Here’s a startling, if not alarming, fact courtesy of a study done some years ago by Charity Navigator: The average charity spends $1.33 to raise $1 in special event contributions. Uh-oh!

Now to utter something really sacrilegious: A special or major event is not for every nonprofit organization. Uh-oh!

That’s right. Not every organization has the ability to pull off a gala or major event AND make it achieve a healthy profit.

There’s a saying: “If you don’t know where you are going, then any road will take you there.” Unfortunately, too many nonprofit organizations feel that, like the “Fiddler on the Roof” classic, hosting a dinner is “tradition.” So, we have to have that annual dinner, right? Wrong! Times have changed.

Dinners and other such major special events remain central to the fundraising efforts of many institutions, but the rules have changed and getting the right compass or GPS will help guide you on that roadmap to success.

Fundraising events must be treated like a business. Even if your intention is to break even so that you can recruit lots of new friends—or have a friend-raiser—you still need that blend of common sense called “seichel” and an astute business acumen so that the major event doesn’t sink the proverbial ship.

No two organizations are alike, so just because your competitor is losing his pants, doesn’t mean you have to walk around in shorts too. Major events can be labor intensive and may not show a good return on the investment. I have always held the belief that securing a $100,000 gift from a major gift donor in one or two meetings is “generally” more cost effective than sinking in all your efforts for four to five months and realizing a miniscule gain for your time and labor. Friend raising is good, but doesn’t have to be all consuming to the detriment of the nonprofit.

There are specific steps that all nonprofits can and should take to avoid draining their already limited resources if they are determined to host a major event. I am a firm believer in the six Ps—“Proper Prior Planning Prevents Poor Performance.” The planning starts with a budget. Remember math in grade school? Some folks seem to forget that before you secure the hall, hire the caterer or send out one invitation, you must project what your expected revenue and expenses will be. What a novel idea!

If you feel that the net surplus is sufficiently large to catapult your organization into a special event, there are other variables to consider. These include securing the right guest of honor or honorees. I know there are many folks who don’t want to hear this, so I urge them to put their ear plugs in now or just leave the room. Ready? Here goes. The guest of honor and/or honorees generally dictate the financial success of your affair. So, as the sagely knight said in the Indiana Jones movie: “Choose wisely.”

Other methods to generate income at your event include creating sponsorship levels that recognize donors for different gift elevations; inserting a special event within the larger event such as a VIP reception so that you can recognize larger gift donors; providing a mobile digital platform for gift giving, especially useful for guests who have not paid the couvert but are coming at the invitation of friends who paid the price of admission; and setting up a Matching Gift challenge during the affair (this has to be carefully arranged in advance with one or more of your philanthropically generous friends). There are other strategies, but space is limited.

It goes without saying, but since this is an advice column, superfluous overhead should be eliminated and the best pricing for your amenities should be a priority. An effective publicity campaign should include advertising and social media. Finally, unpaid pledges cannot be forgotten, so a well-organized collection plan also should be implemented.

If you follow a well-coordinated fundraising plan for your special event that incorporates these types of approaches, then the likelihood for success is high. And not least of all, put the “fun” back into fundraising. Is your nonprofit prepared to take control of your special event and make money?

By Norman B. Gildin, President, Strategic Fundraising Group

Norman B. Gildin has fundraised for nonprofits for more than three decades and has raised upwards of $92 million in the process. He is the president of Strategic Fundraising Group, whose singular mission is to assist nonprofits raise critical funds for their organization. He can be reached at [email protected].