeatedly called off task to tie goodie bags, pick up donated goods for events, hostess at golf outings – you name it. Do I need to tell you that my grant-writing efforts brought in 70% more money than the events?

You probably have your own event horror stories. Unless your organization already has a prominent signature event, or a committed bunch of talented volunteers willing to do the grunt work for you, events are generally a losing proposition.

I liked how Norm Olshansky, in his article “Fundraising Return on Investment”describes the purpose of events: “This may seem like blasphemy to some, but events should primarily be utilized to attract new donors, cultivate existing donors and volunteers, say thank you to your donors, volunteers and staff, or to provide community education.”

It’s been my experience that the smaller nonprofit is much better off focusing on “Benevon” style events. Benevon is the organization formerly known as Raising More Money. Their program focuses solely on growing an organization’s individual giving and a major component is the small, informal cocktail party or gathering at board members homes designed for the sole purpose of introducing friends and neighbors to your mission in an informal, engaging manner. These events require minimal staff involvement and result in greater long-term gain.

You’ve got limited time, money and resources. And I’m all about Simple Development Systems, which means building your donor base – and, eventually major gifts – in a systematized way. As Tony Robbins always says, “don’t focus on activity – focus on results!”




21 Responses to “Fundraising Events: a losing proposition for your nonprofit organization?”

  1. Gail Perry says:

    Pamela, funny we are thinking alike! My post this week was on “Why You Should Ditch Your Next Event.” : ) http://www.gailperry.com/2011/05/why-you-should-ditch-your-next-event/

    I could not agree with you more here. There has got to be an easier to way (and more efficient and more productive) to raise money – and there is!

  2. Brian Saber says:

    Amen! I’ve always thought fundraising events are “loss leaders,” – like milk in a supermarket. I’d rather visit with each event attendee individually then have to manage all their expectations in one room at one time. So costly and no way to maximize the cultivation opportunity with so many people at once. As Cause Effective points out, if you don’t consider special events within the full spectrum of cultivation opportunities throughout the year, don’t bother doing them!

  3. Betsy Baker says:

    As a grant writer, I couldn’t agree with your assessment more! For some reason, nonprofits seem to be brainwashed by the allure of events. They seem to not realize that they cost money up-front, pull all staff away from their duties and often don’t bring nearly the amount of money that grants do. I too have been instrumental in planning events and can say with experience that grant writing is a much more economical and time-saving way to raise money.

  4. Rachel says:

    Hhmmm, I’m of a different mind here. I think that fundraising events have value, but not necessarily for raising funds right at that moment.

    I’ve always viewed events as an excellent opportunity to create awareness and cultivate relationships. Done right, an event can educate and bring real program success stories into play. This can only help an organization’s overall fundraising plan.

  5. Esther says:

    As a grant writer, I always enjoy the occassional chance to pitch in to help other members of the development team with special events — doing coat check at the Gala, tending bar at the golf outing. I enjoy getting out from behind the desk and meeting some of an organization’s supporters. But, I can’t help but notice how much time gets sucked into special events and how they seem to take on a life of their own and justify themselves — they become almost like another program that the nonprofit has to support. If organizations calculated staff time as a special event expense, I doubt they’d even break even. And compared to the intimacy of a house party where people really come to listen and learn about a nonprofit, a gala dinner or golf outing can be chaotic and distracting and not a good way to develop better “friends” of the organization. So I agree with you! But I still enjoy getting out from behind my desk to help with special events! It’s a fun break from the perhaps more practical work of grantwriting!

  6. Pamela Grow says:

    I had to smile when I read your comment, Esther. I well recall those days too and, yes, I did enjoy getting out from behind the desk to work on events!

  7. Hi Pamela – I couldn’t agree more! The 1st thought that occurs to non-fundraisers – and the Board in particular – is ‘let’s have an event’! I’ve lost track of the times that I’ve advised against it, pulled out stats on ROI for events versus other types of fundraising – and lost! However, there is also a place for events – as long as charities realise they aren’t going to bring in much money.

  8. [...] From Pamela Grow’s Grantwriting Blog: Why fundraising events may not be the best idea for you [...]

  9. Oh the eternal events debate. Agree with you in that time and energy are almost never factored in to the return on events and if you do the results look even more meager. The flip side is that other outcomes like new donors, brand awareness and education are also not factored in and if you do the results looke even better.

    Events can play a huge role, when done properly, to kickstart an organization and its fundraising engine. They don’t have to be the negative ROI, energy drains we always make them out to be.

  10. I was going to write simply “AMEN”, but someone beat me to it!

    I’m a big believer in putting limited energy into grants and individual giving activities. Events have to be thought of as community builders, not necessarily fundraising activities.

    Thank you for writing this!

    Christina

  11. Pamela Grow says:

    The longer I’m involved with nonprofit fundraising the more I find myself answering questions with “it depends.” Clearly there are exceptions to every rule. And I’ve certainly had much more than my fair share of negative experiences with events. Typically I like to use events to build community and raise friends – utilizing willing volunteers and board members to plan them. Thanks so much for commenting Christina.

  12. Sarah (@SAPL) says:

    I know for our small organization events are time consuming, but is a two for one deal with creating awareness of the programs and services, research that we offer and fund. Thousand people come out for an event, how many to a public speech about the organization?

    I think you need to re-evaluate your event if it doesn’t correlate to your mission. Don’t hold an event for the sake of holding an event.

  13. Renee Zau says:

    I, too, was frustrated with the manual work involved with event donation procurement and preparation, especially knowing that nonprofits were wasting time doing the same data entry and soliciting many of the same in-kind donor businesses. That’s exactly why I created DonationMatch.

    There are many beneficial and positive experiences donors can only get from events, I’d rather find ways to do them more easily than “throw the baby out with the bath water.” New software and technology are being developed to alleviate the difficulties, and I look forward to saving time and effort behind the scenes, letting us enjoy the parties for the fun they’re supposed to be for everyone, including the organizers.

  14. As indicated by Pamela, there can be tremendous benefits derived from events. The problem is that too much emphasis is given to the amount raised and not the ROI. I recently observed an event that raised $125,000 but when you factored in the 6 months of planning, staff time, volunteer time, etc., it ended up costing more than it raised. Without the overhead and staff time. the event cost 50 cents for every dollar raised. Check out the ROI on major gift fundraising, or planned giving by comparison. See article at http://nfpconsulting.blogspot.com/2009/08/fundraising-return-on-investment.html

    I concur with those who have already responded. However, keep in mind that some organizations need to have “social” fundraising events to engage volunteers, educate potential supporters, thank donors and be part of the “social scene” in their commuity. The main focus of this discussion should be how many, how often and what type of events are best for an organation that will help it accomplish its mission while being responsbible regarding expenditures of financial and human resources.

  15. Made a big connection with your “it depends” comment Pamela. These two simple words seem to be increasingly used and perhaps are increasingly important.

    Some might argue that “it depends” is akin to fence sitting, but really, shouldn’t “it depend”? NFP’s are rapidly becoming more sophisticated and complex. Each organization has its own culture and nuance.

    Perhaps saying “it depends” is one of the savviest things we can do. Could it mean that we understand that we are all unique– different organizations that need different strategies and tactics, at different times?

  16. [...] If there are no events for you to keep up with, consider yourself blessed. [...]

  17. Pamela Grow says:

    Thanks for commenting Donna. I work with and write for primarily small nonprofit organizations, usually with one lone development director or an ED who is also doing the fundraising. So I come from that perspective. When I have worked with larger organizations, I’ve seen the amount of time taken away from other staff members to assist with the minutiae that goes into event planning. At one organization I worked for briefly as a grant writer, and part of a three-member development team, it seemed that I spent more time tying goodie bags, making phone calls, writing corporate sponsorship letters, etc., than actually writing grant proposals! Yet I’ve also worked with organizations with phenomenal volunteers who organized and ran every detail of an event. So, yep, “it depends!”

  18. [...] Pamela Grow said, “Unless your organization already has a prominent signature event, or a committed bunch of [...]

  19. [...] Pamela Grow said, “Unless your organization already has a prominent signature event, or a committed bunch of [...]

  20. An interesting discussion is price comment. I think that you should write more on this topic, it might not be a taboo subject however usually individuals are not enough to talk on such topics. To the next. Cheers