Episode 192: Pet the Cat Backwards - Those Feline Like Special Events
https://youtu.be/a8OIs6YTiB4
Welcome to another edition of Around with Randall, your weekly podcast for making your nonprofit more effective for your community. And here is your host, the CEO and founder of Hallett Philanthropy, Randall Hallett. Thank you so much for taking a few minutes of your day to join me, Randall, on this edition of Around with Randall. If you read the title of the podcast, I'm really going to try to pet the cat backwards. And we all know what happens when we can't pet that cat backwards. The cat don't like it. Cats jump, cats run off, cats growl, scratch; any animal you pet backwards would seem to be the one in my mind when I think about this. Jump, they don't like it. And that's my job today. And today I'm not petting the cat. I'm petting special events.
So it appears as I went back and looked, about every 100 podcasts, I tend to have a commentary about special events. I did so in episode number two. I think it was number one, one. And I'm here now at whatever we are in totality with this, with the specials on the great philanthropist and then our 20-minute classroom conversation each week. We do hear, like today, I get back into some diet tribe about special events and to keep the tradition moving forward. I'm going to do it again.
I had a recent situation where I was working with a foundation, nonprofit, and we were talking about their pipeline development. And they said, well, we have to put this on hold. And I said, well, why? Is someone sick? This is not a one-person office, so there's a number of people involved. And somebody sick is there something I'm unaware of? They said, well, we've got this huge special event. I went, please tell me that you're able or at least a number of you are able to take yourself out of the process. Gift officers, really. Let somebody else worry about it. So you can keep driving relationships, maybe use it as a cultivation event in and of itself. But for the most part, staying away from its details and its involvement to execute and operate it. And I was told under no circumstances, terms, no confusion, that that's just not how they operate; that we need to shut down what we were looking at doing and what we were doing for several months. So they get ready for a special event.
And I had a call with the CPO and I said, look, do you want to hear what you want to hear? You want to hear what's actually your paying me, which is, I think, advice, hopefully good advice. She says, I kind of want to know what you think. And I said, you got to stop this. You're leaving money on the table every time you take all your staff and you put them in the room, multiple times it seems like a day to plan a special event that's going to draw a few hundred people and generate four, three, four, five hundred thousand dollars. That's in revenue. I can't really figure out what all their expenses are because they don't want to count for their time in the particular equation. So the ROI is a little nebulous. We went back and forth and it's important to the community, our CEO likes it. And what this did was cause me to reflect about petting the cat backwards and saying, what are we going to do to stop having these conversations?
So let me start from the top. I am not against getting rid of all special events. There are ways of doing them that are effective. There are values in special events that can be very positive for the organization. I just don't believe that actual fundraising is a part of that. At least kind of fundraising we should want or try to do. What you get is a lot of outreach, maybe some press, some marketing. You maybe add, maybe it's some cultivation event, although I've never seen a lot of great cultivation come from a special event, even when you're sitting with somebody. It's a touch. It might be a little bit of a move, but it's not a great move because if you're working with high-level people you want to have individual conversations. Hard to do with four, five, six hundred other people in the room.
So what is it that we can do about all of this? Well, the first thing is that we have to realize that the political structure of the organization is such that we can't make these decisions in isolation. And I say that because I failed that particular lesson in life professionally. I'll talk about here in a few minutes. These special events take on a life of their own. In part because we have people outside of those of us who maybe have a little bit more knowledge and expertise in philanthropy who think this is the only way to raise money, which we know is not true. We have a section of that or a cross-section of that group of people who we think of if we go back to Princeton file—they are the socialites; they are the ones whose philanthropy is embodied by this activity. And finally, we have dollars coming in and check marks being made by to-do lists on the board and volunteers. Everybody feels like they're doing something and what I always say is I'm not arguing that you're not doing good things—and they are. Are they just the best return on investment?
So the first part of this conversation is talking about the political pieces of this. And then the last is the tactical and it's kind of all tactical on what you actually can do about it. So this political nature is really in two forms. Number one is your board and number two of the executives. Maybe in your case is number one, the executive to the board. It doesn't make much of a difference. They don't have our experience. They don't have our knowledge. They don't have our data. And so the first place to start is explaining the data and really it's AHP of the association for health care for philanthropy that I see the best numbers to look at this because they actually calculate and have in the past the average gift. They actually calculate where people who are the top performers, the foundations that are raising the most amount of money. What activity they're doing. And so we can actually take this apart even if you're not in health care to say this would be pretty much perform in education services other places. And this is what the numbers say. Just pure numbers that when you look at a lot of nonprofits and you put them all their data in and then you take the top 5% of those nonprofits who are doing it the best, what you'll find is about one or maybe one and a half standard deviations—sorry, Matthew just came out—a really big difference in the type of activity that those nonprofits who are generating the most amount of money have chosen to engage in. And it's based in individual relationships. It's based in building deep, meaningful relationships with individuals and couples. It comes in the forms of major gifts, plan gifts, and I throw corporations and foundations in there because individuals make those decisions as well. They are double-digit percentages in terms of where their dollars come from. They come from those places rather than what are traditionally thought of as, well, this is fundraising. Aren’t you giving, mailing out stuff digitally? However, you want to look at it, and special events. It's significantly more important, more money. The best places are doing individual relationship-based activities. Not repeat, not lots of special events.
Inside of that, and again give the Association for Healthcare Plan to Peak credit. If we think about the average special event generating, I don't know, maybe $2,000, maybe a little less, but the average plan gift, let's go all the way to the top being almost a half a million dollars. And the average major gift maybe being $125 to $130,000. The average corporate or foundation gift being $30,000? Well, I don't need a math degree to figure out that it takes a heck of a lot of special event dollars to make up two or three planned gift dollars. So what I find is that most non-profit leaders really don't have these level of conversations. Show these statistics to their executive teams and their boards to say there's a better way of doing this.
So number one is data. Number two is that there are other reasons that aren't as data-driven but are really important. The first of those others, I'll give you five or six, is that it's incredibly time-consuming to put on a special event. I always tell the same story: my special events person at the Medical Center, I told her, I said, I don't, if you ask me what color the table napkins should be or what we're having for dinner or what the limitations look like, you're fired on the spot. I don't care. I'm not sure I want to have these events, but they seem to consume everybody. I used to tell the major gift officers that I had the privilege of supporting and as their leader, that if I found them in a special events planning meeting, they were fired on the spot as well. Get out. I got people who will do that. I'm not sure I want to do it, but I got people who will do that. Your jobs go build relationships. So they're incredibly resource-intensive, people-time. They just don't go quickly.
Number two is I believe they have, if you do it and look at the data correctly, do the analysis correctly. I think there's a little bit of what I would consider an unpredictable ROI. One year you have X number of dollars in revenue. The next year you have X time is only 80% of that, but your expenses went up. You're dependent on others in uncontrollable situations in the event. Let's say it's a valid auction, something about nature golf tournament. If you haven't done all of the prep work beforehand, i.e., all the sponsorships, if everything is locked down, there is a level of variability and that comes from the unpredictable nature of the people bidding on stuff, buying stuff, the economy, inflation, you literally don't have as much control as you would if you're building individual relationships.
So the second thing to talk about is this idea of unpredictable ROI. The third is donor fatigue. When I left the medical center, it has been 13, 12 years ago, and it was a great job. I was blessed to have it. I miss certain aspects of it. I can tell you the one thing overall that I miss not one bit. And if my wife was sitting here beside me, she'd say, you bet, is going to all of the events we were really required to go to as an incredibly large nonprofit where I had to show my face. Man, when I left, all the invitations dried up, and I mean, there was hooping and hollering in the Halleck household. You talk about fatigue. I don't want to go to all of these events. I'm tired of the food, which most of which my wife can't eat in the first place. Secondly, I'm not sure it's all that great. I can see my friends, the people I really want to see outside of a special event having a beer, which we do in the neighborhood all the time out in the different fire pits at night, just hanging out with people I like. My kids' events, my family never went to these things. So I see them at their houses. It's not that these people aren't good people. They are, but fatigue occurs. There's also this idea of distraction when it comes to what their interests are. It's really hard to give someone a million dollars at a special event if their intent is to give to something very specific that has specific income or outputs and impacts. If they have to do it through raising a paddle where the money may not go to the exact cause that they're interested in, says everybody's got to have the same cause if you want to do that way. You know, everyone's raising a paddle for something specific. Well, that's great for that specific thing, but what happens if one of those people who gave $10,000, if you'd have just had a few conversations with them, they find out that they'd rather give to something else in your organization and they'll do half a million dollars. Happens all the time.
So this idea of distraction into what actually people's impact should be and wants to be is real. Number four, mission drift, particularly when you have volunteers. I think sometimes the event all of a sudden takes on more importance than the mission. I've seen this happen in a number of cases. It doesn't mean the mission— they go 180 degrees. They're not doing the antithesis of your mission. But what they are doing is 10 degrees all off of what you're trying to accomplish. Particularly if you have a strategic planning initiative, strategic planning effort where you're trying to do certain things where philanthropy is a big part of that. So realizing that these mission drifts can occur in special events. We don't get to talk about what we really need to talk about. We have to talk about what is generally the most acceptable to everybody at the same time, the most general. And that's not where people's gifts are going at the highest levels.
Number five is these ideas around what I would consider post-COVID. It's kind of an A and a B, and I'd say this is the last one, and it's probably the most minor to be candid. But I think events picked up right after COVID very deeply because people wanted to just go see people. We had a year, year and a half to year depending on where you live, the circumstances, your family, your community, shutdown. I think people wanted to go out and see people, which is great. But we're back to some of the same norms and people don't want to go. And so the question becomes, what's that outside or the back of the lag of not having events? Are we past that lag? And I think we are where we're back to where we were maybe in the last 10 years before the pandemic. Seeing events not draw as much.
So you have data. And by the way, tactical, as you mentioned this, you need to sit down with your executives and talk about these things. You need to sit down with your board. You need to do so first informally having conversations so it's not so abrupt. So you don't look like, well, I'm just trying to kill things. It's no, I'm trying to be strategic with our limited resources. Starting with your boss, the CEO of that's your report to hopefully or anyone else and your board chair privately, quietly, like, go, this is going to be a different way of looking at this. And we deemphasize it. And we reduce it. Can we allocate resources very specific and get whatever we can out of it? I mean people, but keep other people out of it so that they can go raise money by building relationships.
This is going to pet the cat backwards because people who maybe don't think about what we do, don't have the data, haven't thought about those five things I mentioned from kind of this, you know, idea of how much resources it takes, the intensity of finding people and dollars to put these events on to their ROI, to their fatigue, to how the event almost becomes more important than the mission. They don't think about these things, which brings us to our second and most important tactical piece maybe for the day. After you have these formal conversations, part of your responsibility if you want to make adjustments is to come with a solution, not just a problem. Nothing drove me crazier as a leader when somebody would say, I have a problem, and I'd be waiting, well, if I have to solve a problem, why do I need you? Bring me options, bring me positives and negatives. Let's talk about it. But I can't figure everything out. And by the way, I think my wife and others that know me fairly well would tell you, they don't want me figuring it all out. People have good thoughts and suggestions. We should move with them to get them to be involved, which means you got to show up with your CEO, with your board chair. If you're the head of individual gifts, major gifts plan, giving whatever, talking with the CDO, hey, let's talk about this. We're spending a lot of time in special events. So let me give you a couple of options.
The first option is to partner. So it's politically impossible to get rid of the event, then you have one, maybe two. And it's just, it's not feasible. Then the first thing I would do is figure out how to partner with someone. If this is a marketing level event as well as a philanthropy event, then I would ask where's marketing in this process? Why aren't they helping put this on? If they are wanting the operation of the organization, the nonprofit to put this event on because they see a marketing benefit, I actually don't disagree with that possibility. You've done it correctly. Where are they in running this thing? Let's get some of my people out of it and get some of your people involved with it. All of a sudden it's like, well, we're too busy. We aren't. We're supposed to be raising money here. So the first thing is partner and you do that internally.
The second part of partnering, ship partnering and the partnership that might be possible is with external players and that's your third party. Give the events to the volunteers and let them run it. When I arrived at the medical center in 2008 or whatever it was, we had 10 or nine events and in the first year I gave like six or seven of them back to the families. Three on three basketball tournament, a poker run, a golf tournament, a couple of golf tournaments, not I think about it. We had all these events and they were all for the right reasons, but my team was being dragged in these events said, look, we'll come pick up the check. I'll even pay for the postage and the printing, but we're not going to run this thing and they were saying, well, we may not make as much money and my answer was, that's okay. It's okay. You're doing this because you've had an experience that has caused you to want to do this. I want to concentrate on that more than I do how much money we raise because that's really what's really important. Giving, and by the way, some of those activities dried up pretty quickly like, well, we don't want to do all this work that I understand. So the question becomes, how do you give them back and how do we support you and how do we maybe do it over a year or two so that we're pulling our team out to go do the activities that are data-driven average gift being higher in plan gift, major gift corporations, individual relationship building activities rather than special events.
What are the positions or people where the dollars are? You can partner internally, marketing externally, give it back. The other option is to cut them. I know there's a consequence with this, a political possibility of some negativity. It's short term. We all need to be more aware that most people forget almost everything right after it happens. We live in such a turnover news, turnover information world, instant gratification around the corner removes the bad feeling most of the time that happened 15 seconds ago. That's why news cycles are so much different than they were 20 years ago. Twitter, Instagram, cable news, whatever. Heck, kill the event. If you can't find partners, if it doesn't make sense, you're given a little authority. It's okay to say this is not the best use of our resources. We are spending an immense amount of time and we have these other issues around donor fatigue and around unpredictable ROI and resource intensity that we're just taking everybody away. The events actually now more important than our mission. That's what we want. We can't even use the event to drive our strategic initiatives, which our board and our C-suite or leadership team or admin is really driving.
Take the hit, kill the event. Pat the cat backwards. You know what happens when you physically pet the cat backwards? It's interesting. I mean this sincerely and I'm not a cat person. They get angry. They walk away. What do they always do? They come back for more petting. Questions: Are you smart enough to pet them the right way this time? It's okay to sometimes be unpopular. I've lived my life with that knowledge. I'm sometimes not popular. Am I respected? Are you respected? Are you doing everything you can using data and rationale to work internally with your board, with your C-suite, with other key stakeholders to say? We got to do this differently.
My last comment, if you have an event that's drawing $234 or $5 million, I'm not talking to you. I'm talking to all the events that are $25,000, $250,000 that are just sucking the life out of us. At a time when philanthropy is more needed, probably than any time in our recent history to make a difference in our nonprofits. I want your best resources, time, talent, commitment, wisdom of your stats, the connections through the board and the executives to be utilized in the best possible way. That's not through a special event. The cat will come back, I promise, and you can pet it the right way. The cat will be more valuable when you pet it the right way based on individual relationships.
Don't forget, check out the blogs at HallettPhilanthropy.com, two or three weeks, how things I see feel, notice, experience, just something to think about, you know, times a week. And if you'd like to reach out to me, it's podcast@hallettphilanthropy.com. I appreciate you. I appreciate your willingness to listen. I've been given a little information. There are probably more people listening than I actually realize. So I'm humbled to be very candid. If you think this is helpful, either this subject or another one, share it with someone else. I look at this. This is not marketing for Hallett Philanthropy. I don't talk about this about a classroom, one subject, what's the problem? How do we solve it? Because you need this. What we're doing right now is really important. I think it's going to get more important in the next several years based on economic, political factors where nonprofits are going to become more important to the value of people's lives and certainly the communities in which we live. Don't forget my favorite saying: Some people make things happen. Some people watch things happen, and there are those who wonder what happened. Be somebody who makes something happen. Go find others that will do the same. Those philanthropists, people with resources who want to make the world a better place. I'm talent or treasure. It doesn't make any difference. Get them involved, partner with them, and move whatever your mission is to make your community a better place. Move it forward so that it is a place you want and the community wants because at the end of the day, that's where we live. And it's important for our current and our future. We have the best possible nonprofits. Fill that gap between the capitalistic enterprise system and government. That's where we live with the people who are wondering what happened. I look forward to seeing you the next time right back here on the next edition of A Round With Randall.
Don't forget, make it a great day.