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Just as you thought the multi-level event looked to be the way to go, let's look at some definitive pluses to going the chair/multi-committee route:
1) Since different volunteers are working on different committees, the multi-committee or chairperson event enables you to place volunteers in an area they enjoy working in, an area of natural strength, or an area they're very committed to. When people get to choose what they get to do, they're often more committed.
Have you heard the quote, "People support what they help to create?" That is definitely at play here. If Natalie gets to pick being on the ticket sales committee, she's picked something vs. having it assigned to her.
2) This type of event frequently has multiple streams of revenue, where the revenue at the multi-level event usually comes from the attendees bringing the donations, and possibly some event sponsors. But at a multi-committee event, you've got revenue from people who purchased tickets to the event, revenue from sponsors, revenue from the silent auction, revenue from the live auction, and sometimes even revenue from raffle ticket sales or something else.
Multiple revenue streams mean that if sponsorship sales are going poorly, the whole event isn't necessarily ruined! There's still the silent auction that could go over their goal and help other parts of the event that are weaker in making the overall goal. Also the ticket sales can help to overcompensate for the lack of sponsorships.
3) These large-scale events tend to be quite fancy and there's not usually an issue drawing attendees who want to "see and be seen" at this event bidding on a piece of art or a condo get-away, and these events are usually easily covered by the press. They are also very fun to work on, and since they take a bit longer timeline-wise to implement you really get to know volunteers and tend to build some longer-lasting relationships and true friendships than the quicker events.
Ultimately, it's a decision that has to be made by the boss, the overall committee who's decided to put on a fundraiser, or whomever the decision-maker is. There are pluses and minuses to both; look at your goals and timetable when making a final decision.