Let's Raise Some Money
Insights from Karen Climer about fundraising and nonprofit organizations

Third Party Events Can Raise Buckets Of Money Or Drain Resources From The Beneficiary. Here Is The First Step In Making Sure They Help Your Organization.

January 22nd, 2015 by Karen Climer

I am a member of a fundraising mastermind group.  We meet once a week for breakfast and discuss fundraising trends, what’s working at our organizations and what’s not working, bounce ideas off of one another, and generally have fun discussing philanthropy.

Last week, we ended up talking about third party events.  I’m referring to a fundraising event conducted by people with minimal support from the beneficiary organization.  This could be a food drive done by a Girl Scout Troop that benefits the local food bank.  It could be a bake sale that benefits the homeless shelter.  It could be a ticketed-event like a party that benefits a national nonprofit.  Or it could be a viral campaign involving pouring water over your head.  (The Ice Bucket Challenge began as a third party fundraiser!)  The key factor, in my mind, is that the event requires minimal support from the beneficiary organization.

Quite often these events begin with a person who cares about your cause.  The person will call and say he wants to ride his bike around the state in an effort to raise awareness for your cause.  Sounds good, so far.  But he wants you to solicit sponsors for him.  Oh, and some of the venues require liability insurance, which he doesn’t have.  Can your organization provide that?  Oh, and he’s going to need someone to follow him in a car in case he gets hurt on his bike.  Can the organization donate a staff member to do that for a week?  It will be good for the organization.  Think of all of the awareness it will bring to the cause.  This is not a third-party fundraiser.  This event is a leech that is sucking the resources of the organization.

In order to prevent well-meaning individuals from draining the resource of the organization, I suggest you create guidelines about third-party events that include what your organization can and cannot provide.

Can you provide brochures or a video?  Can you send a staff member to the event?  Can you cover the expenses of the event?  Do you want to be the sole beneficiary or can the proceeds be split between several organizations?  There is no right or wrong answer.  It’s what works for your organization.

I know of one nonprofit who makes so much money from these third-party fundraisers that they have a staff member devoted to them.  This staff member provides support to the people doing the event and flies all around the country attending third-party events.  That seems crazy to me, but for this particular organization, third party fundraisers are a significant portion of their budget, so it’s worthwhile.

If you have a strong brand, do you want people to list you as the main beneficiary but then split the money with several groups?  For example, “This event benefits Strong Brand Nonprofit and other similar organizations.”  The reality is that Strong Brand gets about 25% of the money.  You could argue that 25% is better than nothing, but it’s also a little deceptive.  I recommend that your third-party guidelines include that you are the only beneficiary.

Do you want to solicit your donors and sponsors to support the third party event?  If so, what’s the extent of it?  Will you do a few small social media mentions?  Will you send a postcard to your entire mailing list?  Will you give the third party the mailing list and tell them to do the mailing?  Will you ask your #1 donor to sponsor the third party event?  These are all things I have been asked to do by the third-party organizers.  It’s up to you what you decide to do.

If you search the internet for “Third party fundraising events”, you will find plenty of examples of guidelines for small and large organizations.  Check out a few to get some ideas.  What is most important is that you have some guidelines and you spell out very clearly what you can provide and what you cannot provide.  Third-party fundraisers are great when they involve minimal participation by the nonprofit, but it is easy to get sucked into a third-party event where you are spending significant resources on an event that is supposed to be run independent of you.

Posted in Events

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