An All Online Gala Forgets About Everything Except The Donor

September 1, 2008       Mark Hrywna      

The Neighborhood House Association’s (NHA) annual gala raised about $170,000 last year but there were no tuxedos, evening gowns or fancy hors d’oeuvres. There also was no band, much less a banquet hall, but donors still purchased tickets and tables and sponsors offered their support of the "event."

For the second year in a row, the San Diego-based nonprofit sponsored a "virtual" gala, exchanging the rubbery chicken dinner and ballroom for an online version that doesn’t come with all the expenses of a high-falutin’ affair. The gala, which went live June 2, featured items for auction from July 15 to August 15 including a ticket package to a San Diego Chargers football game and a luxury trip to San Francisco and Napa Valley. The NHA auction last year generated $170,000 and has a goal to raise a half-million this year. By the final week of the auction, NHA received $103,000 worth of scholarships and donations.

"We were looking at traditional ways of fundraising, and traditional nonprofits entertain a full-fledged event at a hotel, convention center, or ballroom," said NHA President and CEO Rudolph Johnson. "When you look at the expenses, for a band, food, dŽcor and other items, at the end of the night what you end up netting is less than what you’re netting in the way of a major fundraiser."

The expenses of a traditional gala event make for a smaller return on investment, not only in terms of dollars but also time and energy. "Right off the bat, if you mirror your donor effort, in terms of who’s willing to give, and overhead and expenses are greater, you’re shorting yourself the one time you’re trying to really raise funds," Johnson said.

The 95-year-old nonprofit has an annual budget of about $95 million – the bulk of it for HeadStart – and about 1,200 employees. Government funding is structured such that NHA must match funds for its HeadStart programs, so it aims to raise about $150,000 to $200,000 in unrestricted funds for programs across the board.

With no expenses associated with hosting a tangible gala, NHA has netted about $150,000 from the virtual gala, compared to the $50,000 to $60,000 the real gala has brought in previous years, Johnson said. Donors seem to like not having another event to dress up for, he said, though NHA does sponsor a smaller-scale reception to thank donors and sponsors as the virtual galas wind down.

The reception is a way to get acknowledged, Johnson said, and sponsors still get exposure during the virtual gala by advertisements on the gala’s Web site where title sponsors are displayed prominently in addition to thank you ads at the end of the gala. While the galas typically had 500 to 1,000 attendees, he said the thank you reception is a smaller setting, with about 150 to 200 people.

There are about 75 to 100 table and seat sponsors for the virtual gala, and different levels of major sponsorship ($5,000, $10,00 and $25,000) with 10 to 15 sponsors for each level. There are usually about four title sponsors ($25,000) every year, Johnson said.

"At the end of the day, we net about $150,000 on average, so we used to gross between $165,000 and $170,000 from a traditional gala," Johnson said. It’s cutting that expense side of the ledger that helps boost the event’s bottom line. In all, NHA spends between $15,000 and $20,000 on the virtual gala, between advertising, virtual invitations and the Web infrastructure to handle everything online.

Planning the virtual gala takes about 70 to 90 days, Johnson said, and the gala itself usually lasts some six weeks. In addition to auction items, the Web page offers information on the types of programs NHA hopes to fund through the proceeds.

NHA hasn’t completely abandoned the traditional gala, however. The organization plans to host an event, perhaps every third year starting next year, to bring donors and sponsors together in person. "The novelty won’t wear off if every third year you do a traditional gala,"

ohnson said, adding that it would give NHA more exposure in terms of identifying new friends who would be more inclined to give during the virtual gala in the next two-year cycles.

For nonprofits thinking about moving their gala from the banquet hall to the Web, Johnson suggested first making sure the proper infrastructure is in place to build a Web site and create a site that will be user-friendly and allow you to maneuver through any pitfalls.

Johnson stressed the importance of making it user-friendly, so donors will be able to get online and contribute quickly and easily, and avoid getting frustrated and logging off before making a contribution. "It’s been kind of trial and error but start with your IT side," he said. NPT