Which Fundraising Event Is Best for Your Nonprofit?
IndustryView | 2015
Major fundraising events can generate significant revenue for nonprofits—but they require careful planning and higher upfront costs than non-event fundraising campaigns. To learn more, Software Advice surveyed nonprofit event planners, asking questions about the planning ease and return on investment (ROI) for eight types of special events, to help fundraisers determine the best event for their nonprofit’s size and budget. This report highlights our findings.
According to the research group Nonprofit Research Collaborative, event fundraising is quite popular: 82 percent of nonprofits host galas, golf tournaments, competitive races and other types of events to amass contributions and raise awareness for causes.
Major events, however, require more marketing and upfront investment than passive fundraising methods, such as direct mail and email campaigns—so the stakes are higher from the get-go. This is even true when using software that cuts costs and hours of administrative work, such as online registration, donation and pledge management applications.
“[Another] problem is that events are usually transactional, rather than transformational—meaning they focus on entertainment to secure a one-time donation, instead of education, which turns guests into long-term supporters,” explains Katherine Wertheim, Certified Fund Raising Executive (CFRE), seasoned fundraiser and principal at Werth-It Consulting.
“By the end of an event, guests should be able to tell you about the nonprofit, its cause and why they should care about it. If they can’t do that, you’ve missed out.”
This larger demand on resources and the necessity to create an educational experience means the event you choose must be the right one for your organization. We gathered insights from fundraisers who have planned at least one major event in the past year to determine which events are the best fit for a nonprofit’s size and budget.
First, we asked respondents how difficult eight types of major events are to plan, and the typical ROI for each. Overall, our data shows that fun runs and walks are both the easiest to plan and deliver a high return on investment.
This is especially true for midsize and large nonprofits with annual operating budgets of $6 million or more. Fun runs are not as easy for smaller organizations to pull off and do not deliver as high a return, but they are still a good choice for nonprofits with lower operating budgets.
(Note: Fun runs and walks do not include marathons, half-marathons, 5Ks or other high-profile race events. In our survey, we defined fun runs and walks as races that did not require special permits or road closures—for example, elementary school students using the school’s track, or groups using an existing park or community trail for a run/walk event.)
The diagram below plots events according to their ease of planning and ROI, by organization size.
Compared to midsize and large nonprofits, all types of events are relatively difficult for small nonprofits to plan, and they generate a modest ROI. This is not only because small nonprofits have tighter budgets, but also because their largely volunteer-based staff may not necessarily have event planning experience.
Susan Whitmore, vice president of development for behavioral health nonprofit First Call, says that planning the organization’s first special fundraising event was a learning experience—especially because it was also the first major event she’d ever planned. The event, Celebration Evening, includes dinner, a keynote presentation and an auction.
Over the course of four years, Whitmore and the planning committee gained experience and implemented auction tracking software, which tracks bids and processes payments, and thus the event became more profitable. In fact, net revenue grew from just under $5,000 at the first event to $32,000 at the most recent.
“In 2014, we used auction software for the first time,” says Whitmore. “The auction tracker piece sped up checkout, and it was a better experience for both staff and guests.”
Previously, auction winners’ transactions and prize redemptions were processed manually. After implementing auction software, event staff could pull up a bidder’s profile to view a list of all items won, process a credit card payment and automatically generate a receipt on the spot.
Lisa Bennett, co-founder of fundraising software company DoJiggy, says there are nonprofit software applications that help organizations balance human resources and budgets.
“Many hands make light work,” Bennett explains. “Online registration and donation tools relieve staff and volunteers from many hours of data entry by letting attendees sign up, pay registration fees and make donations themselves.”
Justine Siegal is founder and executive director of Baseball For All, a nonprofit that empowers girls through baseball programs. She learned firsthand how time-consuming event registration is while planning the U.S.’s first national girls’ baseball tournament in 2015, and is considering implementing software to support registration for next year’s tournament.
“We’ve been using checklists in Excel, and it has taken tons of time. Then [a month before the event], my computer crashed, and I was afraid I lost all that brain work,” says Siegal. “As I go through the steps, I can see that there has to be a better way, and how putting the [registration] power into parents’ hands will make life easier.”
Next, we asked respondents what the average CPDR was for each type of event. Dollar for dollar, a-thon events (e.g., walk-a-thons, bowl-a-thons and bike-a-thons) incur the fewest costs. This makes them a good option for most nonprofits with small budgets that want the most bang for their buck.
On the opposite end, concerts and other types of live entertainment events have a very high CPDR and substantial upfront costs, making them more suitable for large nonprofits with big budgets and experienced staff.
No matter what type of event, Werth-It Consulting’s Wertheim says, making one change in your ask can have a tremendous impact on revenue: pledging future donations, rather than just one-time donations on event day.
A case in point: Wertheim and her partner planned a free luncheon for Ventura Botanical Gardens, to which 38 volunteers invited 500 people. The event cost approximately $81,000 to host, raising $130,000 in cash on event day. This would already be considered successful—but Wertheim also educated guests about why their support was important to the community, and asked them to pledge subsequent donations over the next five years. These pledges resulted in an additional $470,000, and a 640 percent ROI.
Whether a brunch, gala, fun run, bowl-a-thon or concert, asking for pledges can multiply total contributions. And when using fundraising software with pledge management functionality, processing pledges does not require more work than processing one-time contributions.
This software can track and process pledge payments, send reminders to donors and auto-generate receipts and acknowledgement letters. Meanwhile, manual pledge management involves searching through constituent records, typing in credit card numbers and creating and sending receipts by hand.
Nonprofits use numerous metrics to gauge an event’s success. CPDR—the total expense of an event divided by the total amount raised—is the most popular; used by 83 percent of respondents.
According to consultant Kathryn Hall in a post for nonprofit blog npENGAGE, fundraisers should track, at the very least, the total amount of contributions raised, expenses and the number of attendees for events. These metrics can be calculated and tracked manually in a spreadsheet, or with pen and paper and a calculator—that is, as long as they’re small events.
For larger events with many moving parts, or for recurring events that an organization wants to continually improve on year over year, performance analysis demands more data. That’s where fundraising and event management software—more specifically, the reporting tools and dashboards these products typically include—can make a fundraiser’s life easier.
Reporting dashboards keep every stakeholder on the same page with a real-time, 360-degree view of event details. Planners can see completed tasks, attendance and transaction numbers, goal progress and, in some cases, event-website analytics at a glance.
Finally, we asked respondents what tools and methods they use to collect fundraising-event data (such as the number of attendees and donation amounts). Spreadsheet programs, such as Microsoft Excel and Google spreadsheets, are the go-to tools for 84 percent of our sample. This makes sense, given that such programs are affordable (or even free), easy to obtain and familiar to many people.
Nearly half of respondents (47 percent each) rely on event planning software and handwritten records, while 41 percent use fundraising software to track interactions and details around major events.
What’s interesting is that manual data-tracking methods are used more frequently than software-supported methods, which automate processes and save many hours of administrative work.
Manual tracking can be effective for highly organized people. Generally, however, the larger the event and the more staff and volunteers needed to manage it, the more crucial software becomes to ensure an event goes off without a hitch.
For example, a team of five that is in charge of planning a gala for 500 guests would benefit from using event software. Itinerary, floor plan, table layout, budget and time tracking and contract management functionality—commonly offered in event software platforms—can be used to fine-tune functional details and streamline communication.
Planning the same event manually requires tracking the same types of information—only floor plans, budgets, contracts and such are likely to be in paper form, or stored digitally in different places that might not be accessible to entire team. In this scenario, communication and collaboration is slowed and there is a higher chance of overlooking important details.
Budget is often the determining factor for what type of event a nonprofit chooses to host. Regardless of organization size or budget, however, fun runs or walks and a-thon events rank highly for planning ease, affordability and return on investment.
No matter what the event, there are things fundraisers can do increase contributions and simplify planning, including:
Plan transformational events. Educate attendees, ensuring each leaves with an understanding of the organization’s cause, why it’s important and what they can do to help.
Ask for pledges. Multiply contributions by asking attendees for annual pledges, rather than just one-time donations.
Use fundraising and event planning software. Reduce staff and volunteer workload by using software applications that support communication and collaboration and automate common tasks.
In our sample, 43 percent of respondents represent small nonprofits, 35 percent midsize nonprofits, 12 percent large and 9 percent are not sure. Moreover, respondents represent nonprofits in a variety of sectors, with the largest percentages in education (22 percent), human services (22 percent) and health care (19 percent).
To collect the data in this report, we conducted a two-day online survey of 15 questions, and gathered 99 responses from random event planners within the U.S. We screened our sample to only include respondents who planned at least one major fundraising event within the past year. Software Advice performed and funded this research independently.
Results are representative of our survey sample, not necessarily the population as a whole. Sources attributed and products referenced in this article may or may not represent client vendors of Software Advice, but vendor status is never used as a basis for selection. Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.
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