The Perils and Pitfalls of Nonprofit Holiday Parties

Reindeer ornament hanging precariously from a piece of twine wrapped around a holiday wreath.

It’s no secret that the finances of nonprofit organizations often come under intense scrutiny from potential donors. When a donor is considering contributing to your organization, they want to be sure that their money will be used wisely. Unfortunately, as the ongoing debate about overhead costs demonstrates, expenses that are necessary to the productivity and longevity of your organization can sometimes been perceived as frivolous or nonessential by donors.

Holiday parties are one of those expenses that should be approached carefully by your organization. While you might think it’s a great idea to reward your hard-working staff with a festive celebration, it’s also something that could raise a potential red flag with donors. No one wants to think their money is being spent on wild office parties. (Even if that “wild” party is really just a low-key get-together.)

So how can you reward your employees while still maintaining responsibility to your donors? First of all, if a holiday party really isn’t in the cards, your staff will understand. Nonprofit employees work long, hard hours because they believe in the organization’s mission - not because they’re expecting a big party at the end of the year. Think about free or low-cost options for showing your gratitude, like an office potluck or thoughtful hand-written cards for each of your staff.

Or perhaps you could invite board members, donors, and volunteers to your party, to say “Thank you” to not only staff, but to all the other individuals who make your mission possible? You could even make it a fundraising event. But keep it simple - you don’t want this “reward” to turn into even more work for your staff.

Another option is to make your holiday party a productive, team-building mini-retreat. By combining social activities with conversations about the organization’s goals, you might find that you can have fun and improve inter-office communication at the same time.

If you are contemplating a holiday party this year, we encourage you to consult your accountant and open the lines of communication with your board and your donors. There are many financial pitfalls that nonprofits must navigate, and a little holiday fun can easily turn into a big headache if you’re not careful.