Are You Getting Worthwhile ROI from Your Events?

This article from The Chronicle of Philanthropy is quite good. Although I was not primarily an event fundraiser, staffing cuts eventually left me directly in charge of a major annual gala (whereas I had previously been one level removed, having a direct report who supervised the event.). Even before I assumed direct responsibility I was painfully aware of one of the unpleasant aspects of events: Usually you only hear complaints, and lots of participants have lots of strong opinions which they are very happy to share, often with rather less sensitivity than they might normally bring to a conversation. I found events to be rather like publishing annual reports of donors: The best you could hope to do was not to tick too many people off.

One of the things I like about the author’s suggestion is that this framework can be applied proactively rather than reactively, which, for me, softens the blow of “feedback.” It also serves to (try to) keep participants focused on improvements and solutions, rather than blame.

Beyond this, the article got me to thinking once again about something that never sat well with me – the typical assumptions made about the value and impact of events beyond their direct financial impact. Everyone knows that events are an extremely “expensive” form of fundraising. At my old independent school, the “real” net income from our annual gala auction, after expenses and salaries (that’s right, I always included the cost of staff, which sometimes gets excluded from the calculation) ended up being only about $25,000 per year.

When this fact was pointed out to leaders (Head of School, board members, influential parent volunteers), the typical responses included well-known “axioms” about the importance of friend raising, getting parents involved as volunteers, etc. Another frequent claim, which relates to the point I want to raise here, was that getting people to give via the auction was a “gateway” to additional giving, particularly to the Annual Fund (which is extremely important in the independent school world, since at most schools it fills a planned hole in the annual budget – the so-called “gap” between tuition and the actual cost of educating a student).

Even though the auction itself was not very lucrative, how could anybody argue with getting new donors?

As it turned out, this anecdotal connection between the auction and other forms of giving turned out to be purely anecdotal.

As in 100% anecdotal. As in 0% true.

I had relatively limited data, but when I looked at the three-year period for which I had complete information, I discovered something quite shocking: The top 20 auction donors (a subset of whom were the lead volunteers) had given, over the same three-year period, a grand total of $0 to the Annual Fund.

That’s right, zero.

I am not making any universal claims about the connection or non-connection between event giving and other forms of giving. I should think this case was at least somewhat unusual. What is more, your organization’s event may produce relatively excellent net fundraising results. A cost of 30 cents per dollar raised (assuming it counts salaries) is pretty easy to swallow when your event grosses $1,000,000. However, what I am suggesting is that it would be worth a bit of time and effort to try to analyze the larger ROI of your events, especially if you are not seeing significant direct financial returns.

When I build custom predictive models for clients, I always look closely to see if there is a statistically and practically significant correlation between event attendance and overall giving. Even if you can’t carry your investigation that far, consider simply looking at your large event donors and their event giving vs. direct (non-event) giving, and see where the information leads you. What would you do if you found that your events provided minimal direct and indirect ROI?

Brandon Ferris
Senior Director of Strategic Services and Fundraising Counsel
Zuri Group


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