Written By: Danny
By Danny Maier
In Part I of this series, we discussed the hazards of being in the “special events business” versus true fundraising. If you recognized your organization in that post, your next question is probably: “How do we become an organization more focused on major gifts?” The answer is all about culture change.
Weaning your organization off special events may stir up some resistance in you, your staff or your volunteers. Events can be a big part of an organization’s traditions and history. Creating a change in culture isn’t easy, but with just three steps you can replace those spaghetti dinners with a robust major gifts effort.
Want to learn what those three steps are?
Step One – Account for staff and volunteers
Take one or two of your special events. Look at what they raised in gross dollars. Now deduct all the costs for that special event. Then, deduct the expense of $15 per hour of time for all volunteer and staff time. Be realistic. Don’t low-ball it. Time is money. Now what does your net gain look like? Is it worth the staff and volunteer burnout? Is it worth the opportunity cost of all the things you’re NOT doing because of that event?
Step Two – Set a net threshold and a net goal for every event
If a special event does not net more than a threshold amount, it should be cancelled because it is just not worth the time and effort. That threshold amount should be approximately 10 times your current major gift level. So, if a major gift is $5,000 in your organization, then an approved special event would need to net $50,000. The net goal of an event should be at least half of the gross revenue. For example, a golf tournament with $100,000 in gross revenue should net at least $50,000, each and every year. If not, cancel.
Step Three – No special events are approved unless they submit a budget
Ensure the budget answers the following questions:
- What is the overall realistic gross revenue for the event?
- What are the direct expenses?
- What are the time/labor costs (both staff AND volunteer)?
Why measure volunteer time? Because it is not free, and it represents an opportunity cost. In fact, the IRS allows you to report the value of volunteer hours on your annual 990 Form. If a volunteer is working your event, what are they not doing for your organization? Opening doors to other major donors? Sharing your mission out in the community?
As you start to work out these calculations, make sure to share your findings with your board, special events committees and staff. Take the time to explain why an event is changing or being canceled. Help them to see how they can put their energy and ideas to work for your organization in new ways that will yield greater results. For those events that remain on your calendar, you now have volunteers and staff with more focus and energy to bring to bear on that event, increasing its potential impact.
These three steps can reduce your dependence on special events, but now you have to double down on your direct, face-to-face and volunteer-inspired fundraising campaign. That’s where the culture change can transform your fundraising efforts. Ninety percent of all dollars in North America are raised from individuals. The vast majority of that is done through personal relationship building, with the help of great volunteers.
Bottom Line: Let’s not confuse activity with impact. Special events can be great, as long as they don’t take away from your ability to really fundraise.