Fundraising with overhead, especially high overhead, drains precious resources from a community. Volunteers put a lot of time into planning events, paid employees often dedicate their own working time to planning an event, parents on "give or get" hours often trade their time for scholarship dollars, and those who donate to an event will not turn around and give again if the event is unsuccessful.
Lately, I've been building up a collection of envelopes for fundraising events and after seeing the
discussion on Hirhurim regarding fiscal accountability of charitable organizations, I figured it was time to look at the latest 990s that are available for the schools that are sending banquet invitations or offering tickets to an events, etc. (Not all organizations file 990s, but those that are available can be found at Guidestar).
Now the 990 form is not the most user friendly form in the world, nor are the numbers some schools report believable, rendering the form completely useless (although as a donor it is all I've got to go by). Fundraising dollars can be shown in different places making the actual gain or loss difficult to determine, or a schedule can co-mingled special events covering up data that would show if a fundraiser is worth its while. Needless to say, it is difficult for the reader to get a complete or even accurate picture. But being more familiar that your average Joe with the fundamentals of accounting, I believe I was able to reach some conclusions about the profitability of certain fundraisers.
One major fundraiser that a certain school puts on year after year, which uses plenty of precious resources in terms of time and overhead dollars, only managed to net $2000-$3000 during two of the last the years reported. Yet the fundraiser has become an annual event nevertheless. Now a simple rule of finance is that you don't throw perfectly good money after a loosing cause. While $2000 to $3000 might not be an actual loss, after indirect costs are considered(give or get dollars, staff time, and dollars spent/donated that will not be spent donated again) it may well be a loosing cause.
Another fundraiser I saw reported that was a definite loss was a raffle. I imagine what happened was that the prizes were paid for up front and ticket sales were estimated far too high. (Wish I knew what the prizes were. When I was asked to buy a ticket I told the kids selling the tickets I prefer to give cash). As far as I am concerned a raffle should never be run at a loss.
Now I know that mistakes will happen and that sometimes fundraisers will bomb. But one has to wonder if many of the fundraisers that are being conducted are simply not worth the effort. Perhaps "name recognition" has a indirect benefit that can't be calculated and that these fundraisers really are a success even if the numbers don't reflect that. I don't know the answers. But after seeing some low net gains and even some certain losses, I'm wondering how precious hours could be used more effectively.