It’s almost the end of the year. How did your agency’s fundraising events fare? Did your events spread your organization’s mission, or did the events just raise funds? Did you raise a lot of money? Really? At what cost, effort included? What kind of impact did the event make? Was the community galvanized to spread your agency’s message? Yes? No? In terms of mission fulfillment, net income, and community impact, how did your events really fare?
The Importance of Designing and Implementing Mission-Related Nonprofit Fundraising Events
As we discussed in Successful Nonprofit Fundraising: It’s Not About the Money, mission, not money, motivates. People are motivated to give because your mission, not your need for money. Yes, they might attend an event because they’ve been asked in a quid pro quo relationship to attend, that is, you come to my event I’ll go to yours. But you don’t get dedicated, engaged donors out of quid pro quo interactions. Research shows that attendees of fundraising events generally do not convert to repeat donors. Why should they? If attendees are at your event because they feel obligated, you’ve just gone through a lot of time and effort to get a one-time donation. That’s an expensive way to raise a one-time donation.
You raise money to fulfill mission. Invite guests who are interested in solving the community issue you address and design the event with mission fulfillment in mind. Then, it will be easy for your agency ambassadors to follow up with attendees on how they can become more involved with your organization. The conversation with potential repeat donors will not be about money, the conversation will about mission. It is awkward to talk about money. So don’t do it. Instead, let your ambassadors talk about why they are involved with your agency in the first place – because they feel good about contributing to your organization’s mission, about being part of something successful bigger than themselves. Make it easy for your ambassadors to talk with passion about your mission. You will realize better long-term fundraising results. It is mission that motivates.
And don’t chase the money. Once you start chasing money, mission drift starts to occur. Mission drift, focusing on activities other than your mission, is a dangerous thing. And it generally occurs slowly. Does this event that you’re planning have anything to do with mission fulfillment? If it doesn’t, don’t do it. Err on the side of caution. Don’t be tempted by the lure of easy money. The costs are too high. Once mission drift starts, you begin to lose community support. The gain of a dollar today is not worth the lack of community support tomorrow. It’s a matter of short-term versus long-term gain. Both must be accounted for when evaluating the success of your events.
So, you’ve evaluated them and your events are mission-infused. Now, do they actually make money?
Evaluating Income Generated through Successful Nonprofit Fundraising Events
Your amount of gross income is one way to measure your success. Gross income is the way I hear fundraisers most often describe the success of their events. For example, our gala raised $100,000.
Gross income means nothing though. As we saw in Developing a Nonprofit Fundraising Strategy that Optimizes Fundraising Performance, it is net income that counts when determining successful fundraising performance. If you raised $100,000 in gross revenues but it took $125,000 to raise it, you just lost money. The lure is, and why so many boards and executive directors are prone to think fundraising events raise a lot of money, is they think in terms of gross rather than net income.
Event net income equals gross revenues minus direct event expenses. If you are in line with the average industry return, your event expenses should be no more than half of your gross revenue. In other words, if you raised $100,000 through your events, your event costs should be no more than $50,000. Accounting for direct event expenses, you much money did you make now?
But it’s not enough to stop there. To know if you really made money on an event, you need to account for total, not only direct event costs. What happens to your net income when you add labor costs and allocate a portion of your general and administrative expenses?
Are you breaking even? Great if your objectives for the event were things other than making money – like community goodwill, community visibility or strengthening of strategic partnerships. Which are noble purposes for events. One of the outcomes of good events is community awareness and mobilization. In that case, a break-even budget is okay. You’ve accomplished what you wanted and you haven’t lost money. These are often friend-raising, as opposed for fundraising, events. If you implemented a friend-raising event and broke even, good job.
Did you lose money when you accounted for the labor and overhead costs involved in holding your fundraising events? If you’re like most nonprofit organizations, you lost money. Is that something you can afford? If you don’t want to lose money, the event isn’t worth doing again unless you make some changes so that it at least breaks even.
Evaluating Impact When Assessing Nonprofit Fundraising Event Performance
In addition to evaluating mission fulfillment and net income, you can measure the success of your events in terms of impact. What kind of impact did your events make? How much of a lasting community awareness did your event make? Did your events strengthen strategic partnerships or build strategic relationships? Do participants look forward to the events? Do guests have a good time? Will they come again? What about event organizers? How much do they look forward to the event? Do you lose volunteers or drain staff by putting on this event? What are negative experiences going to do to your agency’s ambassadors’ ability to communicate positive, passionate messages about your organization? What was the impact of your events?
Accounting for Opportunity Costs When Evaluating Nonprofit Fundraising Event Performance
Finally, you need to look at your opportunity costs associated with implementing the events, that is, the costs you incurred by not doing something else. Did your events prevent you from doing other things that would bring you a greater return on your efforts? It costs about $0.50, not counting labor and overhead, to raise a dollar through fundraising events. Are there other fundraising vehicles that will bring you greater returns on your dollar, be more mission-infused and create a bigger impact? It’s worth evaluating as part of your overall fundraising event performance.
Putting It All Together
Analyzing the success of your nonprofit fundraising events includes evaluating your events in terms of the amount of mission focus, positive net income and community awareness and mobilization the event achieves. The chart below suggests efforts you can take depending on how successful your events is in terms of mission, income and impact.
And you do this because…?
| You’ve spent money to drift from your mission and everyone one |
doesn’t know what you do – reinvent the event.
|Low Mission |
|You’ve made money but watch out! You’re in danger of mission |
drift and losing credibility in the community. Add mission.
| Low Mission |
|You’ve accomplished financial and impact goals but no one knows |
why – add mission and watch for mission drift.
|High Mission |
|You’re getting there – you’ve just spent money on fulfilling mission. Cut costs to increase income and let people know about your mission by adding impact to the event.|
|High Mission |
|You’re almost there – fulfilling your mission and increasing community support. Now cut costs to realize higher income.|
|High Mission |
|You’ve accomplished fulfilling and raising money for your mission. All you need to do to be perfect is add impact.|
| High Mission |
High Income High Impact
Congratulations – you’re the envy of every fundraiser! You’ve got a winner!!!!