Your answer may be, “Of course. Raising funds is what a gala does.”

It’s an obvious answer but it might be wrong.

But let’s take a quick detour. We can first list a few reasons why it may, in fact, make sense to hold a Fundraising Gala.

First reason - maybe your group is new and your work is relatively unknown in the community among upper middle class donors capable of giving $1000 a year or more* to your group. If you have a good list of those folks, it might make sense to have Fundraising Galas for a couple of years, and then shift your resources into other fundraising strategies. Caveat: Somehow, you need to secure upfront investment budget for the gala event, which can be difficult for many new groups.

A second reason may be that you may have established a long history of financially successful galas, and your ROI is high even when including the dollar value of staff time. The groups that put on these galas are rare. Behind even the most “successful” galas that raise over a million dollars are expense budgets that eat up most of the money “raised”.

A third reason might be that your group has plenty of budget for fundraising and/or you want to create more of a social community out of your donors collectively. (OK, I can hear you groaning – when are these conditions EVER met?! And is it really your job to provide social events for the community?) I’m assuming there must be well-endowed private educational institutions or museums out there somewhere who might have at least one of these goals!

In real life, when staff time is figured into the cost of putting on a fundraising gala, many organizations actually lose money on their gala.

Why should we figure in staff time as a cost? Because staff time can be devoted to various activities and when it comes to fundraising, there are many choices. Some activities and programs like major gifts fundraising, grant writing, planned giving, and capital campaigns, have a large and positive return on investment. Even online fundraising, at least once donors make their first gift, has a higher ROI than putting on a gala.**

The cost of staff devoting lots of time to organizing a gala, especially if repeated year after year, can even be tragic for the organization’s bottom line***.

Volunteer time (including that of board members) has a monetary value for some purposes, but more importantly represents opportunity cost. What else could these volunteers could be doing for your group? Finding new donor prospects or telling the story of your group’s work in their networks might be much more profitable.

So unless you figure out your ROI on each fundraising activity that takes staff time and volunteer time, you may be wasting your group’s precious resources on something that gives you very little net income.

In the nonprofit field, fundraising galas are notorious for bringing in gross income that gets consumed by the expenses of the event, both outright and in opportunity cost.

Don't have a gala just because you've always done it and some donors love the party. It may be consuming resources while not supporting your mission.

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*Most attendees pay a “per ticket” price for the event that covers the cost of the food, the servers, and the facility. For galas, these days the ticket price is usually at least $250, with personal or bar tabs on top of that. Also, guests raise their paddles for cash gifts and bid on auction items – which could easily add up to another $750 on average. As a result, in order to achieve some net income, these events should focus on inviting attendees who can afford to spend about $1000 per person for the evening. Sponsorships can bring this down a bit, but all revenue sources have to maximized for an event like this to be a net money-raiser for the organization.

**The observations I've provided above can be applied to most fundraising events, not just Galas, but Galas tend to require even more upfront cash investment than other events. In general, events are a time suck without much net financial return for the host nonprofit.

*** I've relied on various sources for my conclusions above, starting with James M. Greenfield's books on fundraising cost effectiveness. His results have been confirmed by AFP and other nonprofit associations.

© 2025 Dianna Smiley LLC