As you prepare to plan a fundraising event, one thing is crucial before you even start:
press that mental switch to think like a business — focusing on the cold numbers.
There are expenses to keep track of, especially when it comes to organizing a physical event. Clearly, your objective is to invest a certain amount of money to get a positive ROI.
However, that’s far easier said than done.
Where the problem is
The cold calculus says that nonprofits should aim for a 35% or less expense ratio, meaning paying $35 for every $100 raised.
Depending on the size of the organization, the ratio will fluctuate a few percentages up and down but generally speaking, 35% is the limit.
The problem here is that the majority of nonprofit organizations aren’t able to achieve such results.
Only a handful of nonprofits can pull off a Met Gala-like type of event.
The rest have to think about everything to charm the right type of people — people who are motivated enough to give to the cause.
From the promotion and making sure the event is safe to the type of venue and every little thing in between, the devil is in the details.
1. The cost is often too high
This is particularly true for small nonprofits who are at a distinct disadvantage compared to their larger peers: Putting upfront a significant investment for an event can seriously strain the already thin resources.
2. There is a limit of how many people can attend the event
Any venue is limited in terms of how many people it can hold, meaning you can’t maximize the reach, participation, and ultimately, revenue.
If that’s not enough, there is always this:
3. Risk of an event being ruined or diminished beyond your control
A notable guest or two may not arrive, health and safety concerns about an ongoing pandemic may evolve, the weather may not be in your favor, and so on.
In-person events are far from being the best possible option for generating funds, but they are so deeply embedded in our culture that nonprofit organizations continue doing them.
Luckily, there are better fundraising strategies to utilize existing resources and make the most out of your fundraising efforts.
Doing things the online way
As nonprofits look to save time and money, they turn to online fundraising to make it as easy as possible for donors to give.
Naturally, the persisting pandemic provided a major push to the online way, practically forcing many to say goodbye to live, on-site events. This gracious contribution to the online explosion of donation campaigns uncovered the fact that going virtual has plenty of benefits worth exploring.
Perhaps the most important one:
1. Online fundraising is very ROI-friendly
According to the 2021 M+R Benchmarks Study, online revenue for nonprofits increased by 32% in 2020. The overall increase was largely driven by more people giving as opposed to people giving more.
The growth was underlined by nonprofits’ spending on digital ads, which grew by 33% in 2020. Focusing mostly on direct fundraising ads but also lead generation, branding, and awareness, they spent an average of ten cents for every dollar raised in online revenue.
In fact, for every dollar spent on search, nonprofits earned a whopping $4.78 in ROAS (Return on Ad Spend)!
2. It’s a more cost-efficient option
For starters, there are no rental fees or expenses related to catering and staff. Certain physical event factors such as decorations, food and drinks, and entertainment play a big role in creating an inviting experience that donors will want to be a part of.
There is none of this in a digital event. Well, maybe there’s a fancy floral background involved and the platform you use to host the event, but that’s it.
As a result, you can save a lot on planning, manpower, and money, allowing you to focus on raising more funds by making the most with what you have.
3. Virtual events for fundraising considerably expand your reach
There are no geographical restrictions, which allows you to engage remote donors. At the most basic level, all you need to do is send them a link to your website or event, and anyone with an internet connection can contribute, anytime.
Invest in your website’s donation experience
As the evolution of in-person initiatives, online fundraising offers plenty of event options for engaging your target audience. Whether it’s a livestream, virtual gala, market, or auction, viewing party, or any other type, you’re meeting donors where they already are.
Smart nonprofits are recognizing the value of this online model and are slowly taking the technological leap forward to replace physical events.
But it’s not all sunshine and rainbows.
More than half of nonprofits are leaving serious money on the table by not offering a personalized, on-site experience. Instead, they redirect donors to another relevant form or webpage.
This directly affects their ability to receive donations due to unnecessary friction in the donation process, which is also hurting the existing trust level between a nonprofit and a donor.
Based on the info I’ve shared here, it would be tempting to say that you should allocate most of your budget and effort to digital advertising. It seems to work, right?
Wrong. Advertising isn’t everything. It’s just one of the many ways to boost the effectiveness of your fundraising campaign.
I’d even argue and say it’s meaningless if your user experience is poor and the entire donation process is underwhelming.
Therefore, your website donation process is one of the most important things you need to invest in to engage donors online by going beyond the traditional donation forms (hint: this is what we are all about).
So, the next time you consider throwing a physical event to raise some money for your nonprofit, think again.
The costs of online fundraising are minimal compared to the physical methods, yet the ROI is much higher as literally anyone and everyone can attend and support an event from the comfort of their home.
Truth be told, people aren’t really that interested in attending, with all that’s going on in the world. That in itself is a major opportunity — if done the right way.