People celebrating at an event

Events 101

If you want to host an event solely to raise money, you are wasting your time. Events are the least cost-effective way to raise money, but hosting a fundraising event for your nonprofit is a fantastic way to raise both awareness and tap into financial resources that might not otherwise be available through other avenues.  This type of activity typically requires a lot of front end investment but you can generate a high amount of revenue if you do it properly.

NonProfitLibrary.org offers a plethora of resources to assist you with executing a successful event.  

Planning your event properly is key.

There are several pieces to the planning portion of the process and one element is your event budget, which is an estimate of costs:

  • You need to know your financial goal and with it, projected revenue and expenses. Not only is a budget important as a road map, it can help you calculate your overall goal. It includes both actual income and expenses, but also in-kind donations.
  • The value of donated items requires an FMV – fair market value – in order to properly provide the information for a tax-deductible donation to your donors.

There are different types of income for your event. Listed below are those types of activities and a suggested percentage for a revenue goal:

  • Sponsorships – Target: 35%

    It is optimal to have an existing relationship with potential sponsors before asking them to support your event, so create a prospect list of those businesses you wish to develop a connection with and start working on creating a rapport well before the event. Do not forget your own vendors.

Be sure to start your solicitation of sponsorships early. Businesses take longer to make decisions than individuals. They also typically have a budgeting cycle to consider. Your sponsorship is likely to be higher if taken into consideration at the time the budget is being created. Ideally you will finalize your sponsorship packet in September to properly approach those making budget decisions in the last quarter

  • Ticket Sales – Target 20%

    Be certain to count all costs associated with this line item.  For example, always check the cost per person provided by your caterer.  This is not just the cost for the food but the labor, supplies, corkage and gratuities that are part of the quote.

  • Auction – Target 15%

    By working with your board members and businesses, you can secure items like vacation homes and packages that contain fun items for donors to bid on. Volunteers are a great help in reaching out into the community for donations. Seek the assistance of a benefit auctioneer. This may seem like a large expense, but having the guidance and talents of a true professional is likely to dramatically increase revenue and cover any costs of the auctioneer.

  • Paddle Raise – Target 20%

    A great practice is to use a story conveying your mission and a successful outcome just prior to the paddle raise. The moment before the paddle raise should be the emotional highpoint of the event. It is also helpful to include a donor’s matching donation for this portion of your event. Once again, a professional benefit auctioneer can make all the difference in reaching goal.

  • Other activities – Target 10%

    This can include your raffle prize, program ads, games, and miscellaneous donations received in response to the event.

Each event will have individual and unique expenses associated with it. A recommendation is to use ticket sales and sponsorships to cover the costs of the event and then all other funds raised become the net revenue raised. 

For example, here is a breakdown of potential revenue targets to reach an overall financial goal of $100,000 with expenses projected at $55,000:

  • Sponsorships – $35,000
  • Ticket Sales – $20,000
  • Auction – $15,000
  • Paddle Raise – $20,000
  • Other activities – $10,000

This could lead to a net revenue of $45,000. As long as you have the expenses covered, all funds raised become your net profit.

In closing, knowing what your ultimate destination is (aka your target financial goal) helps you create a road map of options to reach that goal. By doing the work of mapping out the plan at the start, you can focus on executing a successful event that will please your guests while supporting the important work of your nonprofit. Of course, you will not be in auto-pilot mode but it will certainly open up some much needed mental space so you can engage with your guests so the ultimate success is a fun event.

RESOURCE LINKS

https://nonprofitlibrary.com/product/creating-a-nonprofit-event-budget/?subscribe=yes

https://www.nolo.com/legal-encyclopedia/how-value-noncash-charitable-contributions.html

Virtual gathering

Seeking Sponsorships and the Art of the Ask

Navigating the ‘ask’ for corporate investment in your event or programs has always been a tricky effort but now we are mired in a pandemic.  Does that mean a nonprofit should give up on this type of financial support?

The short answer: no.

Just like with any fundraising activity, it always comes down to this cornerstone principle: it is all about the relationship. Be honest with your sponsors about how you are navigating these times of uncertainty.  Although it may not be a wise moment to ask for a financial gift from your corporate partners, it surely is the perfect time to just check in with them. Just like any relationship, it is good to keep in touch.  One piece of advice shared is the worst thing you do is to do nothing. Send your partners a note to see how they are doing and to thank them again for previous support as it is allowing you to continue to provide much needed services during this critical time. 

This may prove to be the perfect time to hone your impact data to make an even stronger case for support.  Perhaps your nonprofit can create a special COVID-19 service program to better support the community you serve and your corporate partners can engage in that program. 

Another suggestion is to double down on the public recognition of our corporate sponsors from previous years on LinkedIn and your monthly e-newsletter.  One of the main reasons why for profit businesses sponsor events is to raise awareness of their support of the community.  It also helps raise brand awareness for the company. There’s nothing like a social media shout out by staff, board, and key volunteers to help a corporate partner feel appreciated. But keep in mind this important information provided by Classy.org:

Sponsors can be recognized by the organization, but this recognition must not endorse the sponsor’s product, use comparative language, or mention price information. Once you cross into advertising for the sponsor, the contribution becomes taxable income.

Look at programming collaborations with other nonprofits.  In that case, you can ask for a large dollar amount that will go twice as far when it comes to impact. Engage your corporate partners in conversation about how you can collaborate with them on more effective ways to leverage their investment during these times. Perhaps exploring a virtual event may just be in order.  

However, if a virtual event is not feasible, consider postponing the event altogether while you regroup on the next best steps.  Perhaps engaging your corporate partner in a new and clever way to leverage the purpose of your event. 

Of course, your sponsors may still pull their support due to the changes.  Be proactive and seek alternative corporate partners who may be more aligned with the current environment and willing to be more innovative in supporting your nonprofit. As always is the case, look at the synergy between your mission and the company’s focus of service. Be very aware of potential conflicts of interest, too. Keep in mind that many corporations require employee support of a nonprofit before they will donate the big dollars, so be sure to check in with their human resources department or designated employee to find out the company’s process of working with nonprofits. 

RESOURCE LINKS