You’ve likely had to cancel a fundraising event (or many) as a result of COVID-19. You can’t simply lose that revenue, but how can you regain event-based revenue?
We’re several weeks into quarantine and you probably have canceled a fundraising event … or several.
Whether or not your organization is event-heavy for revenue, canceled events hurt your cash flow while also removing opportunities to meet with donors, gather interested folks together, share your mission, celebrate your work—and so much else that events accomplish.
In short, canceled events are bad for budgets, morale, and missions.
Nevertheless, you need to do your best to recover lost revenue and stay in touch with donors. Here are some tips for making the most of a canceled event. Of course, canceling an event is a major hit—but if you play your cards right, this is an opportunity to connect in a personal way with major donors and an opportunity to convert event attendees into actual donors.
As we see it, there are four event-based revenue streams that are in flux right now:
- Sponsorships and table sponsorships—i.e., those who have underwritten the event or paid for a full table or a booth
- Pledged sponsorships—i.e., those who have pledged to purchase a table or sponsor the event
- Tickets purchased for a now-canceled event
- Donations during the event—i.e., a silent auction or gifts made during a public ask
In addition to these traditional event revenue streams, your organization might have program-driven revenue from event participation—if, for instance, you host a fee-for-service camp or a week-long training that has been canceled. This is not donation revenue that needs to be recovered, but it is anticipated income that will be lost.
Recovering sponsorship revenue
Needless to say, it will take some hard work and creativity to recover this revenue, but it shouldn’t be impossible. Like most businesses right now, you should be expecting a bit of a loss. That said, don’t give up. If your organization’s event is worth sponsoring, then your organization is worth supporting.
Your first order of business it reach out to all sponsors. Lead with questions: how are they and what has changed for them; how has the quarantine affected their business or family? Then take an opportunity to share how the quarantine has affected your organization. The key here, however, is to make sure that your mission is front and center. The problem is not that your event is canceled; the problem is that your mission is essential, and your event is part of advancing that mission. (If you aren’t already thinking this way about events, you should be!)
Communicate the loss to the donor-sponsors as a hit on your mission, and then ask what they would like you to do with their gift. Remember to refer to their sponsorship as a gift—this is true, and you want to remind them of this fact. Ask if you can divert their sponsorship to a key program area that advances your mission and explain what that would mean. Or, if you have enough program areas (and informed donors), ask where they would like to divert their gift. Make sure that your donors are aware that you will send a new tax receipt indicating the 100% tax deductibility of their gift (if this is changed from their sponsorship).
Acquiring pledged revenue
With regard to pledged sponsors, all the same principles apply. Lead with questions, and when explaining your canceled event, make sure you’re clear that the problem at hand affects your event but more importantly it affects your mission. Remind them of their pledged gift and ask them if they are still interested in fulfilling their pledge but diverting the gift to another program area. Make sure they are clear about the significant impact of their gift, how important they are to advancing your mission. Don’t sound desperate, but don’t be afraid to communicate that these are difficult times. Everyone is tossing around the phrase “now more than ever”—but don’t shy away from this line and communicating to your donors how their support is more important now than ever before.
After the select group of sponsors, you have the much larger group of individuals who bought tickets to your event. Here you simply need to email everyone who purchased a ticket, explain the situation (again, keep your mission front and center), and apologize for the canceled event. Then provide options: “where would you like to divert your ticket purchase?” You should have several options for them to support different program areas and one option should be a full refund on the purchasing credit card.
In other words, don’t simply refund the purchase. Give everyone an opportunity to redirect their ticket purchase towards a donation, and make sure that you make clear the value of the donation. As always: highlight the mission and all that their gift can accomplish. Do be honest with yourself—you probably won’t salvage 100% of purchased tickets, but you want to do your best to save as much as possible. That means treating ticket-buyers like donors or prospective donors. If you haven’t before, make the connection between the ticket purchase and the mission and offer them the opportunity to advance that mission as a donor.
The ask at the event
Finally, you have planned to make an ask at the event. Maybe you planned to have hundreds of people in a room, a cool donations “thermometer,” and a number attendees could text to fill the thermometer in real time with their gifts. Or maybe you were planning on an auction or a pledge drive. Suddenly all that is gone—the enthusiasm, the shared excitement, the live thermometer updates, the auctioneer voice, the pledge paddles going up and down, and the chance to share your organization’s growth, success, and mission in-person with your supporters.
A lot of that is gone, yes; but all is not lost. The unique experience of the event is lost, but your organization and its importance aren’t going anywhere. After you’ve contacted sponsors, pledges, and ticket-holders, next contact everyone, including those who fall into the previous groups. Follow the same model: the loss is not the event, but what the event means for your mission. Remind everyone that the event is not about the event but the mission and then ask them to support your organization and mission anyway, even without the event.
This is why the current quarantine can actually be turned into an asset and opportunity for many groups. Suddenly, you are forced into the position of asking people not to give to a dinner or an event or a sponsorship—but simply and precisely to support the mission, like most donors do anyway. This is a forced situation for “event fundraisers” to become “mission-based fundraisers.” And individuals who might merely have been event attendees now have an opportunity to become fully fledged donors. And keep in mind: your net “event” revenue should increase dramatically as you retain most event donations but eliminate the costs associated with the event.
Making up for non-charitable revenue
As for those groups with revenue from non-donor participants, you should certainly send them your fundraising email—the one that announces the canceled event to the house-file and solicits gifts. These people planned to pay to visit your organization. If they can’t attend the program, it’s not unimaginable that they’ll be willing to make a gift. The purchase was a transaction, of course; so they are in a quid pro quo mindset—but they still think that you have something of value to provide, something they wanted to give money for. If they are now saving that money, it wouldn’t be shocking if they still wanted to help your organization survive these difficult times.
That said, you won’t recover all or most of that revenue through this strategy. You need to turn to your major donors. Explain the situation to them—the projected loss of revenue for reasons A, B, and C—and invite them to help you through this difficult time. Of course, be sure to communicate your organization’s strength and stability through these stormy waters, and make sure they know it’s because of them: “thanks to your generosity we can weather this storm.” If you have good relationships with major donors, they will likely want to help you through this, and if you’re clear and honest about the hit you’re taking, they’ll be more willing to help.
Diversify your revenue
At the risk of rubbing salt in an open wound, I would be remiss if I didn’t mention the importance of diversified donation revenue. If your organization is too event-heavy, it is limited in many ways. Now we are seeing that event-heavy organizations are also extremely vulnerable to a crisis or pandemic. (You probably didn’t see this one coming—we didn’t either.)
This is an excellent reminder to strive to diversify your revenue streams. Make the necessary investments of time and capital to build out a healthy, diverse, and balanced fundraising program that includes direct mail, digital outreach, foundation grants, and major donors.
That said, pivoting and taking measures right now to recover lost event revenue is the first step towards creating a more well-rounded fundraising program. As my colleague Matt Gerken wrote last week, it may seem like “too little, too late” to diversify right now. On the contrary, hard work and good fundraising practices can pull your organization through this economic downturn. Once we are on the other side of this, you’ll be on your way to driving more stable donation revenue.
For the next several weeks, Philanthropy Daily will be a resource for fundraisers in the midst of the COVID-19 pandemic. Check back daily for new articles addressing news about coronavirus and philanthropy and providing strategic and practical recommendations for weathering this storm as a fundraiser.
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