On a weekly basis, there is a new webinar or article about how nonprofits need to ‘rethink’ or cancel a fundraising gala. Yet, every day there is a new gala on the calendar.
Why do we have a disconnect? The short answer is that consultants dislike events because most nonprofits host bad events that are not measured or designed correctly. (Note: events are very hard to change when volunteers, staff and a community become wed to them.)
I know this conundrum first-hand. In my 16 years involved with a nonprofit, we created an event, canceled that event, and then created another event. For the last 8 years, I’ve witnessed the same in many nonprofits and the event ALWAYS returns.
Consultant: Event fundraising has a low ROI (both direct expenses but also and especially, staff time) when evaluated by net revenue. This is true in every respect when compared to major gift fundraising. "You should cancel your event."
Nonprofit: We need new donors and want the community to know about what we do. We should host an event! (Translated: We do not have an obvious donor to cultivate for a major gift and need people to know about us first.)
However, over time, the event (created to acquire new donors) does not change and is only measured by net revenue. When the event is only measured by net revenue, nonprofits begin to create poorly designed events. Over the years, the pressure to increase revenue builds and revenue gimmicks like auctions, wine pulls and raffles are added. These have a low rate of donor retention and erode the original reasons for the event. These additions require significant staff time and yield very little when measured by ROI.
That's how we got into this spot with nonprofit consultants.
Also check out the following article:
“A Gala is Not Philanthropy” by Jeff Schreifels on Nonprofit Pro.