by Diane Bauhof, CFRE, Senior Consultant
Fall is gala season, which means my clients and nonprofits everywhere are talking about how to price a ticket for a signature fundraising event. These discussions might include statements like:
“Our hard costs will be $160 per person. We’ve set our ticket price at $150 because we want it to be financially accessible to all donors as well as our program participants.”
“We don’t want to price it too high because we want our staff to be able to afford a ticket. They feel like they are being left out.”
“We want everyone to be able to celebrate our anniversary, and we also need this to be a huge fundraiser for us!!”
You might notice some red flags here, but you also might really understand where these statements are coming from. How do you set the price for an event that you need to generate significant revenue while also staying true to your values? Here are some points to consider:
Who This Event Is For
The examples above highlight important questions that need to be answered when planning an event: who is the event for and what is its purpose?
Nonprofit employees and leaders usually have high empathy, so they often worry about how staff, volunteers, and sometimes program participants will feel about not being at the event. While that is admirable, part of our job as a leader is to help our colleagues understand the purpose of a project and how their role best supports it.
When planning an event and deciding on pricing, try to think like a business rather than a nonprofit. If a company is pricing an item to sell, it looks at the full cost of production and determines what to charge on top of that to earn a profit. You should approach ticket pricing in the same way. Your constituents should expect nothing less from you.
As for your staff feeling left out, let’s review: your fundraising event is not a staff appreciation event. It’s not a volunteer recognition event. And it’s not a client or family celebration event. It’s a fundraising event with a goal of engaging new people and inspiring renewed interest in your organization that will also raise important funds to serve your mission. The event will likely need staff and volunteer support—not just attendance—to pull it off.
Ticket Pricing 101
- If you’re planning a fundraising event, your ticket price MUST be more than the fair market value of your event (catering, bars, service fees) as attendees expect that part of their ticket price is a donation. Ideally, the ticket price is 40% to 50% tax deductible. That means that if your hard costs are $160 per attendee, you should be charging at least $275 for one ticket.
- You want your ticket price to be competitive, so research what other nonprofits are charging in your community. If the large hospital foundation is charging $500 for its gala tickets, your social-service nonprofit will likely be less than that. Look at what similar organizations to you are charging. Then run it past a few Board members (ideally those that you know attend other fundraising events) to see how it sits with them.
Budgeting for Your Event
What pricing individual tickets matters, most of your revenue will come from sponsorships, table sales, and the fund-a-need. Here’s an example of the revenue side of a gala budget, assuming 250-300 attendees, a ticket price of $150, and a gross revenue goal of $150,000. Note: your specific budget will vary depending on the depth of your donor base, your market, and whether this is a new or established event.
Sponsors: $90,000 (150 attendees from sponsors)
Tables of 10: $15,000 (10 tables, 100 attendees)
Individual Tickets: $4,500 (30 tickets)
Fund-a-Need: $30,000
Auction/Raffle: $10,500
And don’t forget to consider your cost per dollar raised in the earliest phases of budgeting. A Google search might tell you that it should only cost you $.20 to raise a dollar, but after Let’s Build Hope’s thirteen years of consulting, we don’t think that’s realistic for small to mid-size nonprofits. Keeping your CDR (cost per dollar raised) under $.30 is a better goal, and challenging enough: for this event, you would need to keep its expenses under $60,000!
Still Want Staff and Participants to Attend?
It’s worth mentioning again: your gala is not an appreciation event for staff or participants. There are other ways you should be doing that! But if you just can’t help yourself, here are some ideas to consider:
- Set aside one table for complimentary attendees. Determine a way for employees to win these seats, such as a peer recognition program that goes throughout the year and 5 are selected at random as winners (plus a guest). Be sure to set clear expectations for attire and conduct at the event. They may be event guests, but they still represent your organization at the event!
- Include an option on the event reply card asking for donations to fund a participant to attend the event. This option works great if you’re a school—ask people to donate so the teachers don’t have to pay!
Looking for more guidance on getting the most out of your events? Join us at LBH on October 8th for our next Launch & Learn – Inspiring Event Donors to Become Committed Annual Donors!
Want to dive in deeper? Check out our Crush Course for a complete online training experience with lessons on building a case for support, collaborating with your board, creating an achievable annual development plan, and crushing your revenue goals!