Boards & Special Events “The Problem”
by Ron Huddleston, President
I recently attended a board of directors meeting where the subject of fundraising came up and I was amazed how the board reacted, instead of looking at the long-term and consider hiring an advancement professional, they threw out a litany of special event ideas that totally floored me. When I inquired about hiring a professional who could train the board in solicitation skills and build a solid development program their faces turned white as though they saw a ghost. You mean ask someone for money we cannot do that, one board member stated. I just smiled and remembered this article that we wrote in
the late ninety’s, it is unfortunately still viable today!
First, you are thinking to yourself why is there a problem with special events? They are great. You bring hundreds of people together; they get to hear the message of your organization and they meet other people who are interested in the
organization. Plus, many can meet your board members. A win win for everyone, right? Wrong!
Most special events, however, have little or no ability to
cultivate major donors, nor do they usually attract new friends to an organization’s program. The argument is often made
and usually correct, that special events are time-consuming, extraordinarily detailed, and labor-
intensive. Boards get very, very engaged in special events. They become like this big special event committee and then in most cases I am familiar when it is time for the petal to hit the metal the events fall on staff members to coordinate and implement. The board is nowhere to be seen, except at the event to take the accolades…lol. Their costs are high in staffing and volunteer hours, and usually cost upwards of 50, 60 to 70% of gross revenue. An incredible time bandit, ask any staff member who
already says they have too much to do with the other parts of their jobs. This is one of the problems.
Another big problem is that special event fundraising lets executive staff, development officers and board members off the hook from performing one of their fiduciary duties, actual major gift fundraising.
Let me explain. I am going to use the Girl Scouts as an example. Every spring they knock on your door, a colleague at work has a daughter in scouts selling cookies or your boss approaches you and encourages you to buy some cookies from his/her niece. Let us face it, most of us had bought Girl Scout cookies and we all agree that the Thin Mints are the best. Before you know you have spent a hundred dollars on cookies that you clearly do not need. But you feel good because you helped a little girl and met the requests from friends and colleagues.
Then if you were asked what the Girl Scouts do with those hundred dollars, what are you going to say? My Aunt was a girl scout leader for more than 30 years and she had difficulty explaining that question too! But that is another story. You would say something about empowering girls, going to camp, or helping a kid win a prize or trip. But you really do not know. Meanwhile, the whole time you are thinking I want to eat the Thin Mints!
This is what I mean. The Girl Scouts has kind of ruined fundraising for the rest of us. I do mean that lightheartedly. The Girl Scouts do an amazing, amazing job.
My point is about transactions vs. relationships, which we have all been told and trained in is basis to successful fundraising.
I have spent more than 20 years working with organizations trying to make them more effective so that they can realize their mission, increase their visibility, move obstacles out of their way and to increase their bottom line. Without the later the other three can only be done marginally.
Another problem for many nonprofits is that their revenue portfolio is not diverse enough. They are overly reliant on a variety of special events many of which are at the whim of the board.
Sometimes to the tune of like 80 or 90%. It is like your financial advisor taking all your investment portfolio and putting it into one stock, hence, all your eggs in one basket. What is ironic, I have worked with a board where it is the financial advisors coming up with all the different ways to have special events, like it is was diversifying your portfolio. Believe me, it is not.
I think special events are like Thin Mints. I want to prove my point to you, that selling tickets or cookies is different from asking someone to invest in the mission of your organization.
Inviting someone to the opportunity to participate in a real and lasting way with your organization. So, to make my point I am going to make two sample asks as a board member of an organization, one using the “ticket mentality” and the other as an outright gift.
I am going to make them of Jack and Christine Got bucks, who are close friends and business associates, for $2,500.
First, I am going to invite them to buy a table for $2,500 for our upcoming gala. I am going to use as an example The Salvation Army in Phoenix. It is an organization that I had the privilege to do a $7 million dollar campaign for about 15 years ago. Most everyone knows the work the Army does with abused women with children, single men, and women with substance abuse and the homeless to mention a few of their programs.
The ticket mentality ask “Jack, hey, you know that I am on the board of The Salvation Army here in Phoenix. It is an organization that has had a lot of significance to me and my wife over the years. We are having are annual black-tie gala in the Spring and I would like you and Christine consider hosting a table for $2,500. My wife and I are hosting a table as well. It is going to be such an incredible event; it will be held at the Biltmore; I know you have been there and know it is an incredible venue. Beautiful views of the golf course and surrounding mountains. The food is being catered by Christopher’s, the premier restaurant in the Valley, I do not know if you have ever had their food, but it is wonderful. In addition, we are honoring a couple of great civic leaders and philanthropists. With more than five hundred in attendance the room is going to be filled with some very interesting and influential people that I think would be helpful for you to know and meet as you take your business to the next level. It is also a great way of hosting your current clients at your table and by the way its tax-deductible. Please join us the table of ten is just $2,500 and it is worth every penny, and you know how important The Salvation Army is to me and the Phoenix Metropolitan Area.”
Jack’s $2,500 direct ask, “So Jack, I am on the board of The Salvation Army here in Phoenix as you may know. It is an amazing board and an amazing organization. I feel so privileged to be able to contribute to an organization that has given so much to our community and especially those who are in such dire need. I do not know what you know about how much of an impact the organization has here in the Valley. This past year we have helped 150 abused women with children find housing; helped more than 230 men with substance abuse to get treatment and back on their feet and have served more than 10,000 meals to the homeless and disenfranchised. We have engaged over 1,000 volunteers who come, cook, work in the thrift store, and play with kids. It is a remarkable organization and I feel privileged to be a part of their mission.”
“We do not get much money from the national organization unlike what a lot of people think, the local Army organization is on their own. Therefore, we must rely very heavily on private gift support from generous individuals like you. My family has been a contributor to The Salvation Army for more than 10 years and I would like you and Christine very much to join me as a donor to Army here in Phoenix with a gift of $2,500 you may wish to give more or less and whatever you give will touch the lives of many in need.”
Okay. But one of those asks has a big cost. if he buys a table at $2,500. It is going to cost the organization at least forty, fifty, sixty or more cents on every dollar. (That is what most organizations spend across the United States according to AFP) (Industry Standards is no more than 50%, which is still too high).
One of those gifts will stick and one of them will not. If Jack is out of town next year, he will not be going to the gala. However, If he gives the outright gift of $2,500, what happens? About six or nine months from now I have a meeting with Jack and Christine where I tell them something remarkable, a great story about something that happened at The Salvation Army and at the end of that meeting I will say, “Your fingerprints are all over that work, you really changed lives with your gift, thank you again.”
Hear the difference? The outright ask is much more powerful.
To this day I still do not understand why board members feel okay with selling tickets to events, but it would be a cold day in you know where before they ask for an outright gift from the same person for the same amount to support the same organization. They think selling a ticket to an event for $2,500 is okay because they are giving them something in return. What they are missing is that by making that $2,500 gift outright Jack and Christine are getting something in return too. The donors get as much as they give. More, because they get an opportunity to be invited into a community of people who care about an issue that is meaningful in their community. That should be easier than selling them a ticket to an event, where there might be a b-list celebrity.
Experienced board members will tell you it feels a lot better to ask someone to become a part of your mission than to sell them a ticket to an event, where the “big get” is great food, a couple of celebrities, a live auction, and an open bar.
The last problem and the biggest are that special events are not properly handled and managed by the organization. If the purpose of the special event is to familiarize people to the organization to make them friends and potential donors then the organization needs to have a plan to follow up with each attendee, which in my experience is seldom done. The only follow-up is usually the next year when they are asked to buy another ticket.
Your organization should never have a special event without knowing and having in writing, in advance, the objectives you hope to achieve. In addition, there must be an indication of what type of follow-up is required. Should there be a thank you note, a request for funds, or an invitation to serve as a volunteer? There should be some outcome that is considered achievable and worthy of the time and energy that goes into developing this type of activity. Shortly after the event, probably no more than a couple of weeks following the program, a small group should meet to make an evaluation of all critical factors of the program and the event.
Though special event fundraising is important, and arguably the most visible annual interaction an individual will have with your organization, as stated earlier, the return on investment (ROI) can be low as industry standards point to the cost to raise a dollar not exceeding $0.50. Furthermore, the costs associated with staff time can be even higher. Therefore, consider implementing a relatively simple major gift strategy for the attendees that can set forth a plan to boost the effectiveness and ROI of a special event.
Remember, if someone has taken the time to attend your event, it means they have at least some interests in your organization’s mission. A strategic major gifts approach will help turn your event from simply “elementary fundraising” to hopefully “friend-raising” by capturing new major gift potential.
Without this strategy, “the what happens next” your board is just stuck in the ticket mentality of fundraising. Executive Directors we need to do better job training and orienting our boards regarding their roles in nonprofit organizations and major gift fundraising is one of their prominent responsibilities. Hope this was helpful and good luck with your future special event fundraising.
Good Luck!
Ron Huddleston President
