Your Organization’s Next Special Event: “Fund-Raiser” Or “Friend-Raiser?”

Should a special event be focused on making friends for an organization or bringing in money? On the one hand, every organization needs friends to help promote its mission and to be there for future fund-raising needs. But on the other, there are bills to be paid today.

I believe that the short answer is to go for the money today! Putting on a special event is a substantial effort that requires the dedication of important resources. Those commitments should be made only when the primary goal is to make money.

When properly conducted special events can be a valuable source of additional contributions that complement a nonprofit organization’s traditional fund-raising campaigns. They also can be a way to increase volunteer involvement with an organization, resulting in a larger pool of more committed volunteers to draw upon for future fund-raising campaigns.

Special events can help publicize and promote an organization, and they can be useful tools for developing public awareness of an organization’s contribution to the community. But that should all be secondary to the goal of raising money.

By focusing your special events on fund-raising, you make the measurement of their success clear-cut. By not trying to accomplish two or more differing goals, developing a plan for a special event becomes an exercise in getting from point A to point B by the shortest route possible. A special event with the straightforward primary goal of making money is a special event much more likely to be successful.

Key Criteria for Successful Fund-raising Special Events

  1. They make significant amounts of money.
  2. They have a high ticket-price structure.
  3. Tickets are pre-sold.
  4. They are deliberately targeted to a well-defined market.
  5. They promote community involvement and continuing support.
  6. They are carefully planned and executed to the last detail.

When a Benefit Isn’t a “Benefit”

Special events have no guarantee of success. They can and do go off the tracks and cause controversy and distress in an organization. Special events that are not tightly managed and are not held to high accountability can damage ongoing fund-raising efforts and an organization’s continued vitality.

Pitfalls of Special Event Fund-Raising Efforts Include:

  • Taking your eye off the fund-raising ball. Too often, instead of being a secondary or even tertiary source of contributed income, they are relied upon as a primary source. When that happens, they get in the way of tried and true fund-raising methods. Organizations concentrate their energy on the next special event rather than on directly asking for money from corporations, foundations, and individuals. Organizations that do this are “putting all their eggs in one basket,” and it is the smallest of the fund-raising “baskets” available to them.
  • Too little return for your efforts. More often than not, the net proceeds from such special events simply do not justify the time, effort, and expense expended to produce them.
  • Paying too high a price for success. Some of an organization’s best volunteers, the ones capable of raising larger amounts of money on a one-to-one basis, become involved in a special event. Since they’re often an organization’s most committed and best workers, their time goes to making the event a success, instead of asking donors for needed larger gifts.

In short, a fund-raising benefit event is anything but a benefit when:

  1. It does not make money.
  2. It fails to use that opportunity to make new friends.
  3. It diverts attention from and interferes with other fund-raising.
  4. Volunteers and staff fail to communicate effectively.
  5. It fails to secure enough underwriting to reduce expenses.
  6. It is marred by avoidable mistakes and poor participation.

Special Events Must Fit Into An Organization’s Fund-Raising Mix

Before considering any fund-raising special event, a nonprofit organization should determine the shortfall (the deficit) between what income is earned, if any, from fees and other charges for its programs and services—compared to its annual operating expense. That shortfall has to be the organization’s annual fund-raising goal. It is the amount which must be raised to help carry out the organization’s basic mission, to pay for new and down-the-road initiatives emanating from the organization’s long-range strategic plan, and to balance the budget.

Once that number is known, income goals can be established for the special event, annual campaign, and other efforts to bring in operating income. But those goals are not developed in a vacuum. They must take into account the organization’s capacity to effectively develop multiple contributed income streams, and they must be prioritized. How do the goals fit with the organization’s other fund-raising endeavors—campaigns for endowment, capital, sponsorship, and underwriting? Having ascertained all that, the organization is in position to determine how it can come up with the resources to produce a special event, and how that event fits into its overall fund-raising strategy.

Making the Event Profitable and Worthwhile

A fund-raising special event should not be produced if it will not make enough money to justify the effort. It is poor fund-raising strategy to put on an event with the primary goal of having attendees become good prospects for future giving. This is not very likely when those in attendance often have little real interest in the organization’s mission; are attending an event held at a site other than the organization’s location; and are eating, drinking, and socializing.

Relationship building is further limited by the added distractions of auctions, other spending opportunities, and entertainment. Even if informational handouts are supplied, a video of the organization’s services is shown, or some other display of what the organization does is presented, the exposure is fleeting at best and has little lasting impact. Remember, event attendees are there to have a good time. They just want to have fun.

Another point to consider is that volunteers working on behalf of any fund-raising endeavor are goal driven. If they are producing an event that has an announced dollar goal, they do all they can to achieve that goal. When the goal of an event is to “friend-raise,” or is otherwise indistinct, volunteers working on the event are unlikely to take away a sense of accomplishment. Volunteers need and want stated, measurable, obtainable goals. Give them that, and you give them the opportunity to be winners. If they feel like winners, they’ll be back to help again.

Most successful event planners will tell you that to justify staff and volunteer effort, out of pocket expense, and the other necessary resources required to produce successful benefit events, the event should net at least 70 percent after expenses.

What Type of Special Event Is Right for Your Organization?

The most important factor in finding the right special event for your organization is finding the right fit for your organization. Finding the right fit means not only the activities of the event itself, but also looking at the time, talent, and resources it will take to make the benefit a success.

If you have a predetermined money goal, be sure you choose an event that has the potential to net that goal. Learn from events you have produced in the past. Determine what worked, what didn’t, and why. Choose an event that reflects not only the age and wealth of your constituents and potential attendees, but also their social and business demographics. You can get additional ideas from fund-raising special event publications found at your library, in bookstores, and through the Internet.

Look at what other organizations have done. Obtain examples of their invitations, publicity, and menus. What sort of entertainment did they provide? What were their budgets? Ask other non-profits for event themes which worked for them. Don’t reinvent the wheel. Do borrow liberally from other’s successes. Learn from their mistakes.

Finally, do you have a “hook” on which to hang your event? Is your organization soon to celebrate a special anniversary or other milestone? Is there a “homegrown” celebrity (entertainment, sports, etc.) willing to be a special guest at your function? Or perhaps you will want to produce an auction, ball, dinner, premier home tour, pizza party, barbecue, or walking, running, and cycle “thon.” These and many more ideas have all worked for other non-profits. Ask around, and you’ll find all of the information, material samples, and guidance you need to get a running start for your event.

Developing A Fund-Raising Special Event Plan

Every special event succeeds or fails largely on the strength of its planning. Good organization is the special event planner’s “road map,” agenda, and justification. It assesses the event’s goals, develops strategies, appoints committees, sets timelines, and determines tactics. A realistic fund-raising event cannot succeed without a well-drawn, fully conceived plan. You are ready to plan a special event when:

  1. You have a chairperson who is qualified and will work hard
  2. You have volunteers who are organized and ready to help.
  3. You have an active, dedicated and supportive board.
  4. You have enough time for the volunteers to do a thorough job.
  5. You have adequate staff support.
  6. Your organization has an up-to-date mailing list.
  7. Your organization is well recognized in the community.
  8. You have enough potential sponsors and patrons to make a strong profit.
  9. The benefit planned is the only request for funds you will be making at that time.

Progress: Reports, Meetings, and Sharing the Information

How do you keep a fund-raising benefit event on track? By being well organized, constantly monitoring progress, and informing all event planning participants of that progress. You should structure the event committee to encourage accountability similar to that found in an organizational management chart.

The best way to make sure that information is being shared is to schedule weekly or monthly progress meetings. Committee members and others know they will be expected to report on their area of responsibility. They need to report what has been done, what is being done, and what is yet to be done. You want people leaving an event progress meeting with a clear understanding of where the event stands relative to its timeline, and with a renewed, reinvigorated commitment to get the job done.

Write a Final Wrap-Up Report of the Special Event

Once your event is over, you have to do something crucially important for your next event. Convene a meeting of the leaders of the event to conduct a final critique of what happened and to plan for the future. This should happen as soon as possible. Delay, and people will begin to forget important details.

A review of the event starts simply with the questions: What went right? What went wrong? The replies to those questions will contain the answer to the next question. Will we do it again next year? There are other questions you need to answer. They include:

  1. Did the event make a significant enough amount of money?
  2. Were the tickets priced just right?
  3. Did we pre-sell enough tickets?
  4. Did we target a well-defined market?
  5. Will the event help promote community involvement and continuing support?
  6. Did we really carefully plan and execute to the last detail?
  7. Will we use the event as an opportunity to make new friends?
  8. Did it divert attention or interfere with other fund-raising?
  9. Did volunteers and staff communicate effectively?
  10. Did we secure enough underwriting to significantly reduce expenses?
  11. Did we experience avoidable mistakes?
  12. Was our chairperson qualified and did he/she work hard?
  13. Were our volunteers well organized and ready to help?
  14. Did we have an active, dedicated, supportive board?
  15. Was there enough time for the volunteers to do a thorough job?
  16. Did we have adequate staff support?
  17. Did our organization have an up-to-date mailing list?
  18. Did we have enough potential sponsors and patrons to make a strong profit?

Get answers to those questions and you will have the substance of your post-event final report.

Thanking Sponsors And Underwriters

If you raised sponsorship or underwriting money for your special event, you need to issue a special thanks to the organizations and people who provided it.

Ask yourself how you would have liked to be thanked if your company had been the event sponsor. It’s almost that simple. If you had seen to it that your company gave funds to a nonprofit’s event, what would you like to have from them once the event was completed? What is it you could show to your colleagues to let them know their company’s gift was appreciated and that it was money well spent to build better public relations and goodwill in the community?

Be sure to ask event coordinators from other nonprofit organizations for their advice. Get examples of everything they do, including their versions of sponsorship recognition, credits, and acknowledgments. If you ask a rather geographically distant and non-competing non-profit, I doubt you will have any problem getting cooperation. Most folks in our business are happy to share with colleagues.

A sponsor of a special event would want and would appreciate:

  1. Prompt acknowledgment—not months after the event.
  2. Knowing the event was a success and that, “We could not have done it without you.”
  3. Being told how much net profit was realized. (Only if that number is significant. If it was not, refer to the net proceeds in a general way.)
  4. Being informed of the real good the sponsorship money will do to help carry out the organization’s mission.
  5. A notebook, scrapbook, or folder containing examples of all promotion and publicity for the event, especially with liberal mention of the sponsoring company.
  6. Receiving an official thank-you letter signed by the chair of the event, or by the organization’s Board President. Not a staff member. The best way to present your organization’s thanks and acknowledgments is in person. See if representatives from the sponsor would like to meet with your organization’s officials for the presentation. If that is not possible, simply do so by mail.

Will There Be A Next Time?

Now there’s the final and maybe biggest question. To answer it the first thing you do is to carefully assess the true value of the net profit gained by the event. Just what amount of contributed income did it provide to help balance the organization’s budget? How the event exceeded, meet, or did not meet, the goals established at the start will help to answer:

  1. Will the event will be repeated next year?
  2. If so, will it be done in the same or in a different way?
  3. If to be done in a different way, how different?

Most important is that the event did not interfere in any way with your organization’s ability to carry out its other essential fund-raising campaigns. A fund-raising event should only be produced as an additional source of contributed income to those traditional campaigns. Absolutely never as an alternative to them.

Note: My special thanks to good friends and expert event planners, Marilyn Brentlinger, Mindy Kuth, and Judith Weiss for enabling me to “benefit” from their knowledge of benefits.

P. S.
The Gilbert and Sullivan comic operas have been performed throughout the world for over one hundred years. All thirteen of the W. S. Gilbert and A. S. Sullivan comic operas are overflowing with satire regarding many aspects of Victorian society which are still relevant and funny to this day. That includes librettist Gilbert’s attitude regarding a charity event in 1885. It amuses me because so often benefit planners will name a famous celebrity with whom they have no association, and expect that individual to appear or otherwise perform at their event for no fee whatever.

Gilbert wrote a response (now in the British Museum) to a charity which asked for his permission to put on one of the G & S operas without the payment of royalties to G & S.

“In reply to your letter of the 15th, I have to inform you that whenever the gross receipts of an amateur performance are handed over intact to charity, I invariably allow my pieces to be paid without fee. But when the Committee deduct the cost of rent, dresses, lighting, advertisements, printing, refreshments, travel expenses, etc. from the gross receipts, and then hand over the balance (if any) to the charity, I always require to be paid with the other tradespeople. It appears to me to be unreasonable that the only person involved who is not directly interested in the particular charity for which the performance is given should be the only person involved who is to be out of pocket by the performance.”

Sincerely,
W. S. Gilbert

Addendum:

Fund-Raising Benefit and Event Net Profit

The article you have just read: Your Organization’s Next Special Event: “FundRaiser” Or “Friend-Raiser?” strongly urges that any special event be enough of a fund-raiser to make the time, effort, resources, and cost expended worthwhile. To repeat, my reference in the article to a net profit benchmark figure is as follows: “Most successful event planners will tell you that to justify staff and volunteer effort, out of pocket expense, and the other necessary resources required to produce successful benefit events, the event should net at least 70 percent after expenses.”

Special event planners and participants frequently ask for a “formula” gleaned from the experience of others to forecast net proceeds from special events, which they can apply to their particular event. From my experience with scores of such events, the only “science” I know toward working to a net profit goal of any amount, is the development of a reasonable, defensible, and exacting budget. Net income objectives vary from organization to organization, relative to what is satisfactory to the organization or what is considered to be feasible. Some will expect to break even, and some will expect to lose money because it’s the first event they will produce, or they simply want to promote a “friend-raiser,” so never mind the “bottom-line” result.

In my article cited above, my suggested rate (high—at least 70% net profit) is my way to emphasize what I believe special events must be all about—to make a significant amount of money. Unfortunately, the “bottom-line” focus and dedication are all too often left to chance by non-profits. My position, that spending about 30% of the gross is just about enough to spend, is based on personal experience.

So often, when events get rolling, new and unexpected expenses occur, and even when the events are all over and done, other negative cost surprises inevitably show up in the final audit. So, when folks begin planning an event with an expense  vs. gross income budget, and they like the sound of, say, a 30% net profit objective, chances are very high that when all is said and done, the number will actually be much less. Besides, it is hard for me to accept that for every $10 we work to raise, we spend seven of those hard-earned dollars. I think that is spending far too much to make far too little. That’s why I urge folks to shoot high. “Contingency” (expecting the unexpected) is not always realistically addressed, if it is at all. And budgets are all too often frivolously changed in midstream to spend even more money.

Many event planners for small non-profits, organizations generally inexperienced in the traditional philanthropic-style process to raise money, often look solely or mainly to special events for the money they need. The good people producing those events are generally inexperienced as well with the ups and downs of special event fund-raising. Their net profit forecasts usually fall far short—at times extremely well under expectations. So in such instances, planning to achieve, say, a 30% net profit—which sounds good to them—is terribly risky, especially given that they almost invariably fail (from what I have seen and from what I have been told by expert special event planners and consultants).

I know of some well established and successful event planners who state that a minimum of 50% should be realized as net proceeds. Others have told me the 70% number. Others will tell us that it is a waste of resources if the event does not clear $50,000, regardless of the percentage of expense to gross. We get percentages and we get numbers for the success-rate ideal. And so, the “ideal” net profit number becomes a mostly subjective issue, and there is no set formula or science. Therefore, I believe that it is not possible to set any number. One organization’s special event planners simply cannot rely on the results of another non-profit’s special event—no matter how similar they might seem to be at the beginning.

I suggest at least a 70% net profit number as a target, something for folks to reach for, considering how difficult it is to accurately forecast with all of the inherent variables (time, effort, money, other resources)—especially for a first ever event. I don’t want what I suggest to be something considered unreasonable, to sound frivolous, or to imply elitism—but working to a high net profit goal will encourage more seeking of underwriting money and a more careful review of the budget’s components to maximize all other income—to make it all worth the effort. And be ready for those unforeseen reductions in anticipated patron or underwriting support, and those inevitable, and often significant, unexpected expenses.

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Comments

7 responses to “Your Organization’s Next Special Event: “Fund-Raiser” Or “Friend-Raiser?””

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  1. Eric says:

    I believe the fund-raisers are not only an essential part of the whole npo experience but something that will allow donors, volunteers and corporate sponsors to see a nonprofit in action. My website is dedicated to helping nonprofits reach thousands of donors, volunteers and corporate sponsors. Check us out at http://www.npospecialevents.com

  2. Tony Poderis says:

    Herbert: Thank you. Yes, we all should present open houses, and other get-together events which are good starters for those who, in time, could be donors, volunteers, and advocates of what we do.
    As you agreed, however, when conducting a "fund-raiser," that is exactly what is must be. It must raise funds, and funds in a meaningful amount to justify the time, effort, and expense put into it.

  3.  
    Tony P:
    Your point of view is well taken into heart. The purpose of a special event should be to raise funds. However, there may be other annual get-together or open house events to celebrate the success of a not-for-profit organization. This is in direct contrast with a fund-raising event. Your knowledge and experience in this field of work is invaluable. Keep the good work.
    Herbert Tombia
    Network for Reforms

  4. Tony Poderis says:

    Olivia: Thank you for your experienced support to my argument that fund-raising events must be just that: produced only to raise money—in significant quantities, at a very high net profit of income to expense to justify the time, effort, cost and other resources expended.

    My “at least” 70% net profit figure urges a match, at the minimum, but encourages that goal to be surpassed. I obtained that number over many years from some of the very best professional and volunteer event directors. One of the best of the best even urged that no organization should produce a fund-raising event unless they could be reasonably certain to net at least $50,000.

    It is necessary to shoot high, no matter the size and age of the organization, because so much is at stake when such organizations may be surely putting most, or all, of their fund-raising “eggs” in one event “basket.”

    The 15% net profit requirement at the start of an event’s planning is a good target, knowing full well that once even the most carefully crafted and projected budgets are produced, and we are working line item by line item to them, somewhere along the way, and often at the end of the event, there are unwelcome surprises. My Addendum to the above article works to make the point to which you referred—as does the article overall.

    Far too often I have argued, sometimes in vain, with organizations working to produce what they term as fund-raising events, but at the same time, early on, saying that it’s OK if they only make a little money, break even, or even lose a little, because in the end they will be “making friends.” Your welcome note to my article will hopefully deter any of our readers from such a frivolous and damaging idea.

  5. Olivia says:

    Working in the nonprofit sector I have worked in events at organizations that require standards of expenses not exceed 15%. While this was a challenge, I definitely believe this upholds the integrity of the organization. Currently with another nonprofit, I see efforts gone to waste all too often with “friend-raisers” that raise $0 or even come up negative. One has to consider the value of your organization’s brand and set a standard based on that figure. Also, meaningless fundraisers and friend-raisers can burn out staff and damage your credibility as a development leader.

  6. Tony Poderis says:

    Hello Rachel: Thanks for your comment. Yes, people who don’t like an organization, don’t give to that organization. People who know little about an organization, give little at best. Only those people who know and like an organization will support it. Raise friends and you will indeed raise money.

    However, if by a “friend-raiser,” that is an event putting forth time, effort and money, and is intended to raise money, then I stay with the assertions made in the above article that—it is not a good strategy to put on a fund-raising event with the primary goal of having attendees become good prospects for future giving.

    This is not very likely when those in attendance often have little real interest in the organization’s mission; are attending an event held at a site other than the organization’s location; and are eating, drinking, and socializing.

    Relationship building is further limited by the added distractions of auctions, other spending opportunities, and entertainment. Even if informational handouts are supplied, a video of the organization’s services is shown, or some other display of what the organization does is presented, the exposure is fleeting at best and has little lasting impact. Remember, event attendees are there to have a good time. They just want to have fun.

    If you want to have a “friend-raiser,” along the lines of hosting an Open House, then, of course, that is a good way to effect a form of stewardship. I simply hate to see time, effort, and money expended for a fund-raising event, not making money, and instead, turned into a very difficult venue to develop true stewardship. Please take another reading of my article and see the difference, and know that I fully respect and recognize the value of putting into practice the best ways to effect stewardship.

    Do take a look at what I suggest ot be real friend-raising and stewardship programs.
    http://www.raise-funds.com/2003/building-donor-loyalty-chapter-1/

  7. I believe a friend raiser is an important part of stewardship, part of the 7 touches philosophy.