It’s the most common way nonprofits think of fundraising. Galas and transactional events. It's what Boards enjoy and know. People cling to their gala and defend it fiercely when you suggest it's not the best way to raise money. Why?

There are some galas and events that might be successful. But the vast majority are transactional and not relationship-based fundraising. So, if we define “success” as building powerful and lasting relationships for our nonprofit the gala fails there. Organizations that relied on galas and transactional methods suffered during the Covid pandemic, those that had relationship-based fundraising weathered the storm. You don’t see big universities using galas as a major fundraising tool. That’s because they are deeply invested in building relationship-based fundraising. It's demonstrably the most powerful form of fundraising.

Anytime a Board of Directors defends their gala as a success and a money maker I ask them one question that rarely comes up. “Do you count staff time”? That means when you tally up how much that gala cost your organization vs how much you raised, do you count staff time? I would say in my long career I have heard that they do very rarely. Most leave the largest cost off the ledger.

Most small and medium nonprofits have a single development officer. It's very common to have an Executive Director and/or Board ask that Development Officer to do 3-5 jobs. Including the massive time suck that is the gala. Galas burn out development staff because the same group of people demand that the Development Officer write grants, create a Major Gifts program, get multiple mailings out on time and maintain a database of donors. Galas commonly can eat up 1/3  or more of a development officer's year.

If your working to build a vibrant and diverse fundraising program, galas are like swimming in a race with your clothes on. Even when Boards actually come through on a pledge to help, there are tons of details and work that rarely are seen or understood.

I advised an organization several years ago that had a very popular “$1,000,000 Gala”. That’s how the Board understood it. That’s what they called it with pride. But it was quietly loathed in the Development Office. Because they never had time to truly develop other more lucrative fundraising methods. Behind the scenes, two of the three development staff worked at it for 6 months. Every year the Board promised to dig in and help, every year this pledge slowly evaporated. The music, venue, dinner, drinks, invitations, flowers, auctioneer and security cost over $450,000. When they privately cost out staff hours, they added on another $133,000 in staff costs. So, it was actually a $417,000 gala. But there’s more. The organization didn’t have a major giving program after 20 years!! They didn’t because they spent so much time on the gala. They had donors coming to their gala giving $2,000 that were giving other nonprofits $75,000.

This is the real heavy cost of the gala, the time and focus stifles growth in other areas.

Furthermore, a secret development officers know that others don’t know is that “converting” a Gala donor into a major donor is very difficult. I am honestly not sure why. But once someone gives you $1,000 for a gala that’s where they sort of lock into. It's where a donor enters your organization and for some reason it's where they stay.

What's required here is courage. Board Members have to step up and ask a larger question. “Are we investing in relationship-based fundraising”? And every time someone comes up with some gimmick form of fundraising ask again. “Will this build relationships for our organization”.

Of course, you cannot just go and cut off a revenue stream without investing in replacing it with something else. I suggest starting a small Major Giving program, hiring or assign someone to work just on that. If you replace your gala with a few small major gift events of under 30 people each one can commonly raise much more money with much less work and expense. Or there may be other ways your organization can replace that revenue. As long as it's supporting your strategic growth, as long as it builds powerful relationships for your organization.

Here’s your checklist if you have a gala and want to discuss it:

• Count all the costs of the gala vs what you raise.
• Have an honest conversation about why people support the gala given all the data.
• Identify other methods of fundraising that have more potential to build deep relationships for your organization.
• Invest in the proper staffing to implement several strategies.

Galas are great for celebrations of big anniversaries or great accomplishments. They have their place, but if that is where your Board and staffing are focused on when it comes to fundraising you're missing out. You are settling for pennies when you could have millions. There are better ways to raise a lot more money to power your mission.  So please have the conversations and kill your gala!