Sunday, March 11, 2012

The Two Faces of Fundraising Events: Part 1

The Run Walk Ride Fundraising Council's sixth annual study revealed that in 2011 the top 30 fundraising races, walks, and other athletic events took in $1.69-billion, up $40.8 million or a 2.46% increase over 2010. 11.6 million people participated in some sort of "thon fundraising" according to the study. This was an increase of over 200,000 over the previous year.  36,422 events were held by the top 30 event sponsors. (The American Heart Association held over 24,000 separate events alone in 2011.)

The top five grossing events were:
  • American Cancer Society - Relay for Life - - $415,000,000
  • Susan G. Komen for the Cure - Race for the Cure -  $131,315,739
  • March of Dimes - March for Babies - $105,000,000
  • American Heart Association - Heart Walk - $99,088,367
  • The Leukemia & Lymphoma Society - Team in Training - $87,511,103
It seems as if the "fundraising event" is a favorite for every nonprofit. Looking at the numbers above it is easy to see why it is so tempting. Even a more modest event can gross significant dollars and attract many new prospective supporters.

Let's consider the "good face" or advantages of event fundraising:
  • An event can attract new supporters such as hard to engage donors, government officials, corporate leaders, and local or national media personalities.
  • It can often raise significant gross revenue.
  • A well executed event can help burnish your brand and enhance your charity's awareness in the community.
  • It can unite supporters in a sharply focused common goal.
  • It can provide a compelling platform for media exposure and raise public awareness in your cause.
  • It can present an opportunity for nonprofit leadership to interact with important community representatives.
  • An event can be specifically tailored to leverage your charities brand.
  • People like to hobnob with their peers or with the socially elevated. 
  • You can obtain sponsors that might not ordinarily associate with your organization.
  • Events can be a nice way to thank current supporters.
  • Successful events tend to increase in effectiveness over time.
And now the disadvantages or "bad face" of event fundraising:
  • They can take a year to plan and three years to reach optimum revenue returns.
  • An unsuccessful event can tarnish your organization's reputation and brand.
  • Events suck-up a tremendous amount of staff time managing volunteers and interacting with vendors.
  • They can have high initial costs, hidden costs, and can even cost far more then revenue raised.
  • Events could be the victim of unrealistic expectations ("American Cancer Society raised $415 million, why can't we raise a percentage of that?")
  • Attendees may have no long-term interest in your organization and will need to be kept engaged through future events.
  • They could be sensitive to outside influences such as disasters, wars, or scandals.
  • There are tens of thousands of events each year with probably hundreds in your own backyard competing for the donor's attention and engagement. Many events will be run by big, national charities that could overwhelm any marketing presence you may attempt to create if you are competing with them for airtime and "share of mind".
These "good and bad" elements of events don't even tell the entire story. It really depends on how your organization looks at events. Do you consider them an important revenue generating activity or do you look at them as more of a friendraising, cultivation, and stewardship opportunity? This is a critical distinction that I will explore more in my next post.

In the meantime, consider these questions:
  • How do you calculate the financial success of a major event?
  • Do you rely upon gross revenue compared to direct expenses?
  • Do you understand what your indirect costs are and why they should be included in your calculations?
  • Are there more effective means to accomplish the same end?

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