How do I create a table of contents with a nested style paragraph?

I'm having difficulty figuring out how to generate my Table of Contents with a nested style. In this screen shot, "SPECIAL EVENTS" is considered level one and the pink circled "Fittest Firm Challenge" is level 2. Because it is a nested style, it is picking up the entire paragraph. I don't want to put in a paragraph break because that would add too much space in the magazine since there are a lot of other listings like this. I've tried reading through other people's discussions but I'm totally lost with the explanations. Is there a simple workaround or solution to this?