Do you have a big event that raises a lot of money but silently wipes out your revenue?
It's quite possible. The Veritus Group Blog points out the potential problem at Those Awful Events:
In most cases, [a fundraising event] sucks energy, resources, time and talent away from really investing in a major gift program that establishes relationships with donors.... [F]or all that time and money you spend on events, the net revenue will come nowhere near what you could achieve by running a robust major gift program.
The ROI of an effective major gift person can be extraordinarily high. That person should not be hoofing it around to help make a big event come together.
But you should apply the same thinking to all staff who work on your events. It may be that the event is a huge waste of time compared to other things they could be doing instead.
When you evaluate an event, look at net revenue and opportunity cost. That means:
- Count not only hard costs of the event, but put a value on the time spent by staff. If someone spends 200 hours working on the event, the cost is 10% of their salary and benefits.
- More important, every hour someone spends on the event is an hour they're not doing something else. If they activity they're not doing is fundraising (or anything related to fundraising, like stewardship) -- make sure the expected return from the event for that time is higher than the return for what they would have done otherwise.
When you apply this thinking to major donor officers and executives, it's quite likely the opportunity cost that's going into the event is a bum deal. But it might also be true of any staff.
Some events are amazing revenue-generators. Others are like hidden vampires that suck revenue out of the organization. Make sure you can tell what kind you're doing.