I was recently in a conversation with several people that had previously organized one or more community events. The topic evolved into a discussion of Sponsors, and eventually, fund raising. Being able to adequately raise the funds necessary is critical to producing a successful event. Many vendors will readily provide products for raffles and give-aways (SWAG), but the success of the event hangs on being able to raise cold, hard, cash. Venues and equipment have to be rented, refreshments and lunches purchases -and insurers seem to always require payment. Being able to draw upon the supporting community of vendors for sponsorship funding is essential to producing free community events.
One of the topics we discussed is an issue that seems to be just below the surface in the community at large -it’s there, and no one really wants to bring it into the open. (Andy Warren wrote about the subject in this post just a few months ago.) The issue we discussed is about financial transparency -including what to do with excess funds after the event. And further, is it necessary or appropriate that all funds raised in the name of an event be expended solely for that event? It was even emphatically stated that it was good to over subscribe sponsorship for the event and re-direct the excess funds to other purposes. Some adamently postulated that intentionally over selling sponsorships allow funds to be used to support other seeming worthwhile community activities.
And I thought -just hold on now. To me, that’s approaching being misleading, if not outright deceptive to sponsors -and to the community at large.
My concern is this: If we approach a potential sponsor for funds to produce ‘Event A’, in my mind, the sponsor has an expectation that the funds go to produce ‘Event A’. If some of the funds are diverted to support activities B, C, D, etc., sponsors may feel that they are being unfairly used to support activities that they may not have chosen to support outright. Or at the very least, they were not provided the opportunity to make a rational decision to support activities B, C, or D. Vendors vote with their dollars -they give money to events that make sense for them. They are calculating the ROI for access to the attendees -factoring in the competitive environment with other sponsors. More sponsors means less access. When events are over subscribed, the calculation becomes skewed. When unknown amounts of sponsor money is diverted to other purposes, the calculation becomes almost worthless.
If organizers deliberately use the event fund raising as a cover to gain funds for other purposes, no matter how worthy, there is a real danger that sponsors will stop giving money. If that happens, everyone loses.
I propose that community events embrace transparency and provide a public accounting of Sponsor funds. Granted, there may be valid reasons to not disclose individual Sponsor contributions, and you will notice that is not being called for here. I propose to break this down into just a few simple categories -such as:
Total Received, less
- Venue, Equipment Rental & Insurance
- Banking Fees and Taxes (Including Paypal Fees)
- Printing, Signage & Misc Supplies
- Volunteer Expenses (Shirts, pre/post Event, etc.)
- Speaker Expenses (Gifts, Shirts, Dinner, etc.)
- Event Food & Refreshments
- Attendee SWAG (shirts, etc.)
- Attendee After Event
Amount Left Over
And then provide a statement of how the left over funds (if any) will be used to support the community. This level of transparency will allow sponsors to understand how their funds are being used.
I recognize that there may not be simple agreement to this level of public disclosure, that situations can be complex, and that there may be valid justification for some financial obscurity. Let’s start a public discussion about what is best for the community at large. To continue the status quo, where there are below the surface grumblings, questions, and even suspicions, is not good for the community at large.
I’d like to hear your thoughts on this.
- Should all funds raised for an event be spent solely for that event?
- And should event organizers be more transparent about funding AND expenditures?
(The recent SQLSaturday Oregon 2011 Financials are published here.)
(Originally published at http://1568.com/arnie)