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2007 Special Events Study

During the spring and summer months, it seems as though charities hold special fundraising events almost every weekend. We all receive requests to attend and support charity-sponsored events, ranging from the American Cancer Society's "Relay for Life" to the Cleveland Animal Protective League's "Fur Ball", from spring galas to bowl-a-thons to (insert mildly strenuous physical activity here)-a-thons. But, as a donor, does it make sense to support these special events? Or would the organization be better served by you skipping the 5K and making a direct contribution? Our users have repeatedly asked us these questions, so we decided to do what we do best, compile and analyze the data, and give you some answers.

Methodology

We began by entering special events data (special events contributions, revenue, and expenses) from the IRS Form 990¹ for all 5,177 charities² in the Charity Navigator database. We then took a closer look at three main areas: special events reporting, efficacy, and efficiency.

Reporting: Charities that reported $0 in special events contributions, $0 in revenue, and $0 in expenses were classified as having no special events. Charities reporting $0 in contributions, but some amount in special events revenue³ and/or income were considered to be reporting special events information incorrectly. This is because the purpose of special events is to raise contributions; therefore we do not believe that these charities are reporting credible information. It is nearly impossible for their special event to actually have yielded $0 in contributions, no matter how poorly run it may have been. Charities that we determined were reporting special events incorrectly were excluded from the rest of the study.

Efficacy: Contributions from special events were compared with an organization's total contributions, using only data for charities that hold special events. Average total contributions were also calculated.

Efficiency: Total special events expenses⁴ were divided by total special events contributions received, to determine approximately how much it costs to raise $1. This calculation of special events efficiency was then compared with fundraising efficiency, a component of Charity Navigator's standard analysis.

Results

1. About half of all charities use special events as a way to fundraise. 49% of the charities in our survey reported conducting special events in their most recent fiscal year.
2. Special events generate 15% of all contributions to organizations. While this may not be a large percentage, it does add up to a significant amount of money. According to Giving USA 2006, donors gave more than $260 billion to charities in 2005.⁵ Extrapolating from their study and ours, we can conclude that Americans gave roughly $40 billion through special event-related contributions last year.
3. That being said, we found that special events are inefficient in comparison to overall fundraising activities. On average, the charities we studied spent $1.33 to raise $1 in special events contributions, compared to an average overall fundraising rate of $.13 to raise $1. Only 15% of the charities that held special events were more efficient when using special events to fundraise than they were in their regular fundraising activities on the whole.
4. The most efficiently run special events are held by organizations that are the least likely to use special events as a fundraising mechanism. Religious charities, of which only 16% actually hold special events, spend $.71 to raise $1 of special events contributions.
5. Health and arts charities are the most likely to hold special events. 71% of Health charities and 69% of Arts charities held special events in the last year to raise money for their operations.
6. Charities in the Northeast are more likely than their peers in other areas to hold special events. 57% of charities in the Northeast reported that they use special events to fundraise.
7. Many health charities would benefit from shifting their fundraising focus away from special events. These organizations were found to be the most inefficient in special events fundraising, spending $1.84 to raise $1 in contributions. Health organizations also have the largest gap between their overall fundraising efficiency and the efficiency of the special events.
8. A large percent of charities are reporting their special events data incorrectly, with no recourse from state or federal regulators. Of those organizations that use special events to fundraise, it appears clear that 46% are reporting the financial information for the events incorrectly.

Reporting:

Efficacy:

Health organizations received nearly 28% of their contributions from special events and charities located in the Northeast received about 20%, the highest percentages; Animal charities and those in the Midwest received the lowest percentages, approximately 9% and 13%, respectively.

Average special events contributions to Health organizations were the highest by far at $6.1 million; charities located in the Southwest also received the highest special events contributions at $6.5 million. The lowest contributions were received by Animal charities ($330,000) and organizations located in the Mountain West ($480,000).

Charity Examples:

The following five organizations received the highest amount of contributions from special events, out of all organizations that hold special events. These organizations are all large, well-known, national organizations with high-profile special events. Not surprisingly, all five work in the Health field. Relevantly, their special event efficiency rates are close to, if not better in some cases, than their regular fundraising efforts.

Charity Name	Contributions from special events	Special event efficiency	Fundraising efficiency	Events	Highest grossing special event
American Cancer Society Southwest	$468,971,271	$ 0.11	$ 0.21	Relay for Life, Making Strides Against Breast Cancer, Daffodil Days, Golf Tournaments, Galas, Coaches vs. Cancer	Relay for Life, $352,193,452
Muscular Dystrophy Association Southwest	$145,862,463	$ 0.21	$ 0.17	Jerry Lewis Telethon, Bowling Against Dystrophy, Golf, The Great Walk, Hop-a-Thon, Lock-Up, Shamrocks Against Dystrophy	Jerry Lewis Telethon, $38,454,658
The Leukemia & Lymphoma Society Northeast	$137,104,160	$ 0.23	$ 0.17	Team in Training, Light the Night Walk, School and Youth Programs, The Leukemia Cup Regatta, Man & Woman of the Year, Hike For Discovery	Team in Training, Rock n' Roll Marathon, $8,118,659
March of Dimes Northeast	$127,053,635	$ 0.13	$ 0.17	WalkAmerica, Mothers March, RIDE, Jail and Bail	WalkAmerica, $93,736,262
Juvenile Diabetes Research Foundation International Northeast	$120,608,999	$ 0.19	$ 0.08	Walk to Cure Diabetes, Ride to Cure Diabetes	N/A

Efficiency:

Health and Arts organizations were the most inefficient in their special events fundraising, both spending more than $1.80 to raise $1 in contributions. Religious organizations were the most efficient, spending $.71 to raise $1. Charities located in the Midwest were by far the most inefficient, spending $2.40 to raise $1, while organizations in the Northeast were the most efficient, spending $.82 to raise $1. Even the most efficient organizations spent significantly more than the overall average fundraising efficiency of $.14.

Charity Examples:

The following are the top five least efficient and top five most efficient of all charities holding special events. The least efficient charities all work in the two areas that are most likely to use special events as a fundraising method, Health and Arts. The top five most efficient are spread across several different categories, and the majority receive a 3 or 4-star Charity Navigator rating.

Least Efficient

Charity Name	Category	Region	Special event efficiency	Fundraising efficiency
Arthritis Foundation - Michigan Chapter	Health	Midwest	$216.03	$ 0.15
Maymont Foundation	Arts, Culture, Humanities	South	$ 88.28	$ 0.14
Connecticut Public Broadcasting	Arts, Culture, Humanities	Northeast	$ 68.61	$ 0.17
National Multiple Sclerosis Society, Greater North Jersey Chapter	Health	Mid-Atlantic	$ 53.41	$ 0.58
National Liberty Museum	Arts, Culture, Humanities	Mid-Atlantic	$ 42.63	$ 0.14

Most Efficient

Charity Name	Category	Region	Special event efficiency	Fundraising efficiency
Hartford Symphony Orchestra	Arts, Culture, Humanities	Northeast	$ 0.001	$ 0.15
Aga Khan Foundation, USA	International	Mid-Atlantic	$ 0.003	$ 0.01
Habitat for Humanity of Charlotte	Public Benefit	South	$ 0.009	$ 0.06
Seattle Audubon Society	Environment	Pacific West	$ 0.011	$ 0.09
Girl Scouts of San Jacinto Council	Human Services	Southwest	$ 0.014	$ 0.32

Conclusion:

Without question, special events seem to be an extremely inefficient way of raising contributions. The majority of charities are more efficient in their overall fundraising than when they raise contributions through special events. So why do they continue to use these special events as fundraisers? And should donors support these special events, or instead give money to the charity as a strict contribution?

Keep in mind that there are advantages to special events that cannot be measured: raising awareness, rewarding members, cultivating prospective donors, PR exposure, and brand building to name a few. These benefits are impossible to measure, and vary greatly from organization to organization.

We recommend, as always, that donors take the information we present as just one piece of the puzzle in making their giving decisions. Each donor must decide for himself whether or not the additional benefits of special events are worth the trade-off for efficiency, or whether he would rather make a contribution directly to the organization. It's obvious from these results that an efficient charity does not always run an efficient event, and vice versa; each charity should be considered on a case by case basis. If there's an organization you feel good about supporting, and you don't mind sacrificing efficiency in order to support a charity event that you believe has the power to make a difference, it's your call.