By Jerry Bazata, “Money Answer Man”
Many DJ small business owners value the importance of being responsible citizens by supporting nonprofit organizations and community events. Since most of us are not millionaires, simply writing a check is not an option every time an organization comes “knocking at our door” for a donation. We do however have a valuable asset that we can provide – our talent and expertise as a master of ceremony and musical entertainment.
It’s important to balance the feel good aspect of giving with the cost it has on your business. Consider these pros and cons of donating your time and talent:
- You have hard costs associated with performing at the event. The cost can include travel, business insurance, wear and tear on your equipment and laundry. This may be $100 – $200 out of pocket expenses.
- For tax purposes, you can only deduct the actual mileage to and from the event, overnight accommodations and meals. You are not permitted to deduct what you normally charge for a general event as a fee.
- The potential lost revenue because you committed to the event and passed on other events that would have been paid you. DJs sometimes commit months in advance to a gratuitous event during prime seasons, such as a Saturday in June, only to find they had to turn away weddings or proms.
- Donating your DJ services will not automatically generate referral revenue for you. Many of us have the false perception that people attending the event will book us for future events because our time was donated. Veteran Mobile DJs will tell you that less than 1% of non-profit function attendees will book you because you were a good citizen and donated your time.
Case In Point
The greatest risk factor is that you could have been paid for the event but were too quick to donate your time.
Case in point: Over the past six years I have assisted a local nonprofit organization with an event that raised thousands of dollars each year. The first year I donated my services but as the event and the demands on my time grew, I was able to negotiate a fee for my services, which compensated me for travel, meetings, wear and tear on my equipment and preparing for the event (in person meetings and 6–8 hours of prep time).
This year, a young and energetic DJ who was new to the market offered his services gratis to a new member of the planning committee. After much debate, those long-standing committee members who trusted in me were out voted and the organization went to the new DJ. The DJ may or may not have known the organization had paid for service in the past; however what he left on the table was $2,000.00 for his services.
The lesson? Don’t be too quick to donate 100% of your services. A little investigation about a client’s budget just might put some dollars in your pocket for the hard costs you incur.
Just like weddings, proms and mitzvahs that you are paid for, the compensation you receive is not limited to the day of the event, but also includes the hard costs you incur along with you time for preparation and planning.
Plan ahead and allocate how much time you are willing to donate to non-profits. Be willing to negotiate a fee for your time outside of the event. Set a minimum fee for nonprofits to cover the hard costs you incur. If you offer during a prospect meeting to donate back part of your fee, I guarantee you 90% of the time they will book with you. Ask up-front if the organization has a budget for your services, 99% of the time they do and are willing to pay, it may take some negotiation but in the end, both you and the client will benefit from the negotiation.