Special Events and Reporting Success
What should we report as success in the nonprofit world? Seems like a simple answer, but you never know.
The following question was recently posted to a chat board I subscribe to:
For our gala, should we report the gross revenue or the net after expenses?
There are so many layers to that question. First, if we want to earn the trust of the community and the donors, how can the answer be anything but “net”? If the event brought in $1M in revenue but cost $850,000 to produce, the difference between reporting “$1M” and “$150,000” is enormous as it pertains to engaging the community and making a difference, as well as how the community might view the nonprofit.
In the same vein, some of the answers were so surprising. Several people said that the nonprofit should report the gross revenue. I was stunned. And just because there was the question and subsequent answers that are just not “correct” is evidence that there is not a consensus on the issue, and that is scary.
Beyond the reporting, there was no discussion at all around the question, why are they doing the special event in the first place? If we know the cost to raise a dollar (CTRD) is the highest (non-beneficial) of any fundraising tactic, why was there no mention of major gifts, individual relationships, planned giving, etc. as a better option to maximize revenue and keep expenses low? It was as if there was no connection to the concept of what is best for the non-profit overall, as it pertains to fundraising effectiveness.
Special events have their place. They can be supportive of other activities that generate revenue. They can help develop a presence in the community that supports better messages about the importance of the nonprofit to the overall community. A special event can support elevating individual relationships by providing a built-in cultivation activity. But the numbers don’t lie…Special events do not have the same impact that major gifts, individual relationships, and planned giving do in the short term and over time.
