Lindsey Rosenthal (@eventsforgood) is the founder of Events For Good, a social entrepreneurship company which assists nonprofits and other companies in the creation and strategy of fundraising, charitable, and other special events. Lindsey has a bachelor’s degree in hospitality management and a master’s degree in tourism and nonprofit administration. She loves to travel and spends her time following childhood dreams and learning from incredible people. We asked her to share her wisdom on a crucial topic for NPOs: Understanding return on fundraising events.
Event professionals have always had to deal with the pressure to please. More specifically, they have had to justify what their event is worth to event producers, executives, sponsors, and the public. Not everyone is able to see the inherent value. Especially in the post-AIG-retreat era, it has become vital to have evidence of your event’s value. This is especially true for fundraising events. However, defining a return on investment (ROI) is more complicated with fundraising events than just finding the difference between your revenue and expenses. The question about return on fundraising events (ROFE) lies in its definition. What factors need to be taken into account that are left out of its sister equations? And how should your producers, sponsors, and executives be viewing their investment?
There are several key factors that are included in the ROFE equation other than profit. These benefits are often overlooked, but need to be considered when debating using an event as a tactic versus other fundraising activities.
ROFE = (Revenue – Expenses) + Public Awareness + Donor Cultivation
- Profit: This is easy to define. The dollar amount that an event can raise is often significant; however, the costs associated with the time involved in its planning can be plentiful. Not every event is going to be a Komen Race for the Cure. But, unlike other fundraising activities, pure profit can come from sponsorships, ticket sales, donations onsite, or auctions.
- Public Awareness: Unlike a direct mail campaign, the visibility of an event is much greater and gives your cause or organization access to media channels, positive publicity, greater understanding of your mission, and the ability to educate the public. You can create and sustain a brand identity. You can broaden the scope of your outreach. You can entice the public to become donors and attendees in the future.
- Donor Cultivation: Events produce opportunities for volunteers to take on active roles, development officers to care for donor relationships, and introductions to be made for new prospects. An event can be a reward for members or a way to create, find and nurture affiliations. Some are more likely to give to the charity by buying a ticket than giving outright cash – a social benefit that alters behaviors. It is much easier to convert a ticket buyer into a donor than entice someone with no existing affiliation.
Your return lies in your attendee’s ability to remember, to connect its importance. Events offer a personal benefit, a motivation for people to relate to other than the cause. Events provide an outlet for social opportunities. Events open up streams of income that other fundraising methods cannot.
Profit can’t always be the sole reason to plan an event. Sometimes we need to open our eyes and see how a current solution can provide a future benefit. Events offer the chance to create and maintain relationships, and in all business, there really is nothing more important.