17 Aug Funding Events: Sponsorship, Tickets, Negotiating
When organizing an event for your community you obviously need to figure out how to fund it, at least if you’re providing food, drinks, or other premium features (in-demand presenters, live music, etc.). Below I explore the options for funding these based on my experience.
This is my favorite approach for putting on a high-quality, high-polish events.
First the upsides:
- You will often raise more in sponsorship than you will from tickets, meaning you can do better things for your events.
- You increase your audience size by having multiple sponsors, because they will promote the event as well.
- You will have higher turnout because you don’t need to charge for tickets, or can charge less.
- You create valuable community partnerships. Nothing builds trust better than a high-stress situation like an event. When sponsors see you pull it off with style they are more likely to work with you on other things.
- It opens the door to other non-event sponsorships (ongoing in-kind, annual cash, etc.).
There are couple of downsides though:
- The more sponsorship money you have the more you’ll tend to spend money on things you could have done for less.
- Sponsorship is not as easy as calling up Company X to ask for a donation. It requires more upfront polish to attract sponsors. You still have to do the sponsor dance, meaning you need a relationship and reputation with the sponsor to get them to participate.
Some things to note:
- Sponsors only want to sponsor a done deal. They will be far less likely to sponsor if their money is the catalyst for the event to occur. Even if your event happening does ride on their money, you have to make it look like it’s happening no matter what and that they better hop on the boat if they want to go to “valuable audience town.”
- Nobody wants to be the first sponsor, so offer a discount or special perk for the first mover.
- Raising sponsorship is a job in and of itself, but it replaces some of the need to market as you’ll have a higher conversion rate for free tickets.
- You can get a cash sponsor, in exchange for their participation in the event (e.g. logo, speaking slot, booth, promotion, attendee list) or you can get an in-kind sponsor (e.g. goods or services like audio, music, food, drinks, staffing, furniture).
This is my least favorite approach because it requires a stellar reputation for high-quality events or needs to ride on the reputation of the event participants (speakers, instructors, companies sponsoring or providing content).
- Forces you to create content that’s good because otherwise people won’t buy. People will show up to free sponsored events if only for food and networking. I once went to a great event in San Francisco, the last Pando Monthly event in fact, that cost some money (like $20) to go to. They only had pizza, beer, and wine, but they had the founder of DoorDash, Tony Xu, and Sequoia’s Alfred Lin. It was an amazing conversation and I would have paid even a little more to go.
- There’s less of a dropout rate with tickets (i.e. people who sign up and no-show) because people are far more likely to show up when they have some skin in the game, even if it’s only $5. People value paid things more.
- It’s hard to charge more than $20 or $30 for an event such as a panel discussion or speaking event, unless the speaker is nationally renowned. For festivals or conferences you can sometimes charge a few hundred, but expectations are very high.
- You’ll almost never make enough money to pay speakers, again, unless you can charge more which requires the speaker to be very well known. Malcolm Gladwell came to speak at our local university a couple years ago and tickets were $80. I still doubt they made money.
- Additional staffing to check tickets is required.
Some things to note:
- Use in combination with sponsorship to make more money. Make sure your sponsors know you’re charging a little.
- Partner with other groups and give them a discount code (10-20%) to sell more tickets.
Negotiating and In-Kind Sponsorships
Just about everything is negotiable. You may have the money to pay full price to rent a PA and stage setup from your local audio company, but that doesn’t mean you have to. Especially if it’s off-season for events in your area, you should get a decent discount (no, not 50%, but somewhere in the range of 10-20%). Remember that to them the equipment is just sitting there if it’s not being used, so some money is better than no money as long as they are still making a profit.
Food is harder to negotiate because there’s such high overhead for most restaurants and caterers. Food is expensive, staff is expensive. Most of the cost of food comes from labor.
You can often get goods and services donated or sponsored for your event. In my experience, alcohol is the easiest to get sponsored because there’s already so much markup on it. Marketing is an alcohol manufacturers largest expense so it makes sense for them to put their brand in front of a a large group of people if it matches their customer archetype.
Food is a totally different story. If somebody on your team is thinking you’ll get food sponsored because it will help promote the restaurant or caterer, they are delusional. This is one area you need to spend money on.
In my entire career I’ve been able to get food sponsored only once and that’s because the audience was a group of people who were highly likely to be in charge of events in the future, or in charge of the people who run those events. They were CEOs, community leaders, politicians, non-profit leaders, etc. Chances are, your audience is not that, at least not typically.
If you are able to miraculously get food sponsored, it will be cheap, it will not be much, and it will likely only be once.