When the Swans get ugly.
One of the most sought-after fabled and expensive events in Nashville's nonprofit society, The Swan Ball, may not take place next year.
The reason? Money.
The nonprofit says the volunteers spent too much and the volunteers responded by saying the nonprofit didn’t help enough. You can find more facts in the article linked here. The reason why I wanted to write about this and share my perspective is that a lot of nonprofits rely on fundraising events to support their bottom line. Events are a great way to spread awareness, bring in new donors, celebrate the nonprofit's achievements, and, hopefully, raise a lot of money.
However, I see a lot of nonprofits create events as a way to plug a fiscal hole. The challenge is there is ALWAYS a corresponding expense associated with this strategy. At the least, you are looking at 50% of the revenue going to pay just to host it. So in essence, while you may raise $100,000, your nonprofit spent $50,000 to put it on and you only netted $50,000.
But wait, we raised $50,000, “that’s huge,” you say! It is. But what about the staff time it takes to put on the event? What about the opportunity cost of planning and hosting the event when nonprofit leaders, staff, and board, could be out building stronger bonds with individual donors, foundations, and businesses?
First of all, let me say, that I believe in the power of events. They exist in a broader strategy designed to raise money while promoting the nonprofit and engaging new audiences. Events are not a long-term, growth-focused tactic because the expenses will continue to eat away at your bottom line.
Here are the five things you must consider as you plan your next nonprofit event:
Know your REAL goal. Is it strictly about raising money or are trying to engage a new audience? What about both? You must be clear from the outset with what you want to accomplish and focus solely on that.
50% or bust: The typical event ROI is fifty cents on the dollar. If you are not on target for this, I would not host the event. Your time is better spent growing other revenue sources with a better return on investment.
Get the money in advance: Events typically require sponsorships or table purchases that must be completed before the event. Do not plan an event where you show up and hope you make money. Get at least 80% of your revenue in the door before the first guest arrives.
Surprise and delight: You’ve got a clear goal, you’re going to make money and you have already raised a bunch before the event starts, you must make sure that the guests have the BEST time. What can you do that will encourage your guests to come back next year? There are simple things to make your guests feel special that don’t cost a lot of money. Swag bags get sponsor products in front of guests and people love free things. Names on signage or special personalized notes from leadership welcoming guests when they arrive. Make the event the guests will be passionate to share with others.
Keep the momentum going: Make sure to include your event attendees in future communications. Send a follow-up thank you immediately after the event. Include new donors in a new donor packet or communication sequence so they get a feel for your nonprofit and build a stronger bond.
Events are valuable. But they are valuable when they are effectively executed and meet your objectives. Get the money first, make the guests feel awesome, and enroll your attendees in your annual fund strategy after their first donation.