Kent Stroman, CFRE recently joined us for a webinar in which he helped us determine if our fundraising events are truly cost-effective, and how we can use these events as a way to fill our pipeline of prospective major donors.
In case you missed it, you can watch the full replay here:
Steven: Okay. Still there, Kent?
Kent: Yes, sir.
Steven: Great. It looks like it’s working. Cool. Well, with that, my clock just struck 11:00 a.m. in the Eastern time zone. Do you want to go ahead and get started officially?
Kent: Yeah. Let’s do it.
Steven: All right. Cool. Well, good morning, everyone. I guess everyone is in the morning because this is a special 11:00 a.m. edition of this week’s Bloomerang webinar. So, thanks to all of you for being here today. Hope your day is off to a good start. If it’s not, it’s going to get a lot better because today’s presentation is going to be really fantastic. I’ve been looking forward to this one for a while. Today we’re going to talk about “Fundraising Events & Major Gifts: How Do We Get from One to the Other?”
My name is Steven Shattuck and I’m going to be moderating today’s discussion as always. So, thanks to all of you for being here. Just a couple of housekeeping items before we get started officially. I just want to let everyone know that we are recording this presentation. I’ll be sharing the recording as well as the slides once again later on this afternoon. So, look for an email from me in just a couple hours after the presentation concludes. You can share that recording with anyone in your office, your friends, your family, colleagues. You can watch it again as often as you want. So, just look for that a little later on.
As you’re listening today, please feel free to chat in any questions or comments right there on your webinar screen. I’ll see those, our guest will see those. We’re going to save some time at the end for Q&A. So, don’t be shy at all. Don’t sit on those hands. We would love for it to be a little bit interactive and have some fun towards the end.
Just in case this is your first webinar with us, welcome. We do these educational webinars just about every Thursday. In addition to that, Bloomerang offers some really great donor management software. That’s our core business. If you’re interested in that, if you want to learn more, perhaps if you’re in the market for new software, I invite you to check us out. You can get a video demo right there on our website. You don’t even have to talk to a salesperson if you don’t want to, to learn about us. So, check that out if you’re interested.
I want to go ahead and introduce today’s guest. He is Kent Stroman, CFRE. Hey, Kent, how’s it going?
Kent: Doing great. How about you today?
Steven: I’m doing good. Thanks so much for being here. I want to brag on you a little bit before we get going. Just in case you guys don’t know Kent, he’s definitely someone you do need to know. He is regarded as America’s asking coach. He has been working since 1976, involved in teaching and organizational leadership. He’s impacted countless organizations with his contagious passion for excellence.
He has worked his first 25 years in higher education. After that, he launched Stroman & Associates, which is his own little consultancy there. He works in fundraising, board governance, strategic planning and leadership development. He holds numerous credentials, including CFRE, which is certified fundraising executive. Author of a couple of books, one upcoming.
Today he’s going to be talking about how to bridge that gap between your fundraising events and moving those attendees into your donor pipeline. He’s got a really great book, “Asking About Asking.” I definitely recommend you pick that up. And he’s working on–actually, I guess it’s finished. It’s going to be coming out real soon, “The Intentional Board,” and that comes with a workbook.
Steven: It’s not finished? Maybe you’ll be working on that on your little vacation starting tomorrow. We’ll definitely keep people up to date. Well, Kent, I don’t want to take any more time away from you. Why don’t you go ahead and get us started, my friend?
Kent: Well, thanks, Steven. I appreciate the opportunity to connect with today’s audience. As you mentioned, our topic today is “Fundraising Events & Major Gifts: How Do We Get from One to the Other?”
Let me just give a real quick birthday shout out. I’ve got two friends who are celebrating their birthday today. One is Peter Newbury. Peter is a friend of mine, CEO of Dwight Mission. Happy, birthday, Peter. And then another, Steven, is one of our friends and colleagues at Bloomerang, Chris Painchaud.
Steven: Yes. That’s right.
Kent: I think Chris is turning 60 or 70 or something less than that today.
Kent: So, happy birthday, Chris. Actually, Steven, if you’ll take him out and buy lunch for Chris today and send Jay the bill, I’d appreciate that.
Steven: I will do that. No problem.
Kent: But with that, we’re going to cover two big questions today. Number one is how successful is our event and number two is so what? So, we’re going to go into some depth on that. I think everybody has handouts. Maybe afterwards we’ll have the slides.
But I’m just going to start with what I call the lament. I can’t tell you how many times I’ll get a call, often times from a development director, maybe a CEO, maybe a special events director even that says, “Kent, you’ve got to help me convince my blank–my board, my boss, my whatever–you’ve got to help me convince them that we don’t need to add one more special event.”
So, I’ll ask a few questions to a get a little bit more depth and insight into it. But here’s what I find so often. People feel like, whether they’re volunteers or professionals, they feel like they’re spending way too much time, effort and money to justify the result that comes from the special event. So, the big question is, “Should we be doing an event?” “Is it a fundraising event?” and, “How would we know?”
So, big question number one, “How successful is our event?” In order to address that, I’m going to ask that we just look at two different dimensions. The first one is the financial. The second one is non-financial. Now, you’ll immediately understand that this question coming from me indicates that my background is finance. I’m an accountant. I’ll just go ahead and make that confession early on. Yeah, I’m an accountant. So, it’s easy for me to look at the financial aspect.
Finances matter. Fundraising is about raising funds. But that’s not the only important dimension and it’s really not the most important dimension. But it is something that we to take a close look at. Financially, how is our special fundraising event, how is it working? And then in the areas outside of finance, how is it working?
So a theme that I want to share today and as we go along is I want to encourage everyone to see beyond, see beyond what? I want you to see beyond the present, maybe see beyond our heritage. See beyond what we’re always seen before and maybe begin to see what we’ve never ever seen.
So, with that, I just want to introduce five analysis tools. Steven, remind me. Do the participants already have these five handouts in hand?
Steven: Yes. Absolutely. There was an email sent out at 10:00 a.m. Eastern today from ReadyTalk and you’ll be able to download from that email if you haven’t already.
Kent: Okay. Perfect. So, I’m going to be making reference to these. There’s really a lot of detail that’s involved. But whether you’re looking at it from an overall standpoint or digging way down deep, we’re going to be looking at five different analysis tools.
As you can see on the screen, the first one is a finance summary. True to its name, it’s just a summarization and it summarizes some of the things that are tools B, C and D, which is revenue details, direct expenses, indirect expenses. Then we’re going to come back on the fifth one, item E, and look at the overall assessment. So, in your handouts, they’re distinguished on the right-hand side and you’ll see something similar on the screen.
With that, I’m going to go right on to the very first one, which you’ll notice on the right-hand side, this is the financial summary. You’ll notice I’m illustrating this with three comparative years: 2015, that’s this year’s event, last year’s event and the same event the year before last. How are we comparing to ourselves? So, if you’ll notice at the very top, item number one, this is the income section. We’re taking our gross revenue, which this year–and this was all made up–but this year is $125,000.
Beneath that, you’ll notice some adjustments. I’m going to come back and dig into those adjustments later. But we’re going to take our gross revenue minus adjustments to the revenue to get a net income figure, $107,100. And then you’ll notice how that compares to our experience in the two previous years. On line number six, then we’re looking at our direct expenses. So, we had $60,000 of direct expenses. On line eight, we’ve got $20,000 of indirect expenses, and on line nine, we’re showing overhead, $6,800.
Now, just a quick comment on overhead. There are lots of ways to go about addressing the question of overhead. To me, the first question is, “Do we have any overhead or not?” If there’s no overhead, then just put a zero there. If there is some overhead, come up with some calculation. For the purposes of illustration, you’ll notice I’m just using 8.5% of our direct expenses.
But the point is, there is an overhead cost that is applicable to virtually anything that you do. So, for purposes of illustration, you see the 8.5%. So, we’ve tallied this together and you’ll notice we’ve got total expenses of $86,800. When we subtract that from line number four, net income of $107,100, we end up with a gross profit on line 13 of $20,300.
So, the question is–a lot of times we’ll say, “How much did you raise with your special event?” Well, we raised $125,000 or if you want to use the net number we raised $107,100. How much of that money is available to really move the mission forward? Well, the answer is on line 13. In gross terms, we’ve got $20,300 left after we paid our expenses. There’s a key oversight on line number 14 and that’s called “opportunity costs”.
In this example, we’re showing $17,500 of opportunities that were missed. I’m going to come back to that in just a moment because in my experience, that may be the most overlooked element in our whole analysis. So, I’m going to give you a little bit of depth on that here in just a moment. Once we accept that, you’ll notice it pushes our net profit down for this year to $2,800. Last year, we actually lost $8,635. You’ll notice in the year before that, we gained $12,810.
Now, that’s the answer to how much are we raising. Go to line 17. Here we’re talking about return on involvement, ROI, return on involvement. This is answering that question. What is the value of the hours that are put into the equation by our volunteers? In order to be able to answer that question, we’ve got to know how many volunteers we have and how much time they spent.
For purposes of illustration here, I just assumed that we had a total of 60 volunteers who are engaged in one way or another and that each of those volunteers spent seven hours from the beginning of our planning phase until the completion and the wrap up and the aftermath, if you would. So line 20 tells us if we divide our net profit by the number of hours involved, that gives the effective wage rate of each of our volunteers per hour.
Now, notice on line 20 it says, “This year the effective wage rate is $6.67.” Last year, we were losing $20 an hour. In the year before, we had an effective wage rate or earning rate of $30.50.
So, what is involved here? What all does that represent? I want to give you something that’s not on the slides. We’ve got a whole bunch of robust material to go through. I want to back up for just a moment and just give you some comments on line 14, which are opportunity costs. What that represents is other fundraising that we didn’t do while we were doing the activity that went with the special event. Is that real? Well, you tell me. In your situation in your world, is that real?
My experience is it’s way more real than what most of us realize and perhaps maybe even more than what we admit. Here’s an example. I cannot tell you how often I’m working with either clients or potential clients or those who wish they would become clients, and we’re talking about major gift fundraising programs, things that will dramatically impact their bottom line from the standpoint of dollars contributed. They’re highly motivated, very capable. They’re interested. But here’s what they tell me. “I can’t start on that yet because we’ve got our big event coming up.”
In fact, I was visiting somebody recently about actually participating in this. “Well, we’ve got our big event next week. That’s the only thing that we can focus on between now and then.” In fact, I asked one person. They were talking about planning their big event. I asked them, “What’s the timeline?” Here’s what she told me. She said, “I’m development director. For nine months each year, almost the only thing that I can give any attention to is our special fundraising event.”
Part of what we’re looking at here is what does that event generate? What does it cost? Is it worth it? But what is often overlooked on line 14 is the opportunity costs. So, as you begin to think about that and then not just think about it but actually calculate the impact of it, here are three dimensions I want you to focus on.
First of all, what are the fundraising activities that at the staff level we would and could otherwise be engaged in? In addition to that, ask the same question as it relates to volunteers. We send our staff and our volunteers out and we’re hustling $25 gift cards or $100 whole sponsorships or $1,000, $2,500 event sponsorship, whatever it is.
As much activity as we generate there and as much results as we generate there, if we weren’t focused on that, is there a higher value proposition that we could be engaged in either or both as volunteers and as staff? That’s one example of opportunity cost.
Let me give you another example of opportunity cost. It’s what I call lifting the donor’s sites. So, to me, one of the biggest missed opportunities as a result of our fundraising event comes about something like this. Let’s say we’re having our black tie gala. We’re selling tickets for $150 each, $300 a couple. For many, and I’m going to suggest for most of your participants, they’re going to be positioned as one and done.
If you ask me to buy two tickets for $150 each, I’m going to write you a check for $300, I’m going to come to your event. I’m going to eat the rubber chicken, whatever it is, but then I’ve done what you asked me. I’m done. So, each year you get $300 from me. You keep only a fraction of that because you’re using the money to buy that rubber chicken, etc. We start with $300. We don’t end up with $300.
Now, I’m going to give you a contrast. Ask yourself what is the average household gift potential. In other words, if instead of asking people to spend $300 to buy a ticket and spend an evening away from home, if we were asking that same household to make a charitable contribution to fund our mission, to address issues in our community, what might that be?
As a point of reference, I’m just going to give you a number, it’s $1,000. Think about that — $83 a month. We can have somebody make an $83 a month commitment. That’s a $1,000 gift. If we would be asking for $1,000 rather than selling $300 worth of tickets, we have a $700 difference and it’s what I’m going to call a $700 under-ask.
Now, let’s say that we had 300 households participating in our event and of those 300, only 10% of them would fit this profile of under-ask. So, we’ve got 30 households that could be giving $1,000. Instead, they’re giving $300. If you multiply that, $700 times 30 households, that’s $21,000. So, that’s an example of a $21,000 opportunity cost that many times is simply missed.
Now, if we have time and if there’s interest we can come back to the question of what all goes into the calculation of volunteer hours on line 18, but for right now, I’m going to fast forward. I’m going to pass right on beyond that and go to page B, which is your revenue details on the fundraising event analysis.
So, there are three components to the revenue details. The first one is gross revenues and then next we have adjustments, which we’ll subtract from that, which then will equal the net income. Let’s take a look at those gross revenues. What is it that represents the total income that goes with a fundraising event?
Well, on the sheet there, you can see some very typical, forthright examples. Line number two, sponsorships. For a golf event, we have people sponsor the holes. Sometimes we have people sponsor advertisement. There are a lot of different ways that we’re gaining sponsorships. Usually this is corporate. It’s not limited to that, maybe foundations, maybe some individuals. But that sponsorship income is a part of our revenue.
If you’ll jump down to line number seven, in kind gifts, you’ll notice I put an asterisk by that one. But for in-kind gifts, what are some examples? Sometimes we’ll have somebody who will generously contribute advertising space–billboards, maybe they’re going to donate the food for the banquet, for the meal. We’re doing, again, back to the golf event, somebody’s manning the grill and providing the burgers and hotdogs, what have you. But all those would be examples of in-kind gifts.
Those are some forms of revenue that come in. We want to tally that cost as well as all the other different sources of income. Again, on this example, you’ll notice it tallies $125,000 this year. So, again, those are kind of the ordinary things. We usually don’t miss those.
Let’s look at the next page. This is actually at the bottom of the handout that you have, but here’s where we’re looking at some adjustments to the revenue. The first example on line 17 is what we call “gift shifting”. I want to encourage you to make a count for those gifts that are simply shifted. Now, this can’t be totally arbitrary, but on the other hand, you can’t be 100% calculated on that. But the example of gift shifting is donations that would be available to the charity whether we had an event or not.
I recently had a–I was looking at a special event. As I looked at the source of a lot of their income, a lot of this was coming from board members. It was very evident to me as I observed and asked questions and listened that much of this giving was board giving that essentially I can write a check to you for the event or I can write a check to you at any other time or for any other purpose that you want to call it.
So, that’s an example of gift shifting. If you have dollars that are available to you without the event, take them out of the equation. Board member’s donations, table sponsorships, purchases at the auction and buying tickets, those are examples of gift shifting. That’s on lines 19 through 25–board members’ employer matches on any of above.
Line 26, corporate ads–I can’t tell you how many times when I was on the other side of the table, when I was actually responsible for special events, corporate leaders would say, “This is how much we’re going to contribute to the charity this year. You can use it however you want. If you want to call it a sponsorship for the event, if that helps you raise more money, fine. We’re fine with that.
So, again, that’s one of those things where it says, whether it’s corporate ads or other kinds of corporate sponsorship, use it as you like. Well, if that’s the case, then you can’t truly consider that as a part of the real revenue that’s being generated by the event, although often times we do so.
At the very bottom, then, you’ll see that number again which is net income. This ties into the first page. But this is our total revenue minus the revenue adjustments. In the year 2015, you’ll see that totals to $107,100.
Now, let’s go from there to quickly look at direct expenses. Under direct expenses, you’ll see some very typical familiar items. On line number one, I’m just going to say a comment. Be sure and use the expenses for salary and wages that go with the permanent and temporary staff that may be associated with the event, maybe event planning staff, what have you.
If you’ll jump down to line number 12, what are some examples of licensing, fees and permits? If you have to pay a license fee to ASCAP, to BMI, sanctioning costs, are there costs associated on line 13 with gifts and appreciation for volunteers, for staff, for board members, etc.? Again, often times we’re incurring lots and lots of costs directly associated to the event. Make sure that we tally them up here on item C.
On D then, we go to some indirect expenses, all manner of things. Staff salaries and benefits–is there a percentage, for example, of the vice president for development, etc., a percentage of their time and attention that goes to the event? If so, take that percentage times the number of months, times the salary to come up with the $3,000 figure that you see for the VP of development, $2,000 for support staff, etc.
Is there supervision and oversight that is even less direct maybe from the CEO, from a different vice president, what have you? Again, either the cost is something or nothing. If it’s nothing, put down a zero. If it’s something, if you can calculate it precisely, do that. If you can’t, just use an estimate.
Now, if we go to the last item, it’s the overall assessment. Here’s where I want us to take a look at the net profit, the non-financial impact and then really do an overall evaluation. So, if you’ll go to–this is on Handout E. At the top end, you’ll see where, “Assessing the Net Profit”. This is just a repeat of what’s on the earlier summary of the finances. What was our net profit? $2,800. How many volunteer hours were involved? 420. What’s the effective wage rate per volunteer hour? $6.67. Now, again, that’s just a bit of a recap.
So, let’s go to the next section, which is the non-financial impact. How is this event impacting our mission in ways that can’t be measured with dollars and cents?
Now, you’ll notice we’ve identified five direct ones on our image, our reputation, publicity, mission awareness and news coverage. There may be other dimensions to your measurement, A, B and C, but identify those however you want. On each one of them, ask was the impact positive or was it negative. If it’s positive on a scale of one to five with five being most positive and one being least positive, how do we rate it? Or if it was a negative impact, the event had a negative impact on our image, was it a little bit negative, minus one or was it a lot negative, minus five or someplace in between?
So, again, make the assessment, value it, and then put in this column. Did we impact our image? Was our reputation affected one way or another? Publicity, awareness of the mission–quick comment on that. I’m amazed at how often I go to special events and I attend, I participate and when it’s over I know nothing more about the mission of the charity than I did when we began.
To me, at best that’s a zero. In some cases, you end up with a misconstrued idea of the mission because the wrong person is voicing what it is and you end up with a negative. But whatever the case is, tally those up, add them up, combine that down to line 14. That’s your overall score in terms of non-financial, was the impact large or small? Was it positive or negative?
Once we’ve done that, then we can move to the evaluation section, which is lines 16-28. The big question on line 17 is: Is the result worth the effort? That’s a very big, very serious question. Is the result worth the effort? It matters a lot. So, go on to question B. Should the event be repeated? Give yourself permission to answer either yes or no. If the answer is yes, we’re going to look at that on item C, D, E, F, G, H and I. If it’s no, we look at J, K and L.
So, yes, it is worth the effort and it should be repeated. Let’s ask ourselves, how can we make it more rewarding? How can we make it more profitable? How can we increase revenues? How can we decrease expenses? How can we reduce the organizational burden as a result of the event and then how can we expand the impact that we’re making?
Question I is a who question. Who needs to be involved to take the event to the next level? If we have a moderately successful event that we believe can be more successful, don’t bring a maintenance person in. Bring in a human dynamo. Bring in that person who is actually a sparkplug so they can take it to the next level. On the other hand, if we think we’ve just reached the next plateau, that may be the time to have a maintenance person, so to speak, carry us forward.
Now, on item J, if the answer is no when we ask the question, “Should the event be repeated?” if the answer is no, then let’s ask ourselves, “How can we gracefully exit?” Somebody says, “Well, it’s going to take us two years to back our way out of this.” Let’s start now. What publicity or communications issues are at stake? This doesn’t say, “No, don’t exit.” It just says as we exit, let’s do so intelligently in ways that we can manage the publicity issues or the communication issues.
And then on L, what should take the place of the event? If we’re not going to do the do the event, what are we going to do instead? If it’s a big loser, we can do nothing and come out ahead. But let’s don’t do nothing. Let’s do something and let’s have it be something that’s productive. So, with that, I’m going to shift now. The big question is, “So what?”
We’ve taken a look at how to evaluate the effectiveness, both financially and non-financially of our special event. Now we say, “Okay, so what? What should we do about that?” This is an important question. Don’t lead with a preconceived idea, but let the things that we covered on these worksheets help us quantify the answer to the question, “Is it worth it?”
The other thing I would say, everything we’ve covered up to this point can be a tremendous planning tool. As you plan for your next special event, your fundraising event, use that to anticipate sources of income, different ways that money is leaking out of the bottom because this could be a really valuable planning tool for you.
The big question, “So what?” I want to ask how should we be spending our time? You know, we can be spending our time on the 80% of the dollars, big money, that comes from a few donors or we can be spending time on a lot less money, but a lot more donors. So, 20% of the dollars that are coming from 80% of the donors.
So, ask ourselves, “How should we be spending our time?” That’s a really big question. A balanced fundraising program isn’t only one thing. A very sophisticated, balanced program probably has some kind of an event in it, but it’s not going to be primarily events. So, let’s ask ourselves that.
Again, we’re wanting to see beyond. We said we wanted to see beyond the present. Let’s see beyond the large number of small donors and take a close look at the smaller number of donors that can contribute much larger dollars. To do so, I’m just going to offer you six tips on how to use special events now to raise larger gifts.
Tip number one, this is where we say use your volunteers, but don’t use them up. What do we mean? You have capable people, both staff and volunteers. But here we’re focusing on volunteers. You have capable people at your disposal. Give them meaningful work to do and then let them do it.
Use your volunteers. Use volunteers to do what only they can do. When it comes to things like stuffing envelopes or making goody bags or whatever, get teenagers to do that for free or do it for pizza or call the local temp agency, find somebody who will do it for cheap. Don’t squander your volunteers. Use them. Don’t use them up. Give them things to do that are impactful.
Tip number two is connect with people. And more specifically, I want to recommend that at the special event that you be sure that your CEO connects with lots of people at the event and connects appropriately with the right people. This is a special time for your constituents. This is a time where your leader has to shine.
Do not delegate the face of your mission to a task. If it’s a golf event, I wouldn’t let my CEO golf. I don’t want him to participate because if they do that, they’re going to spend a lot of time with a few people. Instead, maybe they’re going to run the drink cart, run the golf course backwards so that they’re interacting with everybody.
I’m amazed at how often I’ll ask people that are doing an event, “Where’s the CEO?” “Oh, he’s got a meeting in his office.” That’s the wrong plan. This is the time to build relationships. We want to put a face on the mission. People want to meet your leader. Make sure that we don’t miss that opportunity.
Tip number three is to grant an ask pass. “What is an ask pass?” you ask. There are a select few individuals who are going to come to your event. They may not even be invited. They may not belong there, but you can’t tell them not to come. It’s that high net wealth individual who, if they bought your ticket for $300, it would represent leaving three, four, five zeroes on the table.
The ask pass is a way that we can approach people who are there but we don’t want to give them a pass by accepting their gift. We avoid under-asking by sayings something like this. I’m going to call the guy Justin. “Hey, Justin, tonight at the event there’s going to be an opportunity to make a contribution to our agency. I want to ask you to please don’t respond at this time. We appreciate you being here, but I’d like to follow up with you on a more personal basis at an appropriate later date.”
Use that ask pass for people that you’ve identified in the audience. You’re horrified, “Oh no, we’re going to ask everybody for a $1,000 donation.” If they say “yes”, you can’t go back to them tomorrow and ask them for another zero or two. Instead, give them a pass. “We’re going to ask. Please don’t respond. I want to get with you next week and talk about ways that you might be involved that are really more suitable to you.” So, that’s tip number three.
Let’s go to tip number four. This is your debrief. If we’re going to use our special event to raise larger gifts, I want to make sure the very next day to hold an immediate and thorough debrief. How do we get people there? We’re going to do an awards party. I want my volunteers there. I want an opportunity to, in a very personal way, say a thank you to them.
By the way, the event itself is not the time to spend a lot of time thanking your volunteers. Do that in a more meaningful way at a selective audience the next day. Buy them lunch, breakfast, supper, whatever it is, put it on the event schedule from the very beginning. But here’s what I want to do.
Of course I want to thank my volunteers for their dedication and for their generosity, both in terms of time and money, but then I’m going to ask them, “Who did you see and what did you hear?” They will know the profile of people who were there that I don’t know. I’m going to listen carefully to what I hear from them. Who did you see? What did you hear? Who should we be talking to? What does it mean? And then I’m going to respond accordingly.
So, tip number four–conduct a robust, prompt debrief to glean the really rich information that comes out of the event. Now, that’s similar but very different from tip number five and that is follow up with your top prospects on the day after the event.
You’re kidding me, those top prospects, especially the ones that we gave an ask pass to, I want to call them ideally the next day, at the very least within a week of the event. I want to call them and just say, “Thank you for coming.” I’ve got two big questions. What did you think?
Now, this is intentionally vague. This is what we call an advice question. What did you think? Listen to them carefully. Ask, “How would you like to be involved in the future?” And again, don’t define that, but this is an opportunity to follow up in a very strategic, intentional and personal fashion.
Tip number six is to critically evaluate your fundraising culture. Why do we do what we do? As it relates to special events, are we doing this just for the value of having an event only for the sake of the event? In other words, is it just for fun? Now, Steven, you know I’m all about fun. We want to have fun in what we’re doing. But ask our question, “Is this about fun or is it about funding? What is our event culture?”
As it relates to funding, ask the question, “Is this event bringing resources to the mission?” What resources? Money, people and awareness. Is the event bringing money to the mission? Is it bringing people, new people to the mission? Is it elevating the degree of our awareness within the appropriate community? So, a whole variety of things that we can assess, but these would be the three at the core as you evaluate your culture. Are we into funding or is this just about having fun for the sake of fun?
So, with that, I want to just take a moment and open it up for some questions and answers. Steven, any questions we need to address?
Steven: Yeah. We’ve had a few come in while you were speaking. I just want to encourage everyone listening along to ask any questions. We’ve got probably maybe 12 minutes or so for questions, but don’t be shy at all. Kent, I just want to say thank you for all your information before we get into it.
I loved those resources in the beginning–definitely planning, the expenses and everything, great resources. I love what you said about opportunity cost. I think that is so overlooked and so needed. You think about the time not spent thanking donors, doing all that stewardship stuff. So, absolutely thank you for all this great info.
Michelle was wondering how do you measure that image and reputation and publicity awareness kinds of things? Do you have any sort of insights on how you can actually maybe measure those in a concrete way? Michelle was wondering specifically about social media as one channel those things can kind of come about.
Kent: Okay. Yeah. Good question. By the way, Steven, for some reason, your voice is really breaking up a lot. So, let me just repeat the message and hopefully mine’s coming through okay. But the question has to do with are there ways we can measure some of these non-financial things especially as it relates to social media.
I’ll just use one example and I’m sure you can apply this in a lot of different ways, Michelle. Of course, one of the most popular social media is Facebook. We may, at the outset, establish a goal that as a result of this event or during this period of time, we want to secure an additional 350 likes to our Facebook page for our organization. That may be a little bit arbitrary. Use something that’s specific to you.
But if that’s the case, then what are the strategies that we need to use so that we have something very measurable. We knew how many likes we had on day one. We know how many likes we have 120 days later. Now, whether those all came from this or not, that’s always debatable. But if the thing is we’re trying to get more likes, then we’re strategically using this event to accomplish that.
Another thing maybe–in advertising we always talk about impressions or eyeballs. Those who are professionals specializing in the marketing area can give you some examples of how you can actually measure that. But those would be examples of some non-financial impacts as it relates to awareness and visibility, things that can really help us. So, hopefully that helps. Again, apply those same principles to other platforms.
Steven: Cool. Denise was wondering, “How do you identify the folks who you consider to be top prospects?” What do you kind of look for in identifying who your top prospects are for major gifts?
Kent: Okay. Good question. I think you said Denise.
Kent: We could actually–this is an idea for some time later if you want to do it, Steven–we can actually do a whole webinar on the topic of identifying and then, if you would, qualifying prospects. What’s the difference between a suspect and a top prospect? But essentially, there are three major ones. I’ll just give this to you in a nutshell. One is financial capacity. Another is affinity for the mission, and then a third one is what we call the generosity factor. Is this someone who is known to be generous?
So, how we identify them, again, in our own organizations, we already know people who are visibly identified as such so that when that person, that corporate CEO sets foot in the room, it’s one of those everybody knows situations. Those are the easy ones. For the ones that aren’t as easy, that’s where, again, I want to engage my volunteers in that post-event briefing to say, “Who are the people that were there last night who, if they were inclined to do so, would have the financial capacity and have the personal interest to really move our mission forward?”
So, I want to engage the brains of people who are outside myself, outside my staff, outside my board. I want to engage their insight into helping identify those who haven’t identified themselves as top donors by making larger gifts, but somebody knows that they have that capability. Let’s say that we’re into feeding hungry children. They know that this person has a special place in their heart for the needs of children. That would be an example.
Steven: Great. Rebecca was wondering how long you can wait to follow up with prospects right after the event, can you still do that maybe days or months later or are you going to miss that boat if you don’t do it right away after the event? Is there kind of a window that closes there for folks?
Kent: Yeah. So, great question. We’re asking about urgency. How soon is soon enough and how late is too late? While there’s no precise scientific answer that I can give to you on that, here’s the thought I want you to wrap around. Ask yourself the question when is the point of highest motivation for that prospect. The answer is it’s at the moment of their greatest information or engagement.
So, if we’re doing the gala again, for example, people are going to be learning things about our mission that they have not known before. They’re going to be having fun. Their endorphins are having a party. That’s their point of greatest motivation, highest involvement. So, the closest we can get to that, the better.
Now, if we want a $100 gift, a $1,000 gift, a $2,500 gift, do it with a pledge card at the table that night. But if we’re talking about more zeroes, then that’s why I say the next day is ideal. At the least, I want to make that initial contact within that next week because the further we get out from seven days, think about it as a closing window, we don’t know when it’s going to be all the way closed. We just know that every day it’s a little less open than it was the day before.
So, again, just think about the windows closing, the curtains closing and the more time that passes, the further away we are from motivation.
Steven: So, there are two questions here, one from Carrie and one from Cullen and they’re kind of similar, so I’m going to kind of combine them. Carrie says, “If leadership believes that the event should take place even if you have provided evidence that there’s negative ROI, we don’t raise any money, what should you do about that situation? Should you call the event something else?”
And then Cullen was wondering about a founder that has founder’s syndrome and just wants to do the event no matter what, even if it does have negative ROI, what should you do about that situation where maybe leadership is not interested in changing course, even if you have completely proven it through some of those worksheets that you’ve shown?
Kent: Do you have any easy questions, Steven?
Steven: That’s a tough one.
Kent: Yeah. But it is a very real one. The question is actually kind of a two-fold question. What if you have an event that in the non-financial aspect is worthwhile, but financially it’s challenging or is it a situation where we’ve bought into the solution whether it’s solving a problem we have anymore or not, the founder’s syndrome, “This belongs to me.”
So, let me take the first one. Sometimes one of the best things we can do is reconfigure so that we’re not positioning this as a fundraising event at all, but it is a fun event. It’s an informative event. Seriously, for many of the events that I encounter, I would say how about we stop selling tickets and we stop having auctions, bleeding people to death one drop at a time and instead we’re going to have either a celebration, an introduction or whatever, and I’m going to ask people to bring 10 of their friends and maybe it’s an individual sponsorship, “Would you be my guest?”
We’re not selling any tickets, but I’ve got a table of 10. My wife and I are going to be there. We’re going to invite four other couples. There’s no obligation, no tickets to buy, nothing to bid on, but here’s what we would like to do. We want you to see why we’re so excited about the mission of ABC Charities. After you hear what we’ve heard, if you’re interested in learning more, we would invite you to accept a follow-up conversation.
So, bring people into the room, celebrate, don’t sell, right? Celebrate, don’t sell. Tell the good news. Talk about our mission instead of talking about somebody else’s merchandise. Then when that’s over, do that follow-up the next day where those who have an interest can raise their hand. Once they’ve raised their hand, let’s go talk to them about being involved.
If we’re having a $50 plate meal that we’re selling for $150, you’re not going to find very many people who are going to say, “I’m so enthusiastic about this that I just want to write you a check for $150. You’re going to see $1,000, $5,000, $10,000, even more, but now you’re going to engage in relationship and that’s where money is. It’s in relationship, not in transactions. That’s the first thing.
The second thing as it relates to what do we do with the founder’s thing, I would just say let’s make that which is invisible visible. Let’s take that ROI, return on involvement, into the boardroom and let’s give the board an alternative. “We’ve done this. We’ve done it successfully. We’ve done it with marginal success for this period of time and we’re looking at alternatives. We can either keep doing what we’ve always done and keep getting what we’ve always got, or here’s an alternative.”
“And we’ve discovered that the value of our board time in this is worth almost as what you’d make working at McDonalds and we can keep doing that if you think it’s a good idea. Or we have something where we think your effective yield is $100 to $500 to $1,000 an hour. What would you rather do?”
And if what they would rather do is something that’s dumb, let them go on record as making that choice for whatever reasons–it’s not my choice to make–but let the collective make the answer, make it on an informed basis, and then we’re going to go back a year later and ask the same question and eventually we may get a different answer.
Steven: Well, we’re just about out of time. Maybe I can do one last question. I think I’m going to pick out Karen’s question here. She’s wondering, “Is there a type of event or maybe a format that you think is best for cultivating top major gift prospects?” Have you seen a format or a type of event that has worked really well kind of across the board? What do you think there?
Kent: Okay. So, the question is from Karen Singer. If this is the Karen Singer that I know in Reno, Nevada, if so–
Kent: But I hope it’s the same person I’m thinking of. If so, hi, Karen. In any case, hi Karen. But again, the question is–she says, “That’s me.” Is there a type of event or an event format that you would recommend for best cultivating top prospects? Here’s the answer I want to give to that. When you think about top prospects, let’s think about the setting that is most comfortable for them. So, depending on the organization, top prospects may involve a different number of zeroes. So, think about an event that’s suitable.
Now, for some–Karen, it’s interesting that you’re raising this question. I have a colleague who is at another well-known city in your state who–you may want to meet him–but here’s a top donor development, prospect development approach. That is a $12,000 a person price tag. It’s a week-long wine tour in France, literally staying in castles and chateaus of those wine producers.
Now, would we do that? Actually, the way we do it is they pay their way. But that could be a very appropriate strategic and profitable donor cultivation event. It might be that we’re taking somebody to our skybox at the NBA game or the NFL game, whatever it be. It may be a situation where a member of the board is going to host a small gathering in their own personal home.
And so the question is, as you think about the top prospect, what’s going to be appropriate and comfortable and engaging for them? Then use that to engage them. And think about these three different levels of engagement. The most intimate is one to one. The next is one to few. And then the least engaging is one to many.
So, one to many, that’s our large scale fundraising event. The one to few, that may be the in home thing. The one to one, that may be where the two individuals go on a fishing trip together or a girls’ shopping trip together to New York City. Again, let the solution be appropriate to the specific donor. Make sure it’s relational, not transactional.
Steven: Makes sense. Well, Kent, I know we didn’t get to all the questions, not nearly all of them. Is it fair to say you’d be willing to take some questions maybe on email or Twitter or some other channel?
Kent: Sure. Yeah. In fact, let me just touch base on a couple of other things real quick before our time is gone.
Steven: Yeah. Go for it.
Kent: I want to wrap up just by sharing this quote from Murray Banks. It says, “Whatever we focus on expands.” As you think about that question we raised earlier, the 80/20 rule, if we spend a lot of time on our special events, we’re going to have a lot of event-shaped results. We’re going to tend to have large numbers of small contributors.
And I don’t want to undermine the value of the 20% of the dollars that come from 80% of the donors. That’s very important. I want to focus more on the thing that I want to expand more. I would just say ask yourself very intentionally, “Where should our focus be? Where is it? What needs to change?”
And with that, I just want to ask this question. What is the most important point for you for today? I can’t answer that question for you. I hope there’s one thing that you can take away. Once you identify for yourself today’s most important point, would you make application of it, do something very specific, meaningful and impactful for you, for your organization, and put it to work?
As Steven mentioned, I would love to, as you experience that success, I would love to hear more about it. But with that, let me just say a great big thank you. It’s been fun to spend this time together. I wish we were actually in the same room together, but I want to wish each of you all the best as you move from events to larger and larger gifts.
Steven: Well, thank you. We owe the thanks to you, for sure, for taking an hour out of your day and sharing all this great info with us. So, thanks to you. And thank you to all of you who took an hour out of your day to hang out with us and listen along. Do be on the lookout for Kent’s upcoming book. We’ll definitely be talking about that. There’s a coupon code there that you’ll be able to use early next year. We’ll definitely be talking about that on the Bloomerang blog, maybe even do a little book review for you.
So, definitely stay in touch. I’ll be sending out the recording and the slides a little later on as well as that handout just in case you didn’t get it. So, look for an email from me a little later on. Definitely follow Kent online. Check out his website. He’s on Twitter as well. If you’re on Twitter, you can talk to him there. Definitely ask some questions if we didn’t quite get to your question. We ran out of time. Sorry about that.