Is it worth it for your non-profit to plan a fundraising event? Do fundraising events
have a good return on investment? Let's look at the pros and cons in this video. [Music]
Welcome or welcome back! My name is Amber Melanie Smith and I'm a non-profit founder and
executive director who makes these videos here on YouTube all about non-profits, social Enterprise,
social impact and more. I hope that you like this video and find it useful - don't forget to
give it a like and subscribe to my channel for more content like this. I also have a website,
FounderToFullTime.com where I have a couple of online trainings for people starting a non-profit
or developing a successful and sustainable fundraising plan so go check those out. All
right I'm gonna get right into this topic here and I want to start by talking about how you
would determine if something has a good return on investment now of course in general terms a
good return on investment means you can answer the question was this worth it with a yes and
typically when we're thinking of a fundraising event because the most obvious metric to measure
success by is money you might think to yourself well if the event brought in more money than
it costs then it must be worth it right but the answer is a little bit more complicated because
money is not all that you put in to a fundraising event you also put in time social capital and
other resources so the Nuance here on whether or not a fundraising event is worth it comes down
to what we call opportunity cost if you're not already familiar with the concept of opportunity
cost it goes something like this what benefits might you lose because you chose to do one thing
instead of another thing or basically because you chose one opportunity over here instead of
this opportunity over here you no longer get the benefits of this other opportunity that
you did not choose so bringing that concept into fundraising events basically because you chose to
spend your time and your resources planning if fundraising event you no longer get the
benefits of the Alternatives which might be in this case working on developing your donor base
or working on an earned income or other type of fundraising strategy the time you spent planning
that fundraising event is now gone and cannot be used for another purpose and the question can be
kind of thought through further with a little bit of math let's say you spend 100 hours on doing
a fundraising event and that fundraising event raises five thousand dollars the question becomes
could you have spent that same 100 hours on developing your individual donor database or some
other fundraising strategy and raised twenty five thousand dollars now obviously every non-profits
situation and audience and size of their Community member base and audience is going to be a little
bit different but in gen General many fundraising professionals say that yes it is more worth it to
do something else to fundraise other than planning a fundraising event fundraising professionals
including the association of fundraising professionals AFP took this question and
actually made a really helpful chart demonstrating this point they took the average amounts of money
raised by non-profits in different fundraising scenarios such as planning fundraising events
asking individual donors and growing your donor base writing grants doing major gifts
Etc and found that on average non-profits are spending 50 cents to raise one dollar when they
plan a fundraising event now before you think oh that's not so bad it's all relative so take a look
at the chart and you'll see that while it might take 50 cents to raise a dollar planning events
it's actually far cheaper to try some of these other strategies like spending a quarter to raise
a dollar or 20 cents to raise a dollar through you know cultivating your individual donor database
Etc so if you uh ascribe to the you know motto time is money you kind of see what we're talking
about here because you could be spending that same amount of time planning a fundraising event as you
might doing something else but possibly getting a higher return on investment doing something
else so given all of this is it worth it to host fundraising events are there other reasons you
might host fundraising events that might help your organization in the short or long term
I'm going to talk through some pros and cons to help you think about this question and apply it
to your unique non-profit situation okay let's talk through the cons of planning a fundraising
event and I've kind of covered them a little bit here but I'm just going to summarize them
for the sake of this discussion the first is as we've stated it can take a lot of time to plan
a fundraising event and the second is it can take a lot of other types of resources including money
um let's say that you are going to host um some kind of lunch like a fundraising lunch for 50
people well depending on you know what resources you already have available you're going to need
lots of things you're going to need a venue where you can post these people if that venue doesn't
already include tables and chairs you might need to rent those tables and chairs from a
an event company that rents out things like that you're going to need to get catering you need to
cover the lunches for people you're going to need to do some marketing and Outreach to make sure
you can get at least 50 people to your event you might need an MC or some kind of entertainment so
you see there are a lot of moving pieces to put together an event and then make it a good event
because if you're going to put in all that time you may as well make it good so I did some simple
calculations here because I just kind of wanted to demonstrate this concept of financial return
on investment a little bit more using the example I just gave if you are in a medium to large city
let's talk about some example estimates of costs for each of the things that I just listed so a
couple a hundred to a couple thousand dollars for a venue um might be what you might expect
and I've believed me I've planned my fair share of events so this is about right for that size city
um renting tables and chairs for 50 guests if your Venue doesn't already include that stuff
I mean that could cost another several hundred there's the rental fee per chair and then per
table and then they charge a fee to deliver it out to you and then there's taxes and all that stuff
um let's say you want to make it pretty so you got decorations that depending on
how crazy you go with those could be another couple hundred bucks
um let's say you're doing a more casual lunch to save money so nothing too fancy um so let's
say you go with something that might be about 15 per person um which is pretty cheap for catering
um that times 50 people would be 750 and then of course you've got service fees taxes and tip
Etc so you might be looking at like nine hundred thousand dollars and that's on the cheap side
um okay so let's say for the marketing stuff um let's say you already have a decent sized audience
um you might be able to save some money on that you know decent sized audience might mean a lot
of people on your mailing list a lot of people who volunteer with you people you know in your
mind are likely to buy a ticket to attend this lunch that you're doing um so but if you don't
have that audience built in you might need to spend a little bit of money on advertising and
depending on the type of advertising you want to do it could be another couple hundred to a
couple thousand dollars again uh okay so if you're doing entertainment and you can't get it donated
um you might be looking at anywhere from a couple hundred to a couple thousand dollars for some
kind of Entertainer um I know we've uh had MCS before we've had auctioneers when we were doing
an auction they can be thousands of dollars um so entertainment professional speakers depending on
um how well known they are could be a couple thousand dollars you know if it's someone local
a couple hundred or you might be able to get like a media personality to donate their time
um but just something to think about there
okay so between all of those things and we're talking about like a bare minimum here of like
three thousand dollars that's on the low side I was being pretty conservative with some of those
things okay so let's say you're going to spend three thousand dollars and of course also the
time to plan all this out uh with 50 anticipated guests in order to just break even for this event
you're gonna need to charge sixty dollars ahead so hopefully you have the confidence that the
audience that you've built can pay the sixty dollars ahead to just break even and obviously
your goal here is to not break even but to actually make a profit on this fundraising
event so you'd be needing to charge a little bit more um yeah and maybe it also took you and your
team a couple of hours per week for a couple of months to plan this all out now disclaimer
once again obviously so many different types of events exist some cheaper some more expensive
um and your situation is going to vary but this just very simple example is meant to illustrate
um how financially it may not be worth it to host this event I've had people ask well don't
worry we'll just get everything donated we can do that right you can try but in my experience
it's much more realistic and safe to assume you're not going to be able to get anything donated and
be able to have the budget available as a backup to pay for the things like food entertainment Etc
obviously try you know do your best to get things donated but especially in this tight economy and
if you are working with smaller businesses it might not be possible to get get those things
donated by those businesses so just prepare for that likelihood with all that out of the way there
are still some pros to hosting fundraising events so I'm going to talk through some of those now
one of the top benefits of hosting a fundraising event is its potential to raise awareness about
your mission and what you do there's potential to get new people who've never heard of you to attend
to share this event with the media and get some attention there but events can be a good awareness
raising tool the second benefit which is kind of related to the first but has more to do with
your existing audience is that it allows you to build relationships with people in your existing
Circle so if you have volunteers or people who have already donated to your organization
um or just people you're looking to get to know having them at this event and being able
to interact with them in person can be very beneficial and help them feel closer to your
cause which may mean that they make a financial donation later even if not at the event itself
and a third benefit is that it might give your board of directors a chance to really shine as
ambassadors to your cause letting them get out there and and talk to the guests and engage
with them on the mission and ask them questions about themselves is a great way to further those
relationships with people in attendance and also let your board do one of the things that it should
be doing which is serving as spokespeople for your cause so for these reasons especially if you're
a small or brand new non-profit organization you might think to yourself that hosting fundraising
events that are affordable and not too you know expensive with all the materials and stuff they
could be worth it for you because they're going to allow you to like I just said build up your
audience and deepen your relationship with people who are already interested in your cause and doing
those two things is really critical to have the support you need down the line from those people
as well so there you have it in summary if you um if you set goals for fundraising events that
are not just about the money but maybe are about raising awareness and building relationships you
might find that those events are worthwhile and on the flip side if you are um just needing to
raise some money might not be uh the best return on investment from a financial perspective if you
can spend the same amount of time on a different fundraising strategy that might bring in more
money for you I'd love to hear from you have you posted or helped out with or been a part of
fundraising events that you felt were really worth it share more about those in the comments below
um what did you do that made those events worthwhile financially for your cause or
alternatively what are some of the other fundraising strategies that you've tried
instead of fundraising events that you felt had a better return on investment share some of those
too as I mentioned at the beginning of the video if you are starting a nonprofit are working on
developing a sustainable fundraising plan I've got some great online trainings at my website
foundertofulltime.com and I hope that you check those out I also have a newsletter that I send
out with tips and news and resources and sometimes funding opportunities that you can subscribe to at
the link in the description below this video or in the comments I hope that you join that and of
course you can unsubscribe at any time I have a group on Facebook - final thing - called Change
the World or Bust where we have a couple thousand folks in there from all over the place who are
sharing the good that they're doing in the world, and we're having some good conversations there so
I hope you can join us there. Once again my name is Amber Melanie Smith I hope that you found this
video interesting and thought provoking and useful to you and I hope to see you next time, bye!
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