FUNDRAISING EVENTS

FPLG COVID-19 RESPONSE

FUNDRAISING EVENTS

[UPDATE: November 16, 2020]

Many nonprofit organizations around the nation have gracefully and creatively accepted the challenge of creating virtual fundraising campaigns and events in place of their usual in-person activities. Because their supporters are now used to online substitutes for many of their usual activities, this pivot has been smoother than expected, and donors have been willing to join in.

But virtual fundraisers generally raise far less than the events they are meant to (temporarily) replace. On the other hand, most of the usual expenses of staging fundraisers are erased, so that accounts for substantial savings.

With the news of two or more possible vaccines on the horizon, there may be light at the end of this dark tunnel by at least mid-2021. In the meantime, though, many groups have been willing to share their ideas and experiences. A key to success in this (short-term) pivot from traditional fundraisers is to avoid trying to “match” or “substitute” the online event for the event that was planned before the pandemic or that was an annual fundraising tradition of the organization. It requires more nuance and creativity to be effective.

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[UPDATE: May 26, 2020]

As with many other aspects of life during the “new normal” of the COVID-19 pandemic, the nonprofit sector and the public have adapted quickly and accepted the idea of virtual fundraising events. Even in the short time since the beginning of the crisis, a body of examples and advice has emerged on how to plan and execute these programs.

But with the somewhat unexpected and ill-advised rush by all 50 states to “reopen” in quick stages, questions will undoubtedly arise about if, or when, nonprofits should start thinking about holding in-person events again, with or without safety restrictions.

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[April 3, 2020]

In early March, nonprofits around the nation wondered whether they might have to postpone a scheduled fundraiser – or even cancel it. By the end of March, it was clear that all of these events will be on hold indefinitely.

These organizations scrambled to cope with the fallout: loss of anticipated revenue, penalties or cancellation fees, disruption to carefully arranged fundraising plans.

Many nonprofits have turned to online events.

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By and large, the events don’t generate as much revenue as their in-person counterparts….[But while] revenue may drop, the expenses associated with these events, assuming contracts for them aren’t already in place, can fall as well…. [and some] organizations were able to expand their efforts, bringing a global reach to local events.

— Richard H. Levey, NPT (8/24/20)

Canceling an event on short notice triggers cancellation fees, unless the force-majeure clause in a nonprofit’s contracts applies to excuse such action, or in legal terms, to excuse performance of duties under the contract. (Event-cancellation insurance may also apply to reduce the financial liability.) However, determining whether and when a force-majeure clause will apply is not always clear.

— Anne K. Gerson, Esq., Venable LLP (3/30/20)

If an organization obtained event cancellation insurance, for example, which is typically written to cover specific events, it should check to see if there is an exclusion for communicable diseases. Nonprofits should provide timely notice to their insurance providers and keep accurate records, track expenses, and document losses carefully.

— Gene Takagi, Esq., NEO Law Group (3/20/20)