Tuesday, July 1, 2014

Acceptance of Failure - The Reality of Fundraising in 2014 - Part 2 of 4

Many Charities today simply accept failure.  After their event, they tell themselves that it was successful no matter what the outcome.  A common practice is concentrating on the "Gross" or how much money the event brought in instead of the "Net" or the profit. 

Also, a very common practice is believing old myths such as they must have fully donated items.  This is, without a doubt, one of the worst myths out there today.  There are many reasons why this is a myth which we will answer in future blogs. 

But for right now - here is Part 2 of 4 - Acceptance of Failure:

#1 - Gross vs. Net – When asked how successful their event was, most charities will report their “Gross” from their event.  However, success lies in the “Net” or “Profit” made from the event.  Even then, the truth lies in the “Net Net.”  Commonly, when speaking with clients, we will ask this question and receive the same response.  When calculating the true “Net Net”, the national norm for successful charity fundraising events can be found with this simple equation – attendance times $100.00 – Net.  What this means is – 300 people attending x $100.00 = $30,000.00.  That is just the start.  For this equation, you must take out all the payables, all the “Pre-Event” sponsorship and simply go off what the actual event profited to find the answer.  If your event did not reach the “Norm”, you should begin to evaluate its success and begin to make the appropriate changes.

#2 – Donated vs. No Risk Items – Today, there are still charities who believe that they must have
fully donated items in their events and refuse to work with No Risk Auction Items because there is a cost associated.  However, we first must understand the “Truth” behind the Donated item. 
a.      Local Businesses donate items that they can afford to donate, commonly items which are not selling in their stores.
 
b.      These Businesses commonly donate the same item to their local charities for marketing reasons.
 
c.      Donated items do not normally have a theme (ie. Sports, Music, Travel)

d.      With local people attending the local event, these people are familiar with the business and have most likely been in their establishment.

e.      Donated items are not normally items which have massive appeal.

f.       At Charity events, everyone is looking for a “Deal” on the items which they bid on.

g.      Donated items are only brining 1/8 to 1/4th of Retail across North America in Charity Events (Study performed by BWU over a 3 year period – this is the national average)

h.      With such a low performance, when the donor realizes that their product sold for 1/4th of their retail, it lowers the evaluation of their products and their business. 

i.       Charities commonly utilize the same donation year after year, going to the donor each year to “Re-Donate” that item or Vacation.  Each year, the appeal for the donation goes down and down.

j.       Businesses commonly donate the same item to their local charities, this item is seen by Charity guests each time they attend different events – these people are commonly referred to as “Socialites.” 

NOTE:  Charities MUST understand that their guests also attend other charity events in their area, they just don’t support them.

With everything detailed above, here are the myths surrounding No Risk Items or items which have a cost:
a.      No Risk items take away money from our overall success – entirely false.  In truth, they pull money out of the crowd which they would not normally spend.

b.      Guests at our event do not have that kind of money to spend – entirely false.  Charities will never know what type of spending their crowd if they do not have items which have mass appeal and demand higher spending.

c.      Our guests will only spend so much, we need to have items which are only worth a certain price range – entirely false.  Charity guests will NOT spend anywhere near retail, nor will they spend over and above the retail cost of anything presented.

d.      Our guests make contributions to our charity by bidding on items – entirely false.  Charity guests attend charity events to support, but spend with their wallets.  After making large expenditures, they will then tell themselves “Well, it’s for charity.”  If the myth were true, charities would not need to host events, they would get massive amounts of donations via the mail.
There are many myths that Charities tend to follow down a dead end road.  If you would like to get on the road to success, contact the Charity Fundraising Experts at BW Unlimited Charity Fundraising today at www.BWUnlimited.com or call us at 410-658-8808, we would love to help guide you.

No comments:

Post a Comment