EP 23: The Bottom Half of Your Event Budget -- Understanding Your Cost Structure

Positioning review: Reframed several prescriptive statements into experiential/descriptive language. Removed direct "you should" directives and replaced with "what tends to work" or softened framing. See Original vs. Revised pairs below.

Original: "you should vet them out and get some opinions from others" --> Revised: "it's worth vetting them out and getting opinions from others"

Original: "you make sure that's working before it gets started you make sure you have a number to call" --> Revised: "it's important to make sure that's working before the event starts and to have a number to call"

Original: "don't assume for a second that you know" --> Revised: "it's easy to assume" (softened)

Intro: Welcome to the Elevate Your Event Podcast, where we talk about how to plan and execute an unforgettable event that will dazzle your guests and generate more income for your organization. From fundraising and securing trendy auction items to event production and logistics, get the best tips and advice from seasoned fundraising and event professionals who have been in your shoes.

Jeff Porter: Welcome back to the Elevate Your Event Podcast, where we talk about all the many ways that you can make your fundraising event better. Today, we're going to actually talk about the bottom half of an event budget called the cost structure. We put together a budget. Everybody talks about how to make more money. Well, there are some things on the cost side that will make you more money, but there are also some things you can consider on the cost side that will just increase profitability. They may not have a direct impact on revenue, but they will definitely have a direct impact on what you take to the bottom line and contribute to the organization. We've got a packed studio here today, and I'm super excited to introduce Kari Porter. Hello.

Jeff Porter: It was not an easy task to get her to join us, but she is an event budget expert. It took a little persuading. It's going to cost me a lot. If you guys are married, you understand what that means. I will have to pay for it later. But we're happy to have Kari on the podcast with us. And we've got Elise Druckenmiller. Say hello, Elise.

Elise Druckenmiller: Hello, Elise.

Jeff Porter: Elise manages our client services division, but she also runs a number of fundraisers. And along with Elise, and one of the fundraisers she runs, we brought in another special guest. He's a return guest. He's the one, if you're looking at ways that you can blow your budget, this is the guy. We talked about this. We're like, hey, we're going to do one on event budgeting. She's like, well, we need to bring in Mike Papi if we're going to talk about ways to blow your event budget. No, we're just picking on you. You got to spend money to make money. That's right. So Mike Papi is back. Mike is the founder and he definitely runs the show at the OneGo Foundation. OneGo does an annual golf tournament and gala. We've attended it for several years, and we've always had conversations with Mike about how to take things to the next level and where to spend money. Your golf tournament, in terms of swag and sponsorship and everything else, is just one of the best that we attend on a yearly basis.

Mike Papi: Thank you.

Jeff Porter: So I know you have a lot to contribute -- not just about how to spend too much money, but also how to be smart about it as well. So let's break this down. We're talking about event budgets. Let's start with the basics, like the venue. Obviously you're picking a venue based on a number of factors. What's available. How big it is. What their terms are. What else would be a factor in how to pick a venue?

Kari Porter: Location. Timing. Time of the year. Weather. Services they provide.

Jeff Porter: So you're looking at all those factors and that's all going to come down to a price. But there's more than just the rental cost, and that's what we were just talking about. Let's talk about picking a venue that allows you to bring in donated alcohol. What's the process for getting the alcohol donated? How hard is it? And what are the challenges and the benefits of doing that? We're going to turn this one over to Kari, because this is her area of expertise.

Kari Porter: Yeah, we ran a Kentucky Derby fundraiser and we've been to many different venues here locally in Colorado. Obviously some are more willing to work with you and easier to work with when it comes to donated alcohol. Some make it really hard for you to get that alcohol. But a lot of it comes down to looking at the local laws and what they require. A lot of them require it come from a distributor with a zero-dollar invoice. It has to be delivered directly. So there are some hoops you have to jump through. Some will charge you a small corkage fee. That's kind of how they get their money back. But in the end, if you can get alcohol donated, it definitely makes your ability to have alcohol included in your ticket prices affordable. And when people drink, they often spend more money, so that's the goal.

Kari Porter: If you're going to a hotel, it's very unlikely that you're going to bring in donated alcohol. So those per-drink costs can get high, especially if you're going to do an open bar. These are all the considerations you take into account. For us, for our Derby fundraiser, when we moved it out of our house -- and we allowed donated alcohol at our home, by the way, we were that generous to ourselves -- but when we moved it out, that was a factor. Do they have a liquor license? Are they going to let us bring in donated alcohol? Because we want to have an open bar.

Jeff Porter: We don't want guests at this type of event -- and I think you would agree with this, Mike, because you're kind of a high-end guy -- paying $7 for a beer after they just spent $500 or $2,000.

Mike Papi: Right. Well, when you set your ticket prices that way too, they know that they're buying a ticket and they're going to get the meal. We can talk about food in a minute. But when they come there and they expect an open bar, that's a huge selling point when they're coming in. They don't want to have to worry about another thing they're paying for because you want them focusing on the fundraiser.

Jeff Porter: So we would look for places that had the ability to let the alcohol be donated.

Kari Porter: Yeah. And there are a few places -- probably becoming fewer -- but some places don't even have a liquor license and they'll let you get your own special events permit. I've applied for those. That makes getting the donated alcohol easier, but most places have some sort of liquor license or they require you to work with one of their vendors.

Mike Papi: And that said, we hold ours at the Hilton Inverness right here in Englewood, and they work with a lot of the vendors that we work with that donate the alcohol. So that makes it easy. When you just say it's at the Inverness, oh, that's easy enough. They've worked with them before. They're probably your second delivery that week for a different event or a wedding or something to that effect. So if you're working on a venue and they allow you to bring in your own alcohol or donated alcohol, and you don't know of somebody that will donate it, you can simply ask their event coordinator who they've worked with in the past, reach out, tell them about your charity, and see if you can get the alcohol donated.

Jeff Porter: That's great, for sure, because the distributors go to certain locations. So the zero-dollar invoice -- what does that mean? They just want to make sure you haven't bought the alcohol at wholesale cost and then had it delivered to the venue.

Kari Porter: So a zero-dollar invoice means that the distributor -- or it can also be the manufacturer, like Coors could donate it -- but then the distributor is the one that has to bring it to the venue. And when they bring it to the venue, they have to show that they are giving this at zero dollars to this organization at your venue.

Jeff Porter: I can't just put on a Coors shirt and hat and show up with it?

Kari Porter: No.

Jeff Porter: Well, we tried that one.

Kari Porter: That's what you do when you're picking up the extra alcohol after the event.

Jeff Porter: Here's the downside though. At venues where you've had the zero-dollar invoice, in some cases, they keep whatever you don't drink. And what a nice bonus to them. Let me get into a side topic here because I'm still bothered by this. When they water down your guests' drinks -- it made me upset because I'm thinking, wait a second, you have plenty of bourbon for mint juleps. Why are you pouring these really weak mint juleps? In my opinion, it's because they want to keep the rest of this bourbon that I got donated, which is really nice.

Kari Porter: That's not everywhere, by the way. Inverness doesn't keep it. They're not allowed to keep it or resell it with that zero-dollar invoice. They need the distributor to come pick it up.

Jeff Porter: Plug for the Hilton Inverness. So anyway, that is important. And again, if you're running a dry event, then just ignore everything we just said. But we always get this question about alcohol, and it's an important one. If you're going to do a cash bar, just decide what kind of event you're having. If you're having a concert and everybody paid $50 to $75 for a ticket with a cash bar, people aren't expecting open bar at that point. But if you're going to have a higher-end event and you're having people buy $1,000 or $2,000 tables -- at our event, we had $5,000 tables -- they're not going to love the idea of paying per drink.

Elise Druckenmiller: Totally. And if you need to compromise, you can do a two-hour happy hour and then it becomes cash bar. Figure out a happy medium where you're not losing money. Or use drink tickets to cap what you're paying out. Or just beer and wine is free and then pay for liquor.

Jeff Porter: Okay, so we've talked about alcohol. Let's dive into food, since it's connected to the venue. And guess what else is connected to the venue? Catering. Because in most cases, the venue either is their own caterer if it's a hotel, or they have a list of approved caterers that they'll work with. Would you say they only work with those, or just recommend them?

Kari Porter: I think it depends. A lot of times it's ones they recommend. If you really had somebody else you wanted to use, some venues might entertain that. But they like working with companies they know have the insurance, know the kitchen, and know how they operate. Usually those lists are pretty extensive though, so there's kind of a price range for everybody.

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Jeff Porter: Thanks for listening, and we hope to see you back on another episode of Elevate Your Event. Until then, happy fundraising.