If you were asked at your daughter’s soccer game or by a friend or even a family member “What do you do for work?” and you answered, “I’m a fundraiser” or “I work at a nonprofit,” I bet nine out of 10 people would respond “Oh, you do fundraising events.”
The nonprofit industry has shifted from organizations that started out securing the majority—if not all of their gift income—from galas, golf tournaments or regattas to organizations that only secure a small percentage of their revenue from event activity.
The Association for Health Care Philanthropy (AHP) 2017 Report on Giving cited that for top performers, average event revenue accounts for 8.9 percent of their total philanthropic revenue compared to 29.1 percent for major gifts. When you combine all organizations, the average event revenue is 14 percent of the total compared to 24.3 percent for major gifts.
When we looked at similar data cited in the AHP 2010 Annual Survey of Giving, average event revenue accounted for 14.8 percent of the total—not that much different seven years later. The difference being that in 2010, the average major gifts revenue accounted for 17.1 percent of the total revenue, a 7.2 percent increase in major gifts revenue. Understand that this is not exactly comparing apples to apples, based on reporting changes and levels of survey participation. One could surmise that event activity is still important, but establishing a major gifts program is critical to significant growth of your nonprofit.
A Case for Events
Why are events important? Events play a key role for nonprofit organizations. They are revenue generators, public relations and messaging platforms, create volunteer opportunities, act as a pipeline for future large donors and can help with educating and engaging hospital administration and medical staff. If events are used strategically to accomplish the above mentioned then it may be worth the return on investment, even if the return is not tangible, specifically in cost per dollar raised (CPDR). If you look at the largest donors to your organization, I wonder how many of those donors’ first gift was to an event you held.
Upsetting the Event Apple Cart
Time consuming, political, low return-on-investment, staff burnout, opportunity cost of staff doing something more productive, pressure to fill seats or foursomes, disgruntled volunteers, can’t decide between chicken or steak. These are common complaints I hear from clients who are events heavy. But, before you decide to abandon or reduce your event activity, keep in mind some important questions: Can you and are you willing to take a hit in the revenue the event generates, regardless of the expenses you incur? Will there be a volunteer revolt? Will your CEO understand that an investment towards major gifts is a longer-term investment?
A Case for Major Gifts
It’s easy to understand why major gifts to your organization are so important. Most organizations have had one, or a few, large gifts come in over the years. The Board, CEO and development staff get excited. Then after a week or two of celebrating and hoping more would come in, their focus returns to selling tickets to the gala that’s coming up in four months. Simply put, there is no better investment an organization can make than building and maintaining a major gifts program. As stated earlier, unlike events that have very defined timelines and much clearer revenue projections, major gifts are more of an art and getting your CEO and Board to understand the move from a transactional organization to a relational one takes time.
Step 1: Understand where you’re starting. Conduct an internal inventory and evaluation of existing events, staffing, volunteer structure, CPDR and event strategy. Answering the questions referenced earlier regarding the indirect benefits the event produces.
Step 2: Now that you have data to support decisions you may need to make, build internal consensus. Start with your CEO. Develop a plan with a SWOT analysis, a budget and financial projections. This doesn’t need to be 10 pages; keep it easy to read and to the point. Include resources you would need to add major gifts staff and what their five-year revenue projection would each be. If you’re reducing events and associated revenue, show how you plan to recoup that gift income over time with major gifts activity.
Step 3: If you’re eliminating an event(s), build volunteer consensus. Nothing can be more troublesome for staff than a volunteer whose identity has been swept away without consulting him or her. Start with volunteers who get it and use them as spokespeople for the rest of the group. You won’t please everyone, but you won’t be on an island by yourself, either.
Step 4: In the words of Peter Drucker “What gets measured gets done,” meaning the more you report on major gifts activity (i.e. number of major gifts prospects and various levels, proposals planned, solicitations, successful closure, dollars raised) to the CEO and Board the more they will pay attention and start to understand.
Step 5: Get some wins…for your volunteers, CEO and medical staff. Make it easy for your CEO and volunteers to be involved in your major gifts activities. Start with involving them in strategy and stewardship. Celebrate all major gifts by recognizing those who were involved, even if it was in the smallest way.
Step 6: If you plan on continuing your events, start using them strategically.
- Organize pre-event and post-event strategies with your major gifts team and events team. This will help cross train your events team on the art of major gifts.
- Develop event strategy with your volunteers, CEO and medical staff – have them complete three moves with three different prospects, for instance invite in for a tour and lunch.
- Wealth screen all event attendees.
- Ensure proper follow-up.
There is much more to consider when moving from an event driven organization to one that focuses on major gifts. Check out my paper The Importance of a Major Gifts Program and How to Build One or send me an email at firstname.lastname@example.org.