Charity Navigator, in a study of the special event practices of over 5,000 of the largest American charities, reports that special events are often bad investments. Here are some of the findings from the study:

• The average charity spends $1.33 to raise $1 in special events contributions.
• Compared to overall fundraising efforts, special events are less efficient. Other efforts typically cost just 13 cents to raise one dollar in contributions. Only 15 percent of charities that hold special events are more efficient when using events to raise funds.
• The most inefficient charities when it comes to special events fundraising are those in the health field and those located in the Midwest.
• Religious charities and those located in the Northeast tend to be more efficient, spending $.71 to raise $1.
• About half of all charities use events to fundraise, but many (46%) are reporting the financial information for those events incorrectly.

The report acknowledges that special events often have goals other than just raising funds. They can raise awareness of a charity and play a significant role in cultivating future donors.

More about this report and about cultivating donors:

• 2007 Special Events Study
• Top 10 Tips On the Fine Art of Cultivating Donors