Fundraising: Mixed bag for nonprofits
Wisconsin State Journal
May 21, 2007
Every September for 26 years, tens of thousands of people filled the grounds of Edgewood High School in Madison for Edgefest, a three-day fundraiser with beer, carnival games and live music.
When the event ceased in 1999, people were shocked. How could something so successful not last?
Behind the scenes, the view was different. The event still raised $47,000 after expenses, but that was down from a one-time high of $128,000. The larger issue was manpower — it sucked dry the energy of staff members and parents.
"They were almost worn out for the rest of the year," said Principal Bob Growney.
The scenario doesn't surprise Charity Navigator, a national nonprofit organization based in New Jersey that evaluates the financial health of charities. It reviewed fundraising receipts from 5,177 charities and concluded that special events are an exhausting, difficult and often inefficient way to raise money.
The study, released this month, found that charities spent $1.33 to raise $1 in special events contributions.
"It's a horrible way to raise money for the vast majority of charities," said Trent Stamp, Charity Navigator president.
Local fundraising experts don't necessarily agree with that, and they point out that special events are invaluable for reasons beyond money. But the study's basic premise rings true, many say. Sometimes more isn't better, and perhaps yet another gala or fun run isn't the best use of staff and volunteer time.
"I'm going to kind of go out on a limb here, but I would say that half of all special events out there are not bringing in the net revenue that would justify the event," said Bob Sorge, executive director of the Wisconsin Chamber Orchestra.
Profits can slink away
If budgets for special events aren't closely monitored, profits can quickly slink away, said Kate Shillin, director of development for Special Olympics Wisconsin. "It was nice to see this study because I think there are a lot of misconceptions about what it takes to run a special event."
The study comes with a major caveat: Making money isn't the only goal of a special event. Sometimes it's not a goal at all.
"You may have one event that's a cash cow, but you may have another one that's so core to your mission that you need to do it, even if it just breaks even," said Connie Beam, director of development for Olbrich Gardens in Madison.
Events seen as 'friend-raisers'
Sue Abitz, executive director of the Breast Cancer Recovery Foundation in Madison, calls special events "friend-raisers." They provide free publicity, increase awareness, celebrate accomplishments, differentiate one charity from another and cultivate future contributors.
"They're a good way to schmooze prospective donors. Six months later, you might get a big check in the mail," said Jeff Davis, president of Whitetails Unlimited, a national conservation group based in Sturgeon Bay.
Still, the study underscores a potential pitfall: mission shift.
"This is when an organization spends so much time making sure its fundraising is successful that it takes time, money and energy away from what its core mission is supposed to be," said Jean Knaack, executive director of the Road Runners Club of America, which fields calls from charities wanting to sponsor fun runs.
Special event success stories
Many state and local charities said they make good money off special events. According to the national study, Special Olympics Wisconsin spends just 24 cents to raise $1 in special events money, and the Dane County Humane Society spends just 25 cents.
HospiceCare in Fitchburg nets about $100,000 on its annual Butterfly Gala, and Vilas Zoo made $25,000 after expenses from its inaugural Zoo Run Run last September.
The venerable Art Fair on the Square, now preparing for its 49th year this July, nets about $300,000 annually for the Madison Museum of Contemporary Art ?— about one-seventh of the museum's budget.
"When they help, they really help," the museum's Nicole Allen said of special events.