Q. Our nonprofit holds an annual fundraising gala that raises about $40,000 gross, $25,000 net, towards a $800,000 annual budget. The executive director and some board members feel that this fundraiser is ‘too small’ and ‘not worth our while’; how do we decide whether it is or not, and what then?

Annual fundraising gala by Jacek Dylag at Unsplash

A. We are often asked versions of this question. Annual fundraising galas and other similar benefits are wonderful friend-raisers and community builders, but rarely do they find balance on the financial scales when you consider the time and energy that could be spent on other methods of fundraising instead of the event. They are, in fact, one of the least cost-effective ways or raising money.

That is not to say you should never host a fundraising gala. Galas:

  • introduce new people to the organization
  • give people an excuse to celebrate and honor individuals, and
  • have a high-end cache that high-end volunteers want to be associated.

Just consider the tradeoffs.

When we recommend against a fundraising gala for an nonprofit, we often here these common objections:

“The administrative work is done by someone who was hired with this event listed in his/her responsibilities.” That may be true, but are there other areas that could use the extra dedicated hours? Could that person spend the same hours, intensively for months, working on stewarding, upgrading, and retaining donors? How would that impact your budget?

“Our annual fundraising gala is run by volunteers. It doesn’t really cost us anything to produce.” What else could your volunteers be helping you achieve? If those who are committed to raising money were to join the development committee and work with major donors, it could easily exceed the $25,000. And how much staff time is used supervising the volunteers?

“But our volunteers like working on the annual fundraising gala because they like being a part of a marquee event.” There is no doubt that this aspect of their commitment is valuable to your organization, but it is valuable as community building and strengthening. If you have the staff, volunteers, time and funds to support these events, then, continue the event.

But, consider how to grow the relationships with the attendees. Starting with getting the contact information for everyone who attends by sitting at a donor’s table. Then you can think about how many of those in attendance are major donors or have the capacity to be? How can you turn each one into a major donor? And how you can you deepen their involvement beyond the event? 

Ultimately, the decision is yours as to whether to proceed or stop the event. Just make sure you know what the true benefits are for your organization.