Published in Nonprofits

Nonprofits hit pause on fundraisers, grapple with loss of revenue

BY Sunday, May 24, 2020 08:57am

Rescheduled. Postponed. Canceled. 

These are the words Michigan nonprofits are using frequently these days when talking about the status of fundraisers that are critical to the financial health of their organizations.

“Early on, many nonprofits were in the process of postponing or rescheduling,” said Kelley Kuhn, vice president of the Michigan Nonprofit Association, noting the reactions were in response to state-mandated closures implemented to slow the spread of the highly contagious COVID-19. “Now, they’re canceling or postponing.”

The cost of these shifts has been devastating for organizations, including one that was counting on raising an estimated $250,000 through an event that is now canceled, Kuhn said.

Many nonprofits are thinking about these fundraisers from the perspective of getting only a percentage of revenues they normally would have, Kuhn said.

For some nonprofits, the dollars raised at the signature events also affect their ability to get matching grants, said Deb Droppers, owner of the Kalamazoo-based The Event Company and event management program coordinator at Western Michigan University.

“They’re not only signature events, they represent federal dollars that have to be matched through local intent,” she said.

In the 38 years that she has been involved with event planning, Droppers said she never realized until now the amount of work that goes into postponing or rescheduling events. That included the 33.5-mile Kal-Haven Ultra Trail Run, which was moved from April to Nov. 1 “after 90 percent of the work to organize it was completed,” she said. 

“We had to find a date that didn’t conflict with other local and regional events that were being postponed,” Droppers said. “This event with 33.5 miles is big enough that it can’t be close to another marathon or half marathon.”

While this event is likely to happen, Droppers said there are many that continue to be in a holding pattern as the effects of the coronavirus pandemic escalate. 

As the uncertainty continues, many nonprofits are weighing the costs involved in fundraising events versus being able to provide the services that they’re doing, Kuhn said.

A survey conducted by Detroit-based Montgomery Consulting Inc. after the coronavirus outbreak in Michigan found that only 5 percent of respondents thought the climate for fundraising would improve, while 87 percent said they thought it would be worse than 2019. 

In addition to having staff work remotely, closing their facilities and programs to the public or providing very limited services, almost 54 percent of respondents said they had canceled one or more fundraising events while another 36.5 percent said they were considering it.

‘Huge loss’

The Community Healing Centers in Kalamazoo reduced the number of individuals in its alcohol and drug treatment program by 50 percent to comply with social distancing policies, said Executive Director Sally Reames. 

“We’re the only major provider of these services in the Kalamazoo area and we’ve already taken a huge loss,” she said. “We haven’t lost anybody to illness including our nurses and staff, but we have lost half of our revenue because of the reduction in services. We’re scrambling like crazy for grants, and the reality is we don’t know what’s going to happen come July.”

The Community Healing Centers’ signature event known as Roof Sit, a three-day function featuring a local disc jockey sitting on a roof in addition to other community-focused activities, was originally scheduled to take place in June. The event was rescheduled to Aug. 20-22. It is an annual fundraising event for Community Healing Centers’ Children’s Programs that provide treatment and prevention services for children who have suffered physical or sexual abuse.

“Last year that was a $100,000 event for us, but I don’t see that happening in August,” Reames said.

Despite already receiving financial gifts from small family foundations, a trend Reames hopes will continue, she thinks people may feel “skittish” about going out in groups for some time. 

This has led Reames and Roof Sit organizers to consider different options for delivering the event, which the group has been holding for more than 20 years.

“We’re trying to do events that are appropriate for the times,” she said. “We will have a food truck where people can drive in and pick up their dinner or offer the option of sitting at a small table for two and enjoying a band and the silent auction. We’ve also decided that we’re going to try an online auction, which we haven’t done before.”

Going virtual

The cancellation of the 35th annual Ribfest, which was to take place July 30-Aug. 1, also has prompted the leadership of Kalamazoo-based The Arc Community Advocates to think virtually. The Arc is an advocacy organization that makes it possible for each person with a developmental disability to participate fully in all aspects of the community and to support the effort of each individual to determine his or her own future.

Arc Executive Director Sheldon Schwitek said his organization benefits financially from the event, which is sponsored by radio broadcaster Townsquare Media Inc.

“We are now looking at virtual opportunities to partner with food trucks and local BBQ places,” Schwitek said.

The organization also is considering a different tactic for its “Arctoberfest” fundraiser, scheduled for Oct. 24 at the Kalamazoo Institute of Art. 

“We’ll be canceling the in-person dinner and will sort out what other opportunities there will be for that event,” Schwitek said.

Given the uncertainty surrounding safe levels of activity and engagement, Schwitek thinks the opportunities to host in-person gatherings will continue to be restricted. However, he is seeing an increase in the level of creativity surrounding fundraising efforts, including a virtual wine-tasting featuring a sommelier.

Difficulty connecting

While numerous organizations have been using virtual platforms to get their messages out in front of people, The Event Company’s Droppers said a virtual testimonial from a client doesn’t have the same effect as one delivered in person.

“Putting the client in a storytelling testimonial aspect gives them the ability to say, ‘I am the face of where your dollars go,’” she said. “There is a learning curve in how you do this virtually to create the tingle that goes through your body when you hear a story. When you’re part of a live event, it’s easier to feel that you believe in what that organization’s doing.”

Droppers, who also is the founder of the nonprofit Kalamazoo Experiential Learning Center, said virtual can be used as a bridge, but the power of events like Roof Sit happens when you and the person sitting next to you are hearing and believing the testimonial or message being delivered. She said this is what encourages people to donate with immediacy.

“You miss that connection because when it’s virtual, it’s so difficult to create that emotional connection,” she said.

Read 1147 times Last modified on Tuesday, 26 May 2020 13:12
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