It’s My Party

But is it worth having?

So I received yet another invitation to a Gala, and it’s hard not to hold my breath as I open the envelope. Even before I open the envelope (yes, generally still snail mail), I see the return address with the name of the organization that the Gala is supporting. Usually, my initial thought is “oh, I do love that organization — let’s look at the details”. But more and more often, the honoree’s name (or names) is listed just under the name of the organization. At this point — even before opening the envelope — I’m in a quandary. I like the organization, but I have no idea who the honoree is. Or, at other times, I’ll see that I really like and respect the honoree, but I don’t care for the organization. What to do? I haven’t even opened the envelope to see the date of the event, how much is being charged, who’s included a handwritten note telling me I should come, and if there’s entertainment that I’m interested in.

Cue the moment where I start hoping that I’m already booked on that date.

I’m not sure when the word Gala began to be used for charity fundraisers, but my guess is that the word “fundraiser” was too in-your-face to successfully get people to come to a “party”. I’ve seen the description “Gala Fundraiser”, which is more accurate, but rarely used.

Regardless, most nonprofits at some point have a Gala. Most larger nonprofits have them annually. And many of them make lots of money. In fact, for many organizations, the Gala is the biggest fundraising event/program/project of the year.

But consider this: A large number of Galas don’t actually make money. This fact seems to be one of the well-known secrets of the fundraising world — one that nobody wants to talk about.

A recent Forbes piece, “How to Organize the Perfect Fundraising Gala” does a great job of discussing the pros and cons of putting on Galas (they also get into very helpful details about the steps required to make it successful.) One of the comments made in the article is to only have a gala “if you don’t have another, ‘less costly’ way to activate donors.” Another great comment in the article, when discussing the high costs of food and drink at these events, is to make sure that you “…generate cash for your mission, not your chicken”.

Galas have their own special type of challenges associated with them.

First, I’ll start by clarifying what the “standards” for Galas are today. First, the organization will choose someone to be “honored”, and the qualifications for that someone to be honored is that they will be able to market hard to their personal mailing list, and to secure a big donation from their company (or from them personally, depending on the honoree). Sometimes there are two or three of these “honorees”, each with their own mailing list and large donation capability. Sometimes there is top-level entertainment, but less frequently than you might think. Almost always, there is a large venue booked, a committee of volunteers formed, and either an in-house event team, an outside event planner, or a combination of the two. Sometimes there’s an “ad book” (either “digital” or in print), and sometimes there’s a silent auction. Other than a few outliers here and there, these are the standard components of today’s Galas.

I used to think that all Gala honorees were people who had given lots of time and/or money to the organization. Happily, many of them are just that. But a decent amount of them are people whose companies have paid for them to be “honored” as a promotional tool. One board that I was on would pretty much let anyone be an “honoree” as long as their company paid $50K upfront.

Let’s say that the above doesn’t bother you, because money is money, and however the Gala is financed, as long as it makes bank, is just fine. You’ll attend or not attend, but you’ll buy a ticket or a table because you love the organization and just want them to be successful. Fine. Often, I do that, too.

But it’s often fraught.

When I’ve purchased those tickets or tables for some events, I’ll often bring guests who I think might enjoy knowing about the organization. This has backfired more than once, when the Gala is ridiculously long, painfully boring, “guilts” people — in this public setting — into making a gift publicly, or includes inappropriate or “in-crowd” speeches. The result of any or all of this is that my guests vow they’ll never have anything to do with that organization.

But let’s assume that I don’t bring a guest, and that the program is professional and fine. During most Galas, there is a moment in the program where the organization touts the amount of money that the Gala appears to be making by virtue of that event. Did you know that the vast majority of those announcements, where someone senior in the organization talks about all the money they just made, are speaking about gross dollars raised, as opposed to net dollars raised?

I’ve started a bit of a routine with many of the organizations I support. As I congratulate them on the large “take” from their event, I also ask them if the amount “raised” is gross or net. The answer I get is somewhere between “I don’t know” and “We don’t have the final numbers in yet”, and (my personal favorite), a blank stare, suggesting that the person I’m speaking with doesn’t know the difference. (For those new to this, a simplified explanation is that the “gross” is the total amount received, and the “net” is the amount left over after all costs are paid.)

Somewhere in that conversation, or in conversations following my initial query, I find out that the net amount raised is a small fraction of the gross. That’s because these events require a huge amount of resources, both in terms of hard costs as well as staff costs and opportunity costs, and sometimes the “net net” is closer to, well, a very small amount of money.

It’s unusual to find an organization that includes internal staff costs (much less opportunity costs) in their final summation of the amount of money that their Gala raised (i.e. the net amount.) Why is that? Is that because the event was a fun social thing that provided great promotion of the non-profit — and the net amount raised was less important? Is it because “everyone loves a party”? Maybe. All I can say here is that it breaks my heart to see how incredibly hard staff and volunteers work to put on these events, only to contribute a pittance to the bottom line.

As a board member and donor, I want to know that the organization I’m supporting is doing all they can to stay “on mission”, and to use every penny wisely. All too often, the “party” takes over everything, for a large period of time, and I can’t help but wonder if the mission — or the health of the organization — suffers during that period.

Knowing all of the above, some organizations have decided to add innovation to the Gala model. Here are several “new ideas” relative to Galas that I’ve seen used very successfully:

  1. Query your database, look at the demographics of your donors and prospects, and get a sense of the level of interest in the typical “rubber chicken” Gala. You’ll likely find that some of your donors/prospects love these parties, but many of your donors/prospects really aren’t comfortable at them. (This is often generational, at least in part.) Cedars-Sinai Medical Center did this type of study, and determined that a number of their constituents wanted something more casual, family-oriented, low priced, and fun. The resulting event, “Rock For Research” has quickly become the event that Board of Governors members (who the event is catered to), most enjoy and look forward to. And it makes money, too!

  2. Mandate an ending time for your events, and honor it 100%. I developed even more admiration for the Liberty Hill Foundation when I found out that they have a hard-and-fast rule that every Gala ends at 9:30 pm. (Other orgs, take note!)

  3. Give the recipient of the invitation an easy out — one that’s a “win-win” all around. Make it super easy and honorable for the recipient to not attend the event, by instead underwriting tickets for staff, supporters, grantees, students, and volunteers. If a donor does this, remember to refrain from telling or writing to them that you “missed them at the event” or “hope to see you next year”. Just say “Thank you!” (Another option is to have the person who received the free/discounted ticket email a quick thank you note to you.)

  4. During and after the event, drive home the organization’s mission, and note involvement opportunities. Yes — work to raise money to sustain and grow your organization. But also make sure to not waste an opportunity: While every person in that room may not be a prospective donor (or bigger donor), they can all provide some type of non-financial support. Whether it be volunteering, telling others about the nonprofit and what you accomplish (including younger people!), or providing a resource or referral, use the event’s existence as a broad promotional vehicle. I love emails received within 24 hours of a Gala, reminding me of the highlights of the event, thanking me for attending (or contributing), and letting me know how I can help further the organization’s mission. A video clip or two is always great, too!

Food for thought the next time you decide to “put on a show”.

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- Lisa