Cathy Pharoah asks if charities can expect more from events as they embark on a tough fundraising environment

Thanks to the popularity of high-profile brands, such as the London Marathon, Comic Relief and Race for Life, events are one of the most eye-catching features of the annual fundraising calendar. As a result participation in such events has become a lifestyle choice for thousands of the donating public.

The term ‘big’ often features in events – for example, Macmillan’s Big Sports Day and World Jewish Relief’s Big Bagel Brunch. However, the lifeblood of charity events fundraising in the UK is the thousands of smaller, local initiatives run every year. But how far does the value of all the energy and resource invested in events fundraising match the return achieved, or the public relations value? This special focus provides new data on the contribution of events fundraising to charities’ income and assesses recent trends in its value.

Share of income from events

Events fundraising has become big business over the past decade. For example, Cancer Research UK’s Race for Life  raised £69m last year, representing an annual increase of £4m. Drawing from CaritasData’s largest 5,000 charities in the UK, over 1,000 received regular income from events. Surprisingly, the figures show that:

• Although events income contributes a much greater amount to the bigger charities, it contributes a much larger share of income to the smaller ones (14 per cent of fundraised income to the largest, compared with 24 per cent to the smallest); and
• Medium-sized charities in the two middle bands generate almost the same proportion of income from events fundraising (19 per cent and 20 per cent).

Figure 1: Events income by charity size

These results suggest that fundraising from events contributes a greater proportion of total income to the smaller charities. Therefore it is even more crucial for them to produce cost-effective and successful events, than it is for larger charities.

When it comes to determining how much charities of differing size should aim to raise from events, there is no one size fits all approach. Some of the highest earning events are run by organisations dedicated only to this discipline, such as the Edinburgh Military Tattoo (Charities) Ltd, and Walk the Walk Worldwide. Most charities are juggling events fundraising with other approaches. Clearly, fundraising charities place varying priority on revenue generated by events and some are investing much more in its potential than others.

Recent patterns and trends in events income

The vital question is what the outlook is for events fundraising in the unpredictable post-recession environment, characterised by a significant focus on spending cuts. Event incomes were examined for a sub-set of 670 charities and tracked for four years. Trends in the annual growth rates show that:

• The average trend for all charities was strong annual growth (15 per cent) until 2007 then a steep fall, followed by a small recovery in 2008/09, which did not beat inflation; and
• Smaller charities with income less than £1m experienced less growth in events revenue up to 2007, but continued to grow at the point when income to the larger charities began to fall. These rates then fell sharply in 2008/09, when larger charities began to recover.

It is difficult to predict whether the smaller charities will now begin to see a recovery in events income following the pattern of the larger charities.

Challenges for the smaller charities

These trends suggest that the smaller charities took longer to maximise the benefit of events fundraising from the boom years up to 2007, before the credit crunch. It may also take longer for them to recover in this area following the recession. With less flexibility and reserves to draw upon in adapting their approaches, it is more difficult for smaller charities to respond to changes in the fundraising environment. Since events revenue is important to charities with income below £1m (almost one quarter of fundraising income and 14 per cent of total income) this represents a challenge. One opportunity for such charities may be the government’s Transition Fund of £100m, which offers grants to eligible charities to help them deal with a funding environment that is in flux.

How should events fundraising be tackled?

Benchmarking exercises often show that special events generate lower return on investment compared to other fundraising disciplines. As an example, visit Norman Olshansky’s blog post on NFP Consulting. Fundraising events play a vital role for many charities, but it is important that they sit within an overall strategy focused on maximising overall fundraising opportunities. It may be that events play an increasingly important role in engaging new donors, strengthening relationships with existing donors, volunteers and staff, and providing community awareness raising for funding. In the current climate, charities will be trying to raise large amounts of money with minimal investment. They may be looking more critically at the resources required to run events on which they depend, so it is important not to overlook the added value of events fundraising in bringing past, present and new volunteers, donors and constituents into the organisation. Well-designed events that are keenly focused on the charity’s key supporter groups can be highly successful. A web page featuring an attractive and accessible menu of events options is a great offering to individuals looking for a low (or no) cost way of having fun, making friends and providing goodwill in a harsh environment. Well-integrated online and offline events activities can be cost effective in terms of administration, and can also introduce and integrate donors to other ways of giving.  In this way, events fundraising could provide an impressive return on investment for smaller organisations and become an integral element of the fundraising toolkit in future months.

Cathy Pharoah is director of Third Sector Prospect