Are Fundraising Events Worth It? (We Did the Math!)

We love a good party as much as anyone. Who doesn't enjoy the vibrant ambiance, the camaraderie, and the shared excitement of a fundraising event? They are filled with laughter, positive energy, and the genuine human connection that makes philanthropy a joyous endeavor.

However, when we put on our practical hats and dive into the financial analysis, it's worth asking the question: Are these events the best use of resources for your organization? Are they worth it in terms of ROI? Let's do some math and find out!

The Cost of Fundraising Events

First, let's look at the costs associated with a typical fundraising event. There's the venue, the food, the entertainment, and a whole list of other expenses that can quickly add up no matter the size or scope of your event. According to a study by the Nonprofit Research Collaborative, the average cost to raise a dollar through a special event is 50 cents. That's a 2:1 return on investment. Sounds good, right?

On paper it’s not terrible, but we're just getting started.

The Hidden Costs of Fundraising Events

What about staff time? If you have ever personally planned a fundraising event, you know that the amount of work that it takes can really sneak up on you. The hours spent planning, executing, and following up on an event are extensive. Let's say your event took 200 hours to plan and execute, and your staff's average salary is $25 per hour. That's an additional $5,000 in costs. Now your ROI is looking a little less exciting.

And then there's the opportunity cost. While your team is busy planning and executing the event, what other fundraising activities are they not able to focus on? Building relationships with major donors, for example, could yield significant returns over time but requires dedicated attention and resources.

The Power of Major Gifts

So, what if we shifted our focus from fundraising events to cultivating major gifts? Major gifts, often defined as donations significantly larger than a donor's typical contribution ($50,000+), offer an alternative approach to fundraising that can yield impressive results.

Consider this: The Association of Fundraising Professionals reports that the average cost to raise a dollar through major gifts is just 10 to 20 cents. That’s an ROI of 5:1 to 10:1 — significantly higher than the ROI for events. We would even argue that if done correctly then it could be even more than that, oftentimes around 3 to 8 cents to raise a dollar, which could be an ROI of more than 30:1. Not to mention, it's an approach that can continue to yield returns over time as you nurture and deepen relationships with your major donors without becoming a “party planner”.

The Magic of Relationship Building

The real power of major gifts fundraising lies in its emphasis on relationship building. By investing your time in getting to know your donors, understanding their passions, and aligning their interests with your mission, you create a partnership that can yield significant returns over time.

Indeed, fostering these relationships may not provide the instant gratification that a successful “party” can, but the long-term payoff can be much greater.

A Gentle Suggestion

This is not a call to completely abandon fundraising events. They can certainly have their place, serving as a great tool for community engagement, donor recognition, and bringing awareness to your cause. They can be fun, exciting, and rewarding in their own right.

However, we encourage you to take a close look at your fundraising strategy. If your organization is heavily reliant on events, it might be worth considering a shift in focus towards major gifts. Start small, allocate some resources to this approach, and see how it impacts your bottom line. If done in the right way, the results will shock you. And remember, if you are going to do fundraising events, make sure to do them correctly.

We're also not saying that is an easy shift, but we are saying it could be worth it. After all, the math doesn't lie. Remember, it's not just about the funds you raise today, but also about investing in the sustainable, long-term financial health of your organization and the cause you care deeply about.

So, are fundraising events worth it for you? Crunch the numbers, and you might just redefine your fundraising playbook!

Feel like you are stuck in an event based fundraising program? Or are you not getting the results that you want? You’re not alone! And that’s what we are here for. Send us a message and we would be happy to talk with you to see how we can help!