by Melinda Kuth
Abridged from a longer article
Benefit events are notorious for their intense demands on staff and volunteer time, and yes, there is heavy competition for both time and dollars out there, but concentrated planning and execution can make the returns on a benefit worthwhile for your organization.
Here is some food for thought: A benefit event can be worth much more than the money it raises, if it makes it easier to raise more money!
Non-profits hold events for a variety of reasons, but the number one reason is to raise funds for the organization. Some events may not be designed to make money, and they may even cost money (for instance, a volunteer thank-you party). Many organizations host events with the sole purpose of "friend-raising" and generating good will toward the organization.
If your organization's goal is to "friend-raise" or increase visibility in the community, do you hope that the good will and visibility generated from the event will, at some point, increase financial support for your organization, right now or in the future? For most non-profits, events are ultimately about bringing in more funds to the organization.
The advantage of a hosting a benefit is that it can raise funds for an organization and meet the objectives of "friend-raising" including increased awareness, identifying new volunteers, and celebrating accomplishments. A benefit event can be worth more money than the money it raises, if it makes it easier to raise more money!
So how can benefits event make money, AND make it easier to raise more money?
Making a benefit event a part of your overall plan will enable your organization to take full advantage of the goodwill, publicity, and new and renewed interest that a benefit can generate. If a benefit event is NOT part of an overall fundraising plan that provides a way to follow up on that energy and interest, a large part of the "benefit of the benefit" will be lost or diluted.
Benefit events can (and should) be a fun, exciting way to introduce new supporters to your mission and reinforce relationships with current supporters, but successful events don't just happen, they take time, research, planning, and lots of detail work. Benefits can be costly in terms of staff time and volunteer hours.
If your sole purpose is to raise money, take a look at your current fundraising strategies. Do you have an annual fund plan in place? Are you currently soliciting individuals, corporations and foundations and government sources at their giving potential? If so, great! Consider looking at how a benefit event can complement and augment those activities. If not, you may want to seriously consider putting staff resources and volunteer energies into developing a fundraising plan that provides a solid donor base before you go ahead and put the resources and time into a benefit event.
Benefits are intense fiscal projects from start to finish. It is the role of the board of trustees to approve the benefit's financial goals. Financial goals aid participants in defining success, and achieving a sense of reward and accomplishment at the end of the event. An often-quoted rule is that benefit events should net at least 50% of the total expenses. If the event is new to the organization, it may not meet the 50% goal the first year it is held. That is not necessarily a reason to abandon the event, but do complete a detailed evaluation to determine if the event met its other goals, and maximized staff and volunteer resources. If the event is not reaching the 50% goal after the third year, it should be set aside for another benefit event or fundraising activity that can deliver at a higher level.
When you prepare an initial budget, it forces you to think through the entire project in advance. As you begin to compare estimated expenses with projected income, you may find the initial numbers are not what you hoped they would be. You may even conclude that the benefit event is unworkable, and that you are better off putting the time and energy into another fundraising project. More likely you will need to adjust and play with the number to come up with expenses and income that will meet the financial goal.
Your budget is final arbitrator for your plans for the benefit event. It will determine the type of event, the site, entertainment and the food you serve. Always prepare a detailed budget in advance, and stick to it. An accurate and conservative budget is the best insurance for meeting your financial goal.
If your organization is new to events, you may want to start the budgeting process by estimating expenses. Use as many actual quotes as possible and estimate the rest. This process will also help you identify potential areas for underwriting. For repeat benefits, look at previous budgets for ideas and estimates. Don't accept these numbers at face value, however. Do the research to find out about postage increases, fee changes, etc.
Unfortunately, there are not absolutes or exact formulas when it comes to estimating income. Ticket prices are often broken into two or three pricing categories. Ticket sales will most likely follow a pyramid shape, with the largest numbers of buyers at the base of the pyramid at the lowest price, and the highest price buyers representing the smallest portion at the tip of the pyramid.
Events offer excellent visibility and sponsorship opportunities for corporations. This excellent article by Rebeca Mojica gives a 9-step guide to soliciting and acquiring corporate sponsors.
Follow-up with your new contacts
How will you follow up with any new donors, contacts or volunteers that came to the organization through the event? Remember: "a benefit event can be worth much more than the money it raises, if it makes it easier to raise more money." It sounds obvious, but make sure the benefit attendees and volunteer names are integrated into your database so they receive regular mailings/updates about your organization. Personalization of any correspondence (an added note with a newsletter, etc.), especially within six weeks of the event, will help build the relationship. If you are able to segment your data, you may want to send a special annual fund letter mentioning their support of the benefit. Don't forget to ask for email addresses, especially from volunteers. Although the volume of email is increasing for all of us, it is still an inexpensive and fast way to disseminate information, and provide a feedback loop for the organization.
Melinda Kuth is an experienced event planner for both corporate and non-profit clients such as The Plain Dealer, the Rock and Roll Hall of Fame and Museum, the Gund Arena, and The Cleveland Play House.
Benefits Mean More Than Money (Special Event Fundraising) by Melinda Kuth
When are Events Good for You by Sasha Daucus