Many people love to attend fundraising events because events are so much fun. Many of these same people are also members and officers of nonprofit organizations.

It’s no surprise when those event lovers say they want their organization to host an event, too. And why not? Everyone knows fundraising events are fun and “all the other charitable organizations” host fundraising events . So members, officers, and staff (if there are any) get together and agree to host an fundraising event. That’s often the extent of evaluation.

The desire to have fun and do what others do becomes the basis for forging ahead. These emotional drivers substitute for strategic and business planning, objective evaluation, and number crunching. “Let’s have a fundraising event,” is the one and only agenda item for the meeting that gets the ball rolling.

“We’re going to have a fundraising event.” Now what?

Although it may take some time, event planners eventually will face reality: a major fundraising event is a lot of work involving many people who must have considerable time and talent to invest in the event. There can be serious logistic challenges and financial liabilities even when experienced event planners are involved. If event planners are ill prepared for the job because of a lack of skills, knowledge, and experience, the risk of failure can increase considerably.

But the road to potential failure has still more obstacles.

The organization may be better suited to use alternative ways to raise funds that may have less financial risk, are easier to plan, and do not require as much staff and volunteer time as a fundraising event.

Serious evaluation should be made before committing an organization to its first major fundraising event. Evaluate as objectively as possible the capacity of the host organization to guarantee a sufficient number of attendees having sufficient disposable income to reasonably ensure fundraising success if meeting planners do a reasonably competent job of hosting the event. Concentrate on identifying who can be relied on to attend the event. Event planners may write down names of people who will come to the event (and who will spend money). If the result is a long list, then maybe an event is a truly viable option. If the list is short, then the expected attendees had better be wealthy and generous to the organization if the event is intended to deliver high net revenue.

How much money will attendees be expected to spend? I recommend using a business plan model to do a hypothetical financial evaluation of costs and revenues. Consider this a “risk-evaluation” exercise, because events all carry some level of risk. Is it reasonable to expect the event will be profitable?

If the objective assessment of attendance shows the only people that can reasonably be expected to attend are the host organization’s officers, event planners, and a smattering of the organization’s members, all of whom are already making regular donations to the organization, then there are probably easier and less costly alternatives to raise the same amount of or more money than by holding an event.  If an event brings together only the same people who would donate the same amount of money to an organization with or without an event, then the consequence of the event is to greatly increase the cost of raising the same amount of money from the same people, leaving the organization with much less net revenue and a huge outlay of staff and volunteer time.

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It is amazing how many otherwise very smart people fail to pass a simple test of objectively evaluating the fundraising potential of an event and hold poorly planned, underperforming, costly events. The event may be fun, but is the objective fun or fundraising?

Click here to take a simple test to determine if a major fundraising event is a reasonable path to significant net revenue for your organization.

Excerpted and adapted from the book, Money for the Cause: A Complete Guide to Event Fundraising by Rudolph Rosen. Texas A&M University Press.

(c) Rudolph A. Rosen, 2011