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May 16, 2018

Are events and galas still effective?

Nonprofits that rely on the annual “gala model” for fundraising may have to rethink that strategy. In this episode of the Smart Communications Podcast, Stephanie Thomas, CEO of Stetwin Consulting and nonprofit fundraiser with 25+ years of expertise in the field, discusses why events may no longer be worth the investment and offers advice.

Transcript

Sarah: Stephanie Thomas, who’s with me here today, is the founder and CEO of Stetwin Consulting. Stephanie’s got over 25 years of professional fundraising experience and in 2017 alone, her company generated an aggregate of over $25,000,000 in revenue through events for nonprofits. Prior to launching her business, Stephanie served as the president of Susan Ulin Associates, which was a really incredible consulting firm. I think it ran for about 28 years, right, that specialized in event management for nonprofits (and she started there actually in 1995 as an intern). Today, she serves on the board of the Nonprofit Coordinating Committee of New York City and she’s the past president of the Association of Fundraising Professionals, New York City chapter, or AFP New York. That’s where I met her, I was a board member there too. She’s done a lot of active work in the New York City fundraising communications world, so I’m really excited to have her here with me today to talk about events and what she sees happening in that space. Stephanie, thanks for joining me here today.

Stephanie:
No problem.

Sarah: So you and I had a really interesting conversation recently where you said that you thought the world was changing in a way in “the gala model”, that a lot of nonprofits follow, was kind of going away or at least changing. Why is that?

Stephanie: I think first by “gala model”, a lot of people are dependent on an honoree strategy. They do the same thing annually. They don’t change it up, and they rely on the same donors and I think all of those things are changing when it comes to honorees. There are so many more galas in the space that the competition is fierce. And coupled with that, how corporations respond to these invitations has changed a lot in the past 10 years. Even in the old days, a CEO could call their golf buddy and say, “will you be honored at my favorite charity?” And they said, “yes, how much do you need me to raise?” And they raised it. Now they say, “I would love to do it, but I need to go through my social philanthropy officer and sure it’s mission aligned”. There is a greater amount of responsibility or accountability that corporate individuals have that didn’t use to exist.

Sarah: So if you were a nonprofit that was kind of looking to diversify your income and you were thinking about events as a strategy to do that, but you didn’t have a regular gala or other fundraising oriented event in place, what would you advise? What would you encourage an organization to know? Would you tell them not to do it or would you tell them to get into it in a particular way?

Stephanie: I would tell them to make sure that if they are doing it, that it’s aligned with everything else they’re doing. A lot of people started holding events to raise unrestricted income, which every nonprofit needs, but it is not necessarily the right strategy for every nonprofit, because they don’t have access to people who enjoy going to events, corporate supporters are more interested in mission focus programs and not special events. There could be many reasons.

Sarah: So maybe a little bit of research before you do it, into who’s on your list. Would they come to events? Do you have the right people in your backyard to actually make this event a success from a ticket sales point of view? And don’t hold your breath that corporate sponsors are going to be a big income source.

Stephanie:
Exactly. And it’s also thinking about, is that the most bang for the buck? I always say events are the worst way to engage a donor. The end result is often not effective. People think it’s a success if someone has bought a $10,000 table at their gala every year for five years, but that’s $50,000. If you put that same time investment into that one person, and got them more engaged, they could easily make a more major gift and that’s where you see bequests and huge major gifts coming through the door. So keeping someone in your gala silo is often pennywise but pound foolish.

Sarah: Interesting. And let’s talk about those ever elusive but highly desirable millennials, because I know so many organizations are spending a lot of time thinking about how to engage them. Do they come out for events? How do they fit in, what do they want to do?

Stephanie: You know, they do come out and there are so many different types of millennials, like there are any other class of people. Many millennials don’t want the seated dinner, they want more of a cocktail setting. Some do want the seated dinner because it’s a good networking opportunity for the existing structure. But one question I’ve been asking myself, and some clients lately, you know when I meet these junior committees, junior boards–these 20 year olds, 25–at my core, I just don’t believe they want to go to the equivalent of the Waldorf Astoria and eat a chicken breast. I just don’t think that’s how they engage in the world. It’s not how they think about how they give back to society. So when they become the CEO or the executive vice president, are they going to want a gala ticket? And in my gut, I feel that answer is no. I don’t know what their answer will be, but I don’t think that’ll be it.

Sarah: And we’ve seen, some of our clients doing some thoughtful things about how millennials right now are parents, right? A lot of them have young children. So there’s also some interesting stuff happening in terms of getting the millennials out early or late, you know, so that they can get home and see their kids.

Stephanie:
And I think that’s a trend I’ve been seeing as well. When I first got into this industry 25 years ago, as long as your program ended by 10:00 PM, you were great. Then it became 9:30. A few years back, it was 9:00 PM, but even now people are saying, oh, the best events get out at 8:30, and I think that represents that change in society.

Sarah: I know, I know for me, I want to be at home, in bed, lights out by 9:30, if I can be.

Stephanie: If I can’t be out by 9:00 PM. [laughs]

Sarah: So you know, a lot of the people who listen to this podcast are people who work in nonprofits on the communication side and they hopefully collaborate very closely with their peers in fundraising, but we often describe the role of communications with fundraisers as the people who help build the connections and kind of chum the waters through communications so that the fundraisers have a list, have people who are paying attention, people who’ve been communicated with proactively, and then the development people can go fishing, as it were. But I’m curious how you see the role of communications around events and galas. What should their job be?

Stephanie:
I think the word communications in development is often misused and maybe across nonprofits in general, I think most people think of it as what is going out, and I think the future of fundraising, well, the past of fundraising really, also is what’s coming in and I think enough time is not spent on that feedback that is coming back to an organization because it’s that feedback that allows you to craft a good fundraising strategy, whether that is just pure analytics like who’s clicking on what and openin”g what type of communication to what people find important or, or even, um, how they feel about your organization. I sit on the development side often hearing things like, you know, people ask me questions as a consultant, should we send snail mail or should it be digital invitations only?” And I’m like, what’s your data telling you? I have no idea. These are not questions that can be answered in a vacuum. What does your data tell you? I also hear what type of event should we do? What should the theme be? Where should it be held?” These are all data based decisions I think, and I think if you’re not getting information back from your communities, whatever they are, then your fundraising program will never quite keep pace.

Sarah: So there’s an opportunity. I’m hearing, in what you’re saying to both ask, ask your list, look at the data, see what kind of events they’d like, where they’d like to have them, what time should they be, what do they want to do at those, but also maybe at the event or after the event to do some follow up and get some feedback. We’ve been thinking here and I’ve done some writing recently about how some nonprofits are creating a communications position, that’s like a chief experience officer, so I could see how that ties into this, right?

Stephanie: Absolutely.

Sarah: The communications job is to be a good listener, a good team that can monitor the experience of the donor and help optimize it.

Stephanie:
I love that. That is a great title, and every organization needs one, especially for strong fundraising. It’s all about relationships, engagement, and the more professionalized fundraising has to become. Sometimes people forget about that, that it’s really about people. People give to people– they always have and they always will.

Sarah: So if the traditional model is going away, like how long does that take? What’s going to happen? Like if I got a big successful annual gala, should I be getting ready to jump ship? When?

Stephanie: Today. I don’t consider myself the Thomas Edison of special events. I’m not foreseeing something that no one else can foresee, I don’t think. So to my way of thinking, if you can see the warning signs, it’s already too late, so I think it can take–I’ve been saying this for about four and a half, five years now–so I think it’s time to jump on a new bandwagon because it can take another five years to build in a new successful strategy.

Sarah: And the warning signs are ticket sales are getting harder or people aren’t coming back? What are the warning signs that your event might be in trouble?

Stephanie: Not so much ticket sales. I think fundraising proceeds are harder to come by. I see more and more organizations having to default to honoring board members, because they can’t find anyone else. The event is not fusing as well with our overall strategy and it can start cannibalizing other efforts, which is a sign that it’s collapsing upon itself. What I’m seeing, even people who are making the same money have fewer people in the room, which is also not why events exist in the first place. They are meant to bring in donors at a very basic level, our potential donors, and then move them up to other types of fundraising.

Sarah: So you want more people in the room, so you’re building more relationships, growing your relationship pipeline.

Stephanie:
Exactly, and then taking those relationships somewhere else outside of the event.

Sarah:
That’s awesome. So any parting advice for nonprofit fundraisers or communicators as they think about events?

Stephanie:
I just think everything is holistic and the age of silos is gone and the way so many organizations have fused development and communications is very smart — and I think the work is not done — and for anything to continue to grow and to stay relevant, these types of conversations have to happen all the time and it’s hard for a nonprofit because you’ve run out of bandwidth, but it’s just very important to keep meeting donors where they are.
Sarah: Awesome. Well, thank you for being here.

Stephanie: Thank you for having me.

THE SMART COMMUNICATIONS PODCAST IS HOSTED BY SARAH DURHAM, CEO OF BIG DUCK AND PRODUCED BY MARCUS DEPAULA. OUR MUSIC IS BY BROKE FOR FREE.

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