Since you are probably working with a group of students or a music-minded community that needs to raise money for equipment or a trip you all are taking - a group event is the best way to go to fundraise. It allows you to entertain others and show off your group's skills. I think most people are more likely to pay for an event to be entertained, rather than pay for a raffle or t-shirt that they've done many times before.
Creative events for you to put on is right ahead....we've done all the work for you!
Murder Mystery with Live Jazz Music: My friends are putting on a murder mystery party and I think it's a great way to entertain people through a story with twists and turns for excitement. To show off your group's music skills, have live music playing in the background as the game starts and everyone is arriving. It will have a sudden Great Gatsby theme to it that people will enjoy. As the game progresses and the host announces new developments, you could create the iconic "da, da, daaaaa" with your group either through instruments or a capella. I think it could create a fun twist on an old favorite. Depending on the size of the event and your group, you could have multiple murder mysteries happening in various rooms too.
Outdoor Concert and Color Run: I know color runs have been done before, but communities really seem to enjoy it. Especially if you're at a high school or middle school, the students love any chance they can to post on instagram of their shirt covered in dye as they're running towards the finish line. You can couple it with an outdoor concert right after so they can hydrate, eat, and listen to music. This could be especially fun as a kick-off event towards the beginning of a school year or in the summer time if it's a community music group.
Dinner and a Play/Musical: Why not combine the age-old dinner fundraiser with a play/musical that your group puts on? You could partner with a local business or the culinary students at your school to get a discount on food. For the play/musical you could partner with the theater department, or provide funny one act performances with your students performing well-known theme songs. The theme songs could work for a band or choir.
Paint Night with Musical Interludes: Most people like soft music in the background while they paint. Sip and paint nights are really popular right now. Why not setup a paint night (maybe even ask a local art teacher to come in and direct the class) and setup times when the paint class is serenaded as they paint. You could also have your musicians playing or singing in the background the whole night. It just depends on how involved the class is for the participants.
It's always great to partner with people in these endeavors so that you realize you can't do this alone and that people genuinely want to help you reach your fundraising goals. Good luck fundraising! It won't be as bad as you think.
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