The Name of the Game: Cost-Benefit Analysis
There is nothing better than that moment at the end of an event when you take the cash box back to a small corner and count the money. Now, in a time of digital fundraising that cashbox has become rather proverbial… now we watch the figures rise on our screens, but that feeling is the same.
Our fundraising staff has goals to meet, and centering that around specific in-person, digital or virtual experiences feels right. Those experiences build community, create opportunities to advocate, and raise awareness about your mission. And they raise money??? How can that not be worth the time, resources, and energy we invest in them?
But are they?
And the answer is sometimes.
Look, I hate when a client holds a gala, but I don’t hate the Met Gala. In other words… all galas aren’t created equal. Sometimes they make sense… they just don’t always make sense, and what works for one mission-driven organization does not always work for another.
So yes, the obvious metric of counting the money in that cashbox counts, but it only counts as one metric in determining your fundraising tactics. And in this article, we are going to talk about the rest of the metrics… oh and this is not just about galas, though I can easily talk about them for days. The process of building a cost-benefit analysis on every piece of your fundraising strategy needs to be done, most especially in times of crisis, as you don’t have time, money or energy to waste on anything that does not maximize profitability.
What gets included in that cost column in your analysis?
Direct Expenses: Supplies, rentals, marketing, and other out-of-pocket costs.
Indirect Costs: Staff time, administrative support, post-event follow-up, and donor stewardship.
Opportunity Costs: What other impactful activities could staff have accomplished with their time?
So, let’s talk about the elephant in the room. Galas and conferences are a hallmark of nonprofit culture. They offer fun, networking opportunities, and a chance to celebrate impact. Boards love them. But how much does a gala truly cost? When you factor in hundreds of hours of staff planning, coordination, and follow-up, the “profit” may be far lower than anticipated. It takes months to plan and asks are limited to sponsorships. Could you raise that same amount or more by building strong relationships with a handful of donors or writing a grant or two? If the same staff investment in a different campaign could yield more, it’s time to reconsider the event’s place in your annual calendar.
But wait! It is the hallmark event that brings in new supporters and connections, and helps us build our network of supporters.
OK! I’m sold. The benefits are outweighing the costs. Now it’s time to evaluate the costs and figure out how to bring them down.
Hold that gala or conference, but make sure you have designated time and names the people who will be responsible for following up with those new supporters and donors and getting them into your moves management system.
Are you spending your time on event planning instead of fundraising? Because maybe the event is important to your strategy, but the way you are executing it costs you too much. Perhaps it would make more sense to hire an event planner?
Could you make those same connections with a smaller more intimate event that takes less resource to execute?
In times of crisis, it is time to think as creatively about what do to as how you do it.
And this isn’t limited to events.
I have seen organizations spend so many hours writing grants that they aren’t meeting and building relationships with major donors.
I have seen organizations spending so much time on their end of year campaign that they weren’t creating a culture of year-round giving with their individual donors.
I have seen organizations so focused on one big donor that they never ask for introductions from that donor to their network.
I have seen organizations spend all their resources on raising sponsorships that they forget to create partnerships.
Conducting a thoughtful cost-benefit analysis for each fundraising activity empowers organizations to make data-driven decisions. By calculating the true costs and weighing them against the benefits—not only in dollars raised but also in new donor engagement, increased visibility, or mission advancement—you can create a more effective development strategy.
Track every cost, including staff and volunteer time.
Assess intangible benefits such as community awareness or partnerships.
Compare the returns across activities and prioritize those with the greatest impact.
Review and revise your fundraising portfolio annually.
Monitor sector trends and be open to learning from others’ successes and missteps.
The path to resilience is paved with intentional, data-informed choices. Let go of the work that drains resources without proportional benefit. Welcome bold ideas. The future belongs to organizations that have the courage to evolve.
