Several months ago I was on a Skype call with a friend of mine who is a priest living in the mountains of Bolivia. He’s working with some of the poorest people in South America. He wanted my advice on how to raise $250,000 over the next five years to support the projects he’s working on.
Before I could get a word out he said, “Jeff, I’m thinking all we need to do is have one big event back in the States. I’ll invite everyone I know, have them invite their friends and I’ll make a pitch for the money. What do you think?”
To his dismay, I said, “I think that’s a terrible idea. Do you know how much time and work events are and, even more importantly, how much they cost?” He didn’t know what to say. He was so adamant that the only way to raise the money was to have an event, he wasn’t prepared to have me disagree with him.
At that moment, he didn’t look very happy on my computer screen.
Instead, I recommended he put together a case statement, come up with a list of potential donors, put a revenue goal next to their name and have me help him devise a strategy to get the money. He was skeptical. But, he heeded my advice and eventually came up with a case statement and list of names with revenue goals.
Then, I helped him with his “ask” strategy.
Within one month, by following the plan, he had commitments for the $250K. Oh, and about that event. We did have an event last week- a celebration event for raising all the money he needed for the campaign. He’s going to end up with well over the $250,000!
Had he gone ahead and tried to put on this event, he would have failed miserably.
Now, I realize this is just one story to highlight the fact that I dislike fundraising events and believe for the most part they are absolutely worthless for raising net revenue, but over the last several weeks I’ve become aware of organizations that are struggling with their event strategy.
In reviewing one of these organizations and their major gift caseloads I noticed that three years ago a number of donors had made significant gifts, yet in the subsequent years it was nearly zero. I asked what happened. “Well, we had a big event that year and a number of donors gave, but then that was it. We couldn’t get them to give again.” I asked how much net revenue the event brought in. Their eyes looked toward the floor. “Well, not much. It was pretty expensive,” they said. “And, a lot of our donors were pretty upset that we held such a fancy event.”
Another non-profit I had an opportunity to review has what I would call an event’s superstructure. I mean, the culture of their development department is essentially “all events, all the time.” They boast how the events team brings in about $6 million dollars a year in revenue.
So then I started digging a little more. “Of that $6 million, how much of that revenue comes from donors that are on a caseload? I mean, this is revenue you are going to get regardless of putting on an event or not. And, when you deduct that revenue from caseload donors how much NET revenue do you actually end up with?” The answer was embarrassingly little.
Actually, when I spoke with a few of the MGOs, they were complaining that some of their donors who they were cultivating for large six-figure gifts actually gave LESS because they happened to sponsor a $20,000 table at an event instead. They were really frustrated.
Yet there continues to be the belief from upper management that “if we didn’t have all of these events we wouldn’t be able to raise so much money.”
Baloney.
Look, I’m not down on all events, but they should be limited and they should never be a replacement for developing relationships with donors. Richard and I have written about the pitfalls of events many times, but we keep writing about them because we see too many non-profits distracted with them with very little payoff.
Richard and I have seen way too many MGOs get sucked into the events black hole never to be seen again. If I had a nickel for every MGO who said they didn’t make their goal because they had to coordinate some event…I’d be lying on a beach in Hawaii right now.
If you are the head of a non-profit, we urge you to move away from using events to raise money. If you’re an MGO who continually gets “asked” to help with an event, do everything you can to convince your boss it’s a bad idea. And, if you are a development director of a small non-profit, you have to realize that the best way to raise major gifts is to build relationships with donors and ask them directly to support your mission.
Don’t hide behind the false wall of an event. Knock that wall down, create a solid list of qualified donors, find out their passions and desires, match them up with your great programs and ASK them to fund it. And, guess what? They will!!
Jeff
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Jeff and Richard
Passionate Giving 
While your advice is sound, it neglects to mention the fact that event fundraising is rooted in enhancing a direct connection with the cause that can’t be replicated through other forms of fundraising. Done correctly, this event experience is an unmatched way to allow donors and constituents to see, feel, and interact with an organization and its cause. I’ll admit I’m a little biased–since 2006, our clients have raised at least $50 million in NET revenue from event fundraising through a median gift of about $30. And on average, 90% of the participants and donors acquired from these events were new to the organization. Food for thought…
Jono, I agree that with an EFFECTIVE Event some really good money and connection to the cause can happen. The problem with development departments is that they usually divert attention away from major gift officers to put these events on. That turns into a disaster because they think they are going to bring in all kinds of new donors and bring in a ton of money. What usually happens in our experience is that they neglect their caseload, lose a bunch of money through donor attrition, and while they may raise some net at the event, it’s doesn’t’ replace the money they lost with current donors. Also in our experience, new event donors are tough to get a second gift from. However, if you successful at events and they make great net revenue and bring in quality new donors, then we should talk because we have many clients whose event strategy is terrible and could use your help.
I agree wholeheartedly about the diversion from case load. But I’ve also seen organizations where 80% of their revenue comes from major donors that could benefit from the revenue and age diversification that comes from events. And yes, the second gift is very tough–in part because fundraisers often employ the same strategy to get a second gift from event donors that they do from annual donors. Needless to say, event donors have a very different affinity than organizational donors. We wrote a white paper on this topic last year (http://www.event360.com/event-donors). Shoot me an email at jsmith [at] event360 [dot] com if you want to chat further.