Shift From Special-Event Fund-Raisers Predicted

Invitations piling up?

Not to worry: They may be thinning out soon, if predictions by county fund-raising executives prove accurate.

A panel discussion of fund-raising trends in Orange County--among them a trend away from honorary dinners and other special-event fund-raisers--was the focus of the November meeting of the Orange County chapter of the National Society for Fund Raising Executives. The luncheon took place last week at the Grand Hotel in Anaheim.

John Miltner, vice chancellor of university advancement at UC Irvine, and Jack Shakely, president of the California Community Foundation, addressed the volatile issue of changing tax laws and corporate giving; Merritt Johnson, president of United Way of Orange County, warned against profit makers in a nonprofit world.

But probably of greatest interest here were the observations of the final speaker, Frank Hall, senior vice president of Hoag Memorial Hospital Presbyterian, who predicted a trend away from special events.

Those involved in doling corporate dollars to charity in Los Angeles, Hall said, “are already banding together to try to protect themselves from the kind of blackmail that goes on behind many of the special events. In fact, many corporations are passing policies that specifically prevent attendance at, or purchase of tickets to, any special event.

“What I mean by blackmail--I probably shouldn’t use that word--is peer pressure.�

Hall cited the honorary dinner as an example.

“What they do is select an honoree who has a lot of markers to collect,� he explained. “Then they announce they’re going to honor this person, go to everybody in the business community and say we’re going to honor this person so you’d better buy a table.

“There are firms that do nothing else but put on those events using peer pressure to sell tickets. People are getting tired of it.�

What’s been lost, Hall reflected, is “philanthropic intent�--an honest and sincere desire to solve a social problem.

“I’m talking about society-type special events, black-tie dinners--I bet you can go to one every night in Orange County. Everybody does (special events) because they’re so visible. Perhaps the media are partially responsible for that--they tend to cover society events. It takes an Arnold Beckman giving $40 million to the Academy of Sciences to make the front page, whereas our local charity ball can get us on the front page of the (life-style) section.

‘Overhead Is Severe’

“And because they’re so visible, people think special events are the way to raise money. In fact, the overhead is severe. It’s the most expensive way to raise money.�

There has been talk around the county of late about passing an ordinance requiring charitable organizations to net a certain minimum percentage of proceeds.

Such is the case in Los Angeles, where the general inefficiency of special events is, in a sense, officially recognized: For an overall annual fund-raising program, according to Shirley Flucus of the Los Angeles Department of Social Services, guidelines suggest that fund-raising costs be less than 20% of total charity dollars raised; for individual special events, 50% is acceptable.

However, 96% of the fund-raising executives surveyed by the chapter are directly involved in such special events, inefficient or not. Hall, for example, oversees Hoag Hospital’s upcoming Christmas Carol Ball (Saturday night at the Newport Marriott). He said he worked against regulating permits (such as are required in Los Angeles) in Orange County six years ago.

Added Paper Work

“What we don’t need (in Orange County) is added paper work, added red tape, added regulation,� he said. “Every time you have regulation you have a bureaucrat to administer it, filing fees, a commission, applications for approval. . . .

“What we need is education and self-policing, so that board members of charitable organizations will say, ‘Hey, wait a minute, how can we do this event if we’re not going to net 50% of the gross?’

“Meanwhile, most of us comply with the 50%.�

But in the long run all that may be of little importance: Hall believes that the trend will be toward electronic fund raising, such as Jerry Lewis’ telethon for muscular dystrophy or the Osmond Brothers’ for Childrens Hospital, which he says have proven more cost-efficient than either special events or mass mailings.

“A couple of years ago, it was reported that there was a 7% increase in philanthropy in the U. S.,� Hall recalled. “That was the good news. The bad news for us in this room was that the vast majority of it went to TV preachers, people using cable television to raise massive amounts of money from the public.

Use Electronic Media

“Now there are two things we can do about that: We can complain or we can learn a lesson from them and begin to use the electronic media as they do--to raise funds.�

Earlier, Johnson warned that if the fund-raising executives don’t do their job, others more mercenary will do it for them.

“Let me tell you about one tragedy--and I hope the person isn’t here--about a small (charitable organization) in Orange County,� Johnson said. “They were approached by a profit-making group (of telephone solicitors) in Santa Ana, who then set up a ‘boiler room’ (a roomful of same) and raised $178,000.

“Well, this little charity got $17,000 out of the deal. And you know what they said? Now here’s the tragic part of it: ‘Nobody else was giving us $17,000 . . . . ‘

“I hope that’s not a trend.�