Your Gala is Cancelled (Again). Now What?

The month of March 2020 saw the cancellation of many events, large and small—and for those of us in fundraising, some of the most painful losses were our galas. At the time, we put together our six best pieces of advice for how to move forward with a major event cancellation or postponement. Now here we are, five months later, and the potential for holding a large in-person event anytime soon is not looking good. Those nonprofits that pushed off their spring galas into the fall are now in the same boat with their colleagues who usually host their event during fall gala season: forced to consider another round of cancellations.

At this point, you may be ready to throw your arms in the air and give up. We get it—the thought of planning something as time intensive as a benefit event is doubly stressful in a world where nothing about the future is for certain. Fortunately, the way we see it, you actually do have a few choices.

Let’s consider each of the options individually as you determine what the right move is for your organization:

1. Cancel the event

2. Postpone the event until spring or summer 2021

3. Transition the event online

Each of these options have their own unique pros and cons, and each is going to take work, so it’s really important that you involve some scenario planning in your process as you make the decision about how to move forward. 

CANCEL THE EVENT

Cancelling your event is probably the cleanest and most straightforward way to move forward, especially if your date is still a month or more in the future. Your biggest consideration at this point, however, will need to be the financial implications of the cancellation. Start by asking yourself the following questions:

1. Will you be able to retain your event revenue, even if the event doesn’t take place? For example, if you’ve already sold most of your gala tables, can you count on your buyers to honor their pledges even in the event of a cancellation? Hopefully, if the majority of your buyers are board members who are making the purchase as a part of their Give/Get expectations, the answer to that question is yes. The answer may even be yes if your buyers are corporate entities or individual donors who are close to the organization.  If you have already collected the cash on your table pledges, this is probably a much easier conversation to have than if you haven’t.
   
   Either way, make sure to prepare yourself for those conversations with your donors by crafting a clear story about how turning a table purchase or pledge into an outright gift will benefit the organization, and be fully tax-deductible.
   
   

2. What are the financial repercussions for terminating your vendor contracts? Review the agreements you signed with your venue, caterer, production staff, florist, photographer, and any other vendors you may have contracted for your event. The amount of money that you will still owe them may depend on how much lead time you are able to give before the cancellation.
   
   While you may have business interruption or event cancellation insurance, many insurance companies are not honoring claims related to COVID-19. While there is state-level advocacy and legislation happening around this issue in some regions of the country, in the short-term, don’t count on your insurance as a help to cover the losses related to a cancelled event.
   
   

3. Can you make up the difference? And do you need to? Reconfigure the budget for your gala or fundraising event. Put the total revenue you expect to retain over the total expenses that will not be refunded. Do you end up with a surplus or a deficit for the event?
   
   If you end up with a net positive result that matches your original goal for the event, amazing! If you end up with a net positive that falls short of what you needed to raise, or a net negative, ask yourself whether you have the capacity in your overall development operations to make up the difference that you need in another contributed revenue line.

Once you have considered these questions and have made the decision to cancel your event entirely, put a plan of action in place to ensure that your “i”s are dotted and “t”s are crossed before you start calling your table buyers and make an announcement publicly. The two biggest checklist items in this process are to terminate your agreements with your vendors and put in place a communications strategy around your announcement. What is the message you want to send and what is the story you need to tell around your cancellation? In addition to writing any email blasts or formal press announcements, prepare your team with talking points they can use as they engage in those important one-on-one conversations with your donors.

Last but not least, remember that anyone who purchased a ticket or table to your event had goods and services attached to that gift. When they decide to convert that purchase into a donation to your organization, you will need to issue them a corrected acknowledgement letter.

POSTPONE THE EVENT UNTIL SPRING OR SUMMER 2021

One of the perks of postponing your event is that it gives you a natural touch point with your gala donors. You have the opportunity to update them on what is happening with your organization, and keep them excited and engaged about an event that is still taking place, just farther into the future. As with the option of cancelling your event all together, the decision to postpone comes with its own set of considerations:

1. Is your new event date in your current fiscal year? While it may create some challenges for your projected cash flow, moving a gala or event within the fiscal year shouldn’t have repercussions for your operating budget (aside from any additional expenses incurred by postponing). However, if moving your event to the spring means that you are pushing it into your next fiscal year, you and your finance staff will have some work to do. Any costs you’ve already incurred in planning the event will remain in the current fiscal year, but you have the option of moving the revenue that you have already received into the fiscal year in which the event is now happening. We recommend consulting your accountant as you determine exactly where the retained revenue will hit your books. Regardless, make sure that you get confirmation from your ticket and table buyers in writing that they are allowing you to keep their money for your event on its new date.
   
   As you move your revenue into your next fiscal year, consider the gap that it may leave in your current one. If you are already staring down a large deficit in your current fiscal year as a result of the COVID-19 pandemic, then you may just decide to let your losses be what they are and move forward confidently with a plan for the next year. However, if you are in a position that you need to make up the difference, make sure that you have a strategy in place to do that.
   
   

2. How much flexibility is there in your vendor contracts? Take a close look at the agreements you’ve signed with your vendors. If you are simply postponing your event, rather than cancelling it, there might not be any financial repercussions. For vendors like a photographer, florist, or caterer, postponement might be as simple as changing your date in their calendars, and potentially shifting the payment schedule for your contract. If it isn’t clear from the written agreement, take the time to get on the phone with your vendor and talk it through. Although our culture has evolved to favor low-contact, written communications like email and text, it always pays to pick up the phone for a conversation that has the potential to be nuanced or challenging.
   
   If it is determined that you will incur fees as part of changing your date, make sure those are added to your expense budget for the event.
   
   

3. How can you leverage your Gala postponement? Yes, having to move your event is disappointing but on the bright side, having a new date might open up some exciting possibilities for your event.
   
   For example, maybe there is a speaker or performer who was not available for your original date, but is available now. If someone has already said no to you for scheduling reasons, take the opportunity to go back to them with a new offer for your new date.
   
   By pushing back your event, you’ve also bought yourself some extra time to take on projects like a flashy video or some other digital display. Pushing back your gala doesn’t mean that you have to set aside your work on it. Take advantage of your extra-long runway to get creative and make your Spring or Summer event an occasion that is not to be missed.
   
   And finally, don’t forget that you now have more time to sell tickets and tables to your benefit. Once your postponement is public, work closely with your Gala Committee and your Board to make sure that you are using your event as effectively as possible to raise funds for your organization.

One big risk factor to consider when thinking about postponing your gala is that you may have to postpone it again. None of us know what the state of the COVID-19 pandemic will be by the time we get to 2021, and there is always the possibility that big gatherings will still be considered unsafe, or even banned by your local government. If you choose to go this route, be prepared for another round of decision-making and donor communications, should you need to move your date again. Make sure to keep detailed notes on your communication plan, so you don’t need to reinvent the wheel for a possible future postponement.

Once you have made the decision to postpone, make sure that all your logistics and communication plans are in place before going public to your donors and broader audience. The last thing you need is to discover that your venue or caterer are unable to shift to your new date after you’ve already announced it.

TRANSITION THE EVENT ONLINE

Virtual galas were once the domain of the adventurous, but more and more they are becoming the norm. If you’re prepared to keep your event where it is on the calendar (or at least somewhere near it) and transition to a new format to keep your donors active and engaged, this may be the right option for you. If you’re thinking about pursuing a virtual gala, consider the following:

1. How can you use the event to raise money? Start by thinking about the donors who have already purchased tickets and tables to your formerly-in-person gala. Can you retain the revenue from those purchases even though the event is no longer a literal night out on the town? You might provide them a special perk to entice them to turn their table purchase into a donation, such as a special pre-event cocktail party on Zoom, or access to additional content that you aren’t providing to your broader audience. Some caterers are even exploring the option now of delivering meals at home to gala attendees, so they can retain a little bit of the big event experience.
   
   Then, start thinking proactively. Retained revenue from your Plan A is not the only way to use your virtual gala as a fundraising event. Many galas that are being moved online have no fee for entry, but that doesn’t mean you can’t also do an auction, raffle, or real-time pledge appeal. Explore tools that give you the platform to run a text-to-give campaign and virtual auction as a means to keep the fundraising going, and even reach people you might not have connected with before.
   
   Finally, not all of your funds need to be raised during the event in order to support its revenue goal. Consider sending a follow up email to everyone who opted in to view your gala for free. Include a call to action in that message that asks them to make a contribution to your cause.
   
   Keep in mind that if you have not yet sold any tickets or tables to your gala, and there is no significant revenue to retain from your originally planned event, then you should assess your original benefit event fundraising goal. Make some educated guesses around how much you think you can raise, compare them with the amount you will need to spend to make your virtual event happen, and figure out if there is a gap in your net that you need to make up somewhere else in your fundraising activities.
   
   

2. Do you have the capacity to transition online? Let’s not forget that producing a live-stream and producing a live event require two different skill sets. Audiences may have been forgiving of technical mishaps in the early days and weeks of the COVID-19 pandemic, but now they are becoming accustomed to more virtual content at a higher quality of delivery. Luckily, many theatrical production and event managers have been expanding their skills sets and are now prepared for the logistics of running an event online. Make sure you have someone like that on your team. This is not the time to wing it! If the skill set does not exist on your current staff, outsource the project to a vendor who can work with you from the beginning of the planning process.

Virtual galas are exciting territory with a lot of potential for creativity as you dive deep into the storytelling around your mission and programming. We are likely to be living in a remote-working and event-free world for some time to come, so if you are able to explore the option of adding a virtual event to your calendar, we encourage you to give it a try! That said, just because you get to ditch the formal wear, doesn’t mean that these events aren’t still a lot of work. Make sure that you are staffed appropriately for the event, both in terms of time and hard skills, to ensure that it goes as smoothly as possible.

For more on Galas, check out Adapting Your Auction for a Virtual Setting: 5 Essentials, 6 Important Steps for Cancelling Your Event Due to Coronavirus Concerns, and The Day After Your Gala—What Happens Next?.