Many small- to mid-sized nonprofits consistently grapple with the question of how to increase gala revenue. Specifically, we frequently get asked, “How do we raise $1M with the gala?” This question almost always comes once an organization hits the $500K revenue mark. “How can we double it to get to $1M?”
With nonprofits becoming increasingly reliant on galas for revenue generation, this is a question worth answering. And fortunately for you, we have solutions. Over the next 12 months, in a series titled “Raising the first $1M”, we are going to chronicle an engagement with a client seeking to raise $1M from their annual gala. The frequency of the updates will be dependent upon progress toward key milestones during the planning process. “Raising the first $1M” will be separate from our regularly published newsletter.
To receive updates and follow along, please click here to be added to our special email list for the series.
Where it began…
We were retained by a small nonprofit to produce their annual gala. Before engaging us, their gala revenue maxed out at $500K. The client felt confident that there was space for revenue growth, but unsure of how to achieve it.
Our method for gala planning is to design and execute a highly scalable and sustainable event. To do this, we invest time working to understand organizational culture. Organizational culture heavily influences, among other things: an organization’s temperament for change, communications practices, external relationships, risk tolerance, and money values– all of which strongly influence fundraising outcomes. We have found it useful to observe each of these factors as we begin to design the event model, while engaging with clients as thoroughly as possible through the process.
In this case, our observations revealed:
- Strong enthusiasm for revenue growth coupled with resistance to change
- Highly invested institutional donors
- Informal ad hoc fundraising structures
- Opportunity to strengthen communications practices
- Growing attention for the mission with emerging audiences across key demographics
- Awareness of deficiencies and a willingness to improve practices
As we assessed the possibilities, we determined that it was more important to first win trust from our new client to produce stronger long-term outcomes. This engagement was their first experience with an agency, and we recognized the importance of establishing confidence in our expertise. We were able to create some wins by:
- Offering board coaching and support
- Introducing an audience development plan to identify new revenue streams
- Refreshing the format of the event
- Heavily leveraging communications as a foundational element of how audiences experienced the event
These smaller incremental changes resulted in a 20% increase in event revenue for this engagement. This was primarily achieved through audience development, which is a central component of fundraising. Each event typically includes five audience archetypes, and we implemented a fundraising strategy for each. The archetypes included sponsors, honorees, funders, individual donors, and newbies, each of which holds different interests and engagement journeys. We successfully leveraged the archetypes in order to achieve that revenue increase.
It took three years of these kinds of incremental wins before the client was finally ready to commit to a strategy to raise $1M, which will translate to increasing gala revenues by approximately 40%.
In our next installment, we will share updates on the initial planning phase, which kicks off the journey to $1M.
Stay tuned!