Preparing a budget for special fundraising events helps nonprofits avoid overspending, especially if their event does not raise an amount equal to or greater than its fundraising goal.
The Importance of Setting a Large Enough Fundraising Goal
When making plans for your nonprofit’s next fundraiser, it’s important to set an appropriate amount as your fundraising goal. This goal should be realistic; it should be an amount that your nonprofit can reasonably expect to raise during the event.
Your fundraising goal should also be for an amount that is large enough to cover all of the costs and expenses associated with the event. In addition to this amount, you will want to add a net sum that is left over after all of the costs are paid. This net sum should be large enough that it justifies the time and effort that is put into hosting the event.
The Importance of Creating a Detailed Budget Specifically for the Event
You should create a separate, completed budget that lists each expense that will arise as a result of hosting the event. This list should be thorough, and highly detailed to help you avoid under budgeting.
When creating your budget, look at the history of past, similar fundraising events held by your nonprofit. Look at the types of costs that were incurred, as well as the amounts that you have raised during these events. Can your nonprofit reasonably expect to spend a similar amount, or, have costs increased in one or more categories? Determining the answers to these questions can help you avoid underestimating the actual expenditure.
At the very least, your budget should include the cost to rent the venue for the event, as well as unique items related to the location. For example, will your nonprofit need to rent extra tables and seats or other items and equipment to hold the event at the designated location? Be certain to include realistic estimates for these items in your budget.
Catering, staffing, creating and sending invitations, security, transportation, VIP accommodations, entertainment, ticketing, fundraising software, marketing materials, promotional and gift items/event swag are all typical expenses associated with special fundraising events, so be certain that you include these and any other costs in your budget.
Don’t Forget to Plan for the Unexpected and Include it in Your Budget
It’s also a good idea to include a built-in “cushion” in your budget to help your nonprofit be able to cover the cost of unforeseen events to help you make certain that your nonprofit has enough funds to cover the cost of the event.
Use Caution When Attempting to Cut Costs
Many nonprofits are still feeling the pinch from the global economic downturn of a few years ago, and remain short of funding, especially given the resulting cuts in Federal monies in the form of grants that many nonprofits relied upon. If your nonprofit is struggling financially, it can be tempting to cut corners to reduce spending. While reining in expenses is important, it’s equally important to avoid cutting quality.
For example, you don’t want to skimp and not spend enough on marketing, and word fails to get out about your event. You also want to make certain that you choose reliable vendors for the venue, catering, and so on. Just because one vendor offers a lower price, doesn’t mean that you can depend on them to deliver on time. Make certain that you still check references and look at past histories in addition to price when comparing services and creating your budget.
Accurately budgeting for your special event is an important part of ensuring your nonprofit’s financial stability. Don’t forget the traditional fundraising metrics such as net revenues and costs to raise when hosting your event, and preserve this information to help you more accurately forecast the budget for your nonprofit’s next special event.