It’s time to rip off the Band-Aid and diversify beyond events
Every few days, someone asks us…
Should we go virtual with our events?
How do we make a virtual event succeed?
How do we make our event stand out?
Our answer is always: Let’s take a step back.
As an industry, we sometimes lose sight of why we do events in the first place. The current crisis is forcing us back to the basics: The real value of events is not the revenue they raise.
Events are an inefficient way to raise revenue. They are expensive in terms of direct expenses (location, food, etc.) and extremely expensive in terms of indirect expenses (staff time), opportunity cost (where else we could be deploying our resources), and donor retention (pulling our attention and resources to acquisition, usually without the corresponding investment on the backend to retain the new donors year-over-year).
The reason to continue with events, then, is their other, powerful benefits, such as introducing people to our mission, creating community among like-minded people, and building our brand. We’ve all felt it: Real magic can happen when people are gathered together in celebration of a shared cause.
As nonprofit leaders and fundraisers, now is the time to take ourselves out of the churn of conversation about virtual events to assess…
What are my long-term revenue goals?
What do events contribute to those goals—and what do they not?
How can I use this unusual year to take a big leap toward creating the diversified revenue I want/need?
The world is thinking differently about everything. It’s time we think differently about events.
Here’s a step-by-step guide to getting started.
Step 1: Define your goals
Let’s start with defining our terms.
You’ll notice at Aperio, we never say: move away from events. We say diversify revenue.
By diversify, the idea is the same as how you approach your personal investment or retirement accounts: You spread your resources across multiple areas to reduce your risk. When our investments are highly concentrated, we face high risk of loss if something unexpected happens. When we have our investments spread out, we are more resilient in the face of crisis and our dollars grow faster.
We’re seeing this in practice today in the nonprofit space. Organizations that had all their eggs in the special events or peer-to-peer basket are suffering. Those that had events and peer-to-peer blended into a fundraising portfolio are on the road to thriving.
If you’re in that first category, you have a golden opportunity. This year is a once-in-a-lifetime chance to diversify and to diversify quickly.
As you explore your options, set some goals:
What do you believe is the real revenue potential of our mission? Or, what revenue will it really take to achieve our vision?
How will diversification help us make faster progress toward that number?
How bold are we willing to be this year?
Step 2: Assess your database potential
Even without having looked at it, I can tell you: Your database has more potential.
Your database is your cumulative list of all the supporters you’ve inspired over the years. Every person in there, at some point in time, was moved to invest in your mission—either because it aligned with their personal philanthropic goals, because your work resonated with them at a point in time, or because a friend asked them.
Now what?
Now that you’ve acquired donors, what’s next?
For most donors in most organizations, it’s very little. It’s common that as much as two-thirds of donors to an organization give only once. Before we take the time to get to know them, show them the impact of that gift, or ask again, we’re on to the next event or the next mailing—we’re focused on acquiring the next batch of new donors.
Not all of those first-time donors will give again. But with the right approach, some will. And some will even years later.
Beyond your first-time donors, your database is a cadre of loyal supporters – people who give monthly, a few times a year, annually, or every few years. We tend to take these donors for granted. We do our best to stay in touch with them, but inevitably end up spending more time with those who have just given, who have given large gifts, or have the highest demands.
What about those with a much higher giving potential than their giving history?
Our opportunities, then are:
To identify recent(ish) first-time donors with potential that we have not yet gotten to know
To identify loyal donors with higher potential than their current giving history
To assess your database:
Take a moment to congratulate yourself on the size of your list. A lot of investment, a lot of time, and a lot of energy went into creating that community. Acknowledge and applaud your hard work in getting here.
Now, use a prospect research tool (such as Wealth Engine, iWave, Target Analytics, you name it) to better understand the gap between current giving and potential giving in your database.
For more, see our step-by-step guide to organizing your list.
Step 3: Understand your options
Sometimes, we default to events because it’s the channel we are the most familiar with. It feels very secure: effort in, dollars out—on a very concrete timeline. And more importantly, it’s the channel our volunteers are most comfortable with. (What board, when charged with coming up with ideas for fundraising, has not defaulted to a new event??)
There are lots of other options that can be grouped into two types of efforts:
Sparking peer-to-peer without an event
Asking people to invest directly in your mission
Events are our go-to way to ask volunteers and donors to ask their peers to get involved. We have all seen how powerful a peer-to-peer ask can be. Fortunately, there are more ways to make that magic happen:
Board engagement is your most powerful peer-to-peer fundraising tool. Equip and inspire your board (and other volunteers!) to introduce you to philanthropists, foundations, and companies—and watch your pipeline grow. See tips and resources for getting started.
DIY fundraising platforms such as Crowdrise, Blackbaud Peer-to-Peer Fundraising, and Qgiv have made it easier than ever to empower supporters to raise money on your behalf (and get donor information, solving a key pain point with Facebook). Provide a toolkit, make it fun, reward top fundraisers, market the opportunity, and you’ll see your donor base grow with comparatively little investment. Carefully research the people fundraising for you, since they’re signaling interest in a new way. Screen the donors just in case some gems pop up, realizing that their mission connection may be a bit removed.
Don’t overlook the opportunity to ask for direct investment in your mission. In general, we can be much, much bolder in this space. Here are the channels to consider, starting at the top of the gift table…
Major gifts tend to get a bad rap as ‘the long game’ in fundraising. To be sure, if you invest a few hours a month in major gifts, it will take you years to advance relationships, get conversations going about philanthropy, make asks, and secure gifts. But with more investment of time and resources, the process can move much faster. This year in particular, donors—including many of your top event donors—are looking for ways to invest directly in the work they care about.
Foundation grants are a well-known opportunity, but we tend to think too small. Often, grants under $5/$10K actually cost you more to request and steward than the funding you receive. This year, as foundations are stepping up their funding for the broad array of causes that contribute to our crisis response, you have an opportunity to take a bolder approach.
Corporate sponsorship can be solicited for your year-round work, not just events. While many companies are cash-strapped at the moment, they are also facing tremendous pressure to position themselves as solution-oriented community leaders. Create a package that provides sponsor benefits to companies that invest directly in your mission. Don’t sell yourself short. Keep the prices higher than feels comfortable. Keep the benefits simple and deliverable.
Middle & monthly giving (from any channel) can boost your retention rate—meaning the number of donors who become loyal supporters and give continually—and thereby both increase your revenue and reduce your cost per dollar raised. These programs take upfront strategy and organization, but then become turnkey to run.
General support can be solicited from your community at large. How often are you emailing? Probably not enough. How many of your emails have donate buttons? Probably not enough. How much are you mailing solicitations? Probably not enough. How many people are you mailing to? Probably not enough. While the gifts may be smaller, the lifetime value of donors who give directly to your mission is much higher than those who give once at an event. In addition, this pool of low-dollar donors is where you find your future major donors who give large gifts directly to your mission.
Bottom line: Do not feel forced to go virtual. You have options, and they can be activated quickly.
Step 4: Craft a strategic 2020-2021 events portfolio
Now that you don’t feel pigeonholed into pursuing all your events virtually, you have the breathing room to ask: What role do I want events to play this year? How can they help me…
Introduce people to our mission?
Create community among like-minded people?
Build our brand?
As you explore these questions, you may realize you do not need all your events this year. Maybe you…
Consolidate multiple events nationwide into one
Continue your signature gathering with a loyal following, but pause the rest
Replace all your large events with a series of intimate virtual parlor conversations this year
There is not one answer here, but there is one thing to look for: You should have resources left over after you make your plan.
Step 5: Redeploy your resources
Now, let’s talk about resources.
The number one mistake that organizations are making right now is to keep their former event resources entirely invested in events. Even if you are going fully virtual, you should have resources left over to redeploy in other areas.
What do I mean by resources?
Your expense budget
Your event staff’s time
Your leadership’s time
Your board’s time
Your event volunteers’ time
Your marketing & communications resources
When we step back, we see just how resource-intensive events really are.
Our opportunity this year is to advance our event strategy with a fraction of the investment of all these expenses and all this time.
Imagine: What could I do with the extra staff and volunteer bandwidth? What could I do with the event expense budget?
Suddenly, you have an extraordinary opportunity.
You have everything you need to pursue that diversification strategy you’ve thought about all these years. You have a golden opportunity to manage the expectations of event volunteers, to redirect the creativity of your board, to increase the productivity (revenue per headcount) of your staff…and most of all, to provide your donors the maximum opportunity to advance the mission they care about.
You will be surprised how eager donors are to try new forms of giving this year and how quickly your diverse revenue streams can grow.
Next year, when you have the option to add in-person events back into the mix, you will have far more opportunity than before—for donors who give to both events and directly to your mission, for donors acquired through your events to have a way to stay engaged, and for your total revenue to grow exponentially.