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THE SCIENCE BEHIND SUCCESS

AdataanalysisstudyofselectedJuniorLeaguefundraisingstrategies

Vivanista, Inc. 2011

Vivanista wanted to find out if Junior League charitable fundraising events were affected by the economic downturn and if fiscal year 2009 (FY09), which usually ends mid-year in 2010, was better or worse than fiscal year 2008 (FY08). Twenty-one of the largest Junior Leagues from around the country were selected as a sample. Vivanista has analyzed a variety of charitable events, including those produced by Junior Leagues mentioned in this study. Based on this analysis, we will be introducing the concept of two categories: horizontal and vertical.

Horizontal events are open to the public, have a ticket price of less than $50 and attendees can purchase tickets at the event without pre-registration. The flow of a horizontal event does not require all attendees to be at one place at one time and can run multiple days. Examples include holiday markets, home tours and rummage sales. Vertical events, although also open to the public, have a finite number of tickets available and often a greater portion of attendees are associated with the organization in some fashion (e.g. donors, members, volunteers, and board members). The average ticket price is greater than $50 and tickets are usually sold in advance of the event. Examples include galas and fashion shows.

The study was conducted to also determine which types of events were most successful in both years. We asked the following questions:
1. Did fundraising event profit margins increase or decrease from FY08 to FY09? 2. Which event is most popular? 3. Of the most popular events, did profitability increase or decrease from FY08 to FY09? 4. Which event is most profitable?

Neither the Junior Leagues nor The Association of Junior Leagues International, Inc. were involved in the development of this report nor do they endorse its findings.

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1. Did fundraising profit margins increase or decrease between FY08 to FY09? Assumptions:

Fundraising revenue is based on IRS Form 990 Schedule G, line 1d1. Expenses are based on Schedule G, line 10d. Event profits are based on gross receipts (1d) less direct expenses (10d) and do not subtract charitable contributions because there is inconsistency in how organizations report such and is irrelevant to the overall profit generated for the organization.

FundraisingEventProtMargin
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

FY08 FY09

CHART 12

Key Findings: Even though overall revenue fell by 7 percent, average fundraising event profit only dropped 3 percent, from 56 percent in FY08 to 53 percent in FY09. This was due, in part, to fiscal controls which cut expenses by 1 percent year to year. In the case of both Washington, D.C. and Fort Worth, revenue of their primary events went up 20 percent and 13 percent respectively. It is worth noting that each also cut expenses of those
Gross receipts and revenue are terms used interchangeably in this study. The JL of Raleigh produced an Inaugural Ball in FY08 that did not occur in FY09 nor FY07 and was therefore not included in any analysis within this study.
2 1

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Fundraising Event Strategies Case Study

events by over 30 percent. The resulting profit margins grew from 25% or less in FY08 to 55% for both Leagues events in FY09. Their success is reflected in Chart 1.
2. Which event is the most popular?

Assumptions:

Only events that grossed over $50,000 were included. Resale boutiques and cookbook sales were not included. Only events that occurred during both FY08 and FY09 were included. Home tours include kitchen and garden tours. Galas include Balls and Auctions.

EventPopularitybyType
70% 60% 50% 40% 30% 20% 10% 0% Holiday Markets HomeTours Rummage Sales Galas Fashion Shows Horizontal VerHcal

CHART 2

Key Findings: The most popular type of event produced is a holiday market implemented by thirteen of the twenty-one Leagues surveyed, or 62 percent. Holiday markets are held in the fall leading up to the holiday season; all 2011 markets will be held in October and November except for Washington, D.C. which will hold its Capital Collection of Holiday Shops on December 3 - 5. Galas are the second most popular type of event with nine of the twenty-one Leagues producing such. Two Leagues, Dallas and New York City, each produce two galas per year. In FY09 the Dallas Ball generated roughly three times the revenue of their secondary gala, an
JuniorLeagueFundraisingCaseStudy

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Auction, whereas New York Citys Winter Ball generated about twice the revenue of their secondary event, the Thanksgiving Eve Ball. Less popular are home tours, rummage sales and fashion shows with only three Leagues producing each type in FY09. Notably, in FY08 the Junior League of Nashville produced the Celebrity Kitchen fundraiser, although it was not included in their FY09 Form 990 and it is assumed it was not repeated.

3. Of the most popular types of events, did profitability increase or decrease from FY08 to FY09? Assumptions

Only events that were categorized as a holiday market, home tour, rummage sale, gala, or fashion show were included.

FY08toFY09ComparisonofFiveEvent Types
$400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $ GrossReceipts Expenses Prot FY08 FY09

CHART 3

Key Findings For the five main types of events revenue increased slightly, 1 percent, from an average of $366,290 in FY08 to $368,282 in FY09. This is more encouraging than overall revenue as highlighted in Question 1, which declined by 7 percent. The difference is that Question 1 addressed all events listed on the Form 990, even very small ones. The smaller events may very well not have been as profitable as the largest one(s).
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Of the most popular event categories, which is the most profitable? Assumptions:

Event profits are based on gross receipts (1a or 1b) less direct expenses (10a or 10b) and do not subtract charitable contributions. Horizontal events (holiday markets, home tours and rummage sales) are indicated in blue in Chart 4 whereas vertical events (galas and fashion shows) are in red.

CHART 4

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FY09ProtversusExpenses
$400,000 $300,000 $200,000 $100,000 $ Holiday Markets HomeTour Rummage Sale

Galas

Fashion Show

Holiday Markets PROFIT DIRECTEXPENSES $254,985 $180,238

HomeTour $217,831 $78,838

Rummage Sale $59,913 $137,806

Galas $198,640 $175,255

FashionShow $177,980 $359,927

CHART 5

FY08ProtversusExpenses
$300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $ Holiday Markets HomeTour Rummage Sale

Galas

Fashion Show

Holiday Markets PROFIT DIRECTEXPENSES $295,808 $218,841

HomeTour $89,544 $127,942

Rummage Sale $127,048 $173,579

Galas $236,175 $137,522

FashionShow $181,375 $243,617

CHART 6

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Key Findings: 1. Holiday markets were the most successful in terms of actual dollars generated an average of $254,985 and $295,808 in FY09 and FY08 respectively. 2. Home tours are by far the most profitable in terms of percentages - 73 percent in FY09, up from 41 percent in FY08. One advantage home tours have over most other types of events is that the League does not require a rented event space since the fundraiser takes place in peoples homes. Hence, venue expense is minimal, if any at all. 3. Regarding rummage sales, there were three held in FY09 up from two in FY08. Given the small sample size and the wide swings in revenue and profits, the results are inconclusive. For example, in FY09 the Washington, D.C. League realized an 89 percent profit margin on their Rummage Sale, up from 43 percent the prior year. On the other hand, the Junior League of Birminghams Bargain Carousel, its main fundraiser, generated over $500,000 in revenue, up 11 percent from FY08. Still, the profits dove from 42 percent to 25 percent in FY09 given that their direct expenses increased by 50 percent. 4. Galas were the most profitable in FY08 but sank to third place in FY09. Revenues stayed constant year to year, an average of $373,697 in FY08 versus $373,894 in FY09. But for eight of the eleven galas produced in FY09, direct expenses increased by an average of 27 percent. 5. Fashion shows were the highest revenue producers in FY09 with $537,907, up from second place in FY08 at $424,992. But, like rummage sales, three were held in FY09 up from two in FY08. Moreover, the JUNIOR LEAGUE of San Francisco disproportionately skewed the results given their $800,000+ revenue dwarfing the American Girl fashion shows in Boston and Minneapolis, both of which generated roughly $73,000 in revenue.

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SUMMARY
Even though overall event revenue decreased from FY08 to FY09, the major five event categories (holiday markets, home tours, rummage sales, galas, and fashion shows) realized a revenue increase. Among the Leagues analyzed, holiday markets were the most popular type of charitable fundraising event and generated the greatest profits $254,985 on average. Home tours, however, were more profitable as a percentage of revenue 73 percent in FY09, up from 41 percent in FY08. Holiday markets are usually comprised of various activities within a multi-day event, and usually more activities are added in successive years. Holding a variety of sub-events will appeal to different constituents, which mitigates risk. For example, women may go together during one of the shopping days, yet families will attend the family breakfast. This differs from galas or balls which are one-time, one-day events.

OPINIO N
Based on Vivanistas analysis of a broad spectrum of nonprofit fundraising events in addition to the Junior League, the ramp rate to profitability for horizontal events, like holiday markets and home tours, is longer than vertical events because they are dependent on attendees who are not necessarily predisposed to support the charity. This is also true for rummage sales, but because of their poor profitability 42 percent in FY08, down to 33 percent in FY09, we do not consider the data to be as reliable given the heavy weighting of the Junior League of Birminghams successful Bargain Carousel which brought in over $500,000 in revenue in FY09. As a horizontal event, a holiday market draws from the community and prospective attendees may be enticed to attend because of the shopping, not because of their affinity to the nonprofit organization itself. On the other hand, the audience for a vertical event such as a gala or fashion show usually comes from people committed to the organization. Yet with ticket prices substantially higher, during difficult economic times we believe theres a greater likelihood that attendance will decline more for a vertical event than a horizontal one. With respect to Gala expenses, we question why direct expenses rose so dramatically for eight of the eleven galas produced by the various Leagues. Was this because (given the uncertainty of a tough economic climate) to drive attendance of past guests as well as to cultivate new attendees? The data does not address that question but it is worth asking when developing contingency plans during the budgeting process.

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Another question we have is: why so many holiday markets and galas? We anticipate tradition and historical profit margins are two of the most prevalent factors. It is noteworthy that these two types of events have indeed been the best generators of profit in actual dollars (versus percentages) of the five categories. Seeing the Junior League of Fort Worth holiday market Christmas in Cowtown profits soar from roughly $80,000 in FY08 to almost $270,000 in FY09 it is reasonable to assume their holiday market is sustainable even when there are economic bumps in the road. As for other types of horizontal events, a home tour may be a good option as a new event since it provides a greater profit opportunity given that expenses are substantially lower due to not having to rent a venue. An organization should weigh this against the issue of having to drive attendance beyond their community of supporters. What the charts and analyses do not show, however, is the number of volunteer hours that goes into producing the various types of events. When considering whether your organization should take on a particular type of fundraising event, the availability of volunteers should be a major consideration. Additionally, the volunteer experience should be a factor. Often, fundraising events draw volunteers to an organization because of the social experience garnered from committee work. Also, it gives them an enriching role in raising money for that organization. So profit goals should not be the only benchmark of success. The final question is, if all applicable organizations, such as the Leagues in this study, shared their successes as well as those obstacles theyve overcome within each event category, would profits improve even more? We anticipate the answer is yes.

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Written by Layne Gray Additional research and editing by Willow Jones, Brigit Lindsey, Bailey Meyers, Kaori Ogawa, and Laura Turnbull Special thanks to GuideStar and The Foundation Center

AB OUT VIVANISTA Vivanistas mission is to help nonprofit and volunteer organizations improve their charitable fundraising using field-tested best practices.

Brand: Vivanista gives nonprofit organizations the tools to differentiate themselves and their fundraising events while maximizing revenue and building sustainable communities. Promote: From traditional media to on-line social media, Vivanista shares techniques to build awareness for fundraising events. Promotion is especially important with so many worthy causes vying for donor attention and dollars. Profit: Both pre-event and on-site revenue are important yet can be tuned to increase the return on investment of fundraisers, large and small.

The Vivanista Summit, November 10 12, 2011, at the Westin San Francisco Airport, will provide volunteer leaders and fundraising chairs an opportunity to learn from experts fundraising best practices as well as to share insights and experiences with other volunteers from around the U.S. For more information, please go to http://vivanista-summit-vivalg.eventbrite.com/ For more information on Vivanista, please visit www.vivanista.com. For any questions or to request additional information, please contact annie@vivanista.com.

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APPENDIX A: DATA FROM FORM 990S Data for Chart 13: Event Profit Margins

Data for Chart 2: Number of Leagues implementing each type of event


HolidayMarkets HomeTours RummageSales Galas FashionShows 62% 14% 14% 43% 14% 13oftheJLshostholidaymarkets 3JLsholdhometoursinFY09,4inFY08 3JLsconductrummagesales 9oftheJLshostannualballs 3JLsheldfashionshows

Data for Chart 3: Increase or decrease of top five event categories year over year
FY08 GrossReceipts $366,290 Expenses $180,300 Profit $185,990

See also Reference Data on pages 14 and 15


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FY09

$368,282

$186,413

$181,870

Data for Chart 4: Profit by type of event


HolidayMarkets HomeTours RummageSales Galas FashionShows FY08 FY09 57% 59% 41% 73% 42% 30% 63% 53% 43% 33%

Data for Chart 5: Revenue, expenses & profit for each type of event in FY09 2009
HolidayMarkets HomeTours RummageSales Galas/Balls FashionShows

GROSS RECEIPTS
$435,223 $296,669 $197,719 $373,894 $537,907

DIRECT EXPENSES
$180,238 $78,838 $137,806 $175,255 $359,927

PROFIT
$254,985 $217,831 $59,913 $198,640 $177,980

Data for Chart 6: Revenue, expenses & profit for each type of event in FY08 2008
HolidayMarkets HomeTours RummageSales Galas/Balls FashionShows

GROSS RECEIPTS
$514,650 $217,486 $300,627 $373,697 $424,992

DIRECT EXPENSES
$218,841 $127,942 $173,579 $137,522 $243,617

PROFIT
$295,808 $89,544 $127,048 $236,175 $181,375

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Reference Data: For each League, line 1 is FY09, line 2 = FY08


Markets Balls/Galas RummageSale FashionShow HomeTours

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