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Event Fundraising: 3 Metrics to Measure ROI

As a fundraiser, events can be the smelly little brother you love: they’re often annoying, but there can be moments of magic where you feel the energy in the room, exceed your goal, and feel the unconditional love that reminds you it’s worth it.

The pandemic forced nonprofits to hit the pause button on most events. With COVID-19 restrictions lifted, nonprofits are returning to this tried-and-true template. It’s not surprising. Events are fun and social – something we’ve lacked for the last 2 ½ years so it can be very tempting to want to return to “normal” and go back to what might have been working before.

But was your fundraising event really working?

Industry data shows that events cost an organization 50 cents for every dollar raised, making it the most expensive form of fundraising when compared to annual giving, major gifts, and corporate and foundation giving. Despite the lackluster return on investment, many nonprofits, board members, volunteers, and organizational leaders still focus on event fundraising.

The pros and cons of fundraising events

Events provide a familiar structure that is easy to understand: invite attendees, throw in some honorees, provide an opportunity for people to give during the event, and then close the evening with drinks and dancing. Follow that up with a thank you note and start planning the next event.

After an event, everyone feels good because something tangible has been completed. You can check the box. It’s all very black and white.

What isn’t black and white is measuring the impact of that event on your mission or understanding the opportunity costs of devoting so much staff time and resources into an event.

If you are an event planner, you know how much attention goes into logistics and follow up. If you’re a frontline fundraiser asked to add event planning to your plate, you can appreciate how time-consuming it can be to manage things such as guest lists, catering, or securing items for a silent auction. The list goes on.

Separating a donor’s interest in the event from the organization is also a challenge. Are they there because they want to support your mission, because they are connected to the speaker/honoree, or because they heard it was an open bar?

For these reasons, events are usually better suited as stewardship opportunities, not fundraisers. Stewardship events are less transactional and provide opportunities to carry the goodwill of the event into sustained fundraising efforts.

Measuring event success

Return on investment should be your top priority when evaluating the success of any fundraising event.

Unfortunately, calculating ROI isn’t always easy. It is often better to evaluate events and other development operations together as part of a comprehensive development assessment to understand exactly how they fit into your overall fundraising strategy. If this isn’t possible at your organization right now, there are ways to begin measuring event success separately.

To assess how your events are working, consider how they have impacted your organization in these three areas: your team, your budget, and your goals.

Impact on your team

The Great Resignation taught us just how much burnout was impacting the nonprofit workforce. It is no secret that events require extra time and effort from staff, so if your team is already feeling burnt out, be mindful of what you’re asking your team to take on.

Here are some questions to help you consider an event’s impact on your team:

  • Do you have the staff to execute an event, or do you need to outsource to avoid overworking people?
  • What is the priority for your team and what are you asking people to add to their plates?
  • Does the event pull frontline fundraisers away from other development work?

If the answer is to continue with your event, what components can you keep and what can you update, modify, or remove? Perhaps instead of one large 500-person gala, your organization wants to think about having smaller, regional events hosted by volunteers. Or perhaps you don’t need the silent auction but want to invest your staff’s time in the live auction for experiences that provide a better ROI.

Impact on your budget

While it is easy to focus on the total amount raised minus direct expenses, events come with hidden costs that should also be considered.

To accurately capture the true cost of your event, consider these questions:

  • Is the event bringing in revenue or is it an expense for your organization?
  • Is the goal to raise money or to steward donors? If the goal is to raise money, is the event raising money?
  • How much staff time goes into the event? Are you putting a dollar value on the hours your team invests?
  • How has revenue changed over time? Are dollars raised growing enough to keep up with costs?

Impact on your goals

While revenue from ticket sales, auctions, and sponsorships are easy to calculate, measuring an event’s impact on your long-term fundraising goals is much more complicated.

Here are some questions to help you understand how the event fits into the big picture:

  • Is the event a good way for you to engage new prospects?
  • Is the event facilitating sustained fundraising efforts, creating new opportunities, or providing stewardship opportunities?
  • How does the staff time spent on events compare to the ROI of time spent on other fundraising efforts?
  • How do you steward donors who made their first gifts at the event so that they will consider renewing their contributions the following year?
  • How do you retain event donors who may only know of your organization through the honoree?

Data is a very valuable tool in assessing whether events are net positive and whether they are helping you reach your goals (whatever those goals may be). Make this information available to your leadership so they aren’t just relying on gross numbers when making decisions.

Wrapping Up

To be clear, events can serve a valuable role within your fundraising toolkit. Comprehensive reviews, such as development assessments, can help you calculate the true impact of your events and place them appropriately in your overall fundraising strategy.

So, are fundraising events worth it? Are they propelling your mission forward? Or are they simply a way of getting back to business as usual?

These are essential questions to ask. We can help you think through the answers.