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Dec 29, 2012

Are fundraising galas “ridiculous”?

Seth Godin has created a stir in the discussion groups for the Stanford Social Innovation Review and Chronicle of Philanthropy by saying a gala “is a ridiculous way to efficiently raise money for a good cause.”   While participants in the discussion groups were on both sides of this argument, I think the main point of disagreement is whether donors like this mode of fundraising and whether the nonprofit is “making money” through the gala.

I personally see donor fatigue.  Filling a table is time-consuming; losing evening family time is discouraging.  In the chapter “More Than a Party” in my book More Than Just Money, I wrote “Before you plan your next gala, I have a suggestion: Ask your major donors what they most want from you.  Don’t be surprised if their answer is: ‘What’s most important to us is not your party but your effort to keep us well-informed of what you are doing and how you are doing financially.'”

Fundraising techniques come and go.  The gala/auction has been duplicated by so many nonprofits that the silent auctions are same old/same old.  Even more tiresome, there is often a season during which there are 2-3 events per week.

The biggest issue I see for nonprofits is whether the event expands annual fundraising.  I have seen in some cases a dip in annual fund receipts during the months in which staff shift their time to gala planning and away from donor outreach.  And I have see expenses exceed income, especially when paying fees for a keynote speaker or performer. The net outcome can be even more negative if one counts volunteer time spent on gala planning instead of on other activities of the nonprofit.

A new trend I see to address both the donor-time and net revenue concerns is the breakfast event:  maximum 90 minutes; guaranteed start at 7:30 am and adjournment at 9:00 am.  Table captains hand out multi-year pledge forms.  The cost of a breakfast is modest; the time demand on donors does not unduly interfere with business or family demands; and the multi-year pledge builds a mailing list and produces some income predictability.  But soon this type of event will be duplicated by too many nonprofits and it too will lose its effectiveness and appeal.

When I question nonprofit development officers about this, the response I often get is that the event is “friend-raising” that will pay off later.  I would like to see some data that documents whether the “guests” that are recruited by table purchasers to fill their tables ever become significant donors.  Given the appropriate focus on metrics for program effectiveness, I would like more nonprofits to develop and track metrics on fundraising effectiveness, especially for special events.  If they did, and they were honest about it, I wonder how many gala invitations I would still be receiving.

As a donor, I would much rather get more information as I move up the donor categories rather than move up through attending another gala.  What  I as a donor would like to hear is spelled out in Chapter 19 “Informing a Nonprofit’s Constituencies” in Linking Mission to Money.