As in the for-profit world, sometimes not-for-profits need to spend money to make money. This is particularly true when it comes to fundraisers. At the same time, you need to resist the temptation to overspend or your special event may not raise the amount you were hoping for. Here’s how to stay on budget.
Focus on your goal
Start with your total fundraising goal, which should include funds received from event attendees, sponsors and any pre-event appeals. Your financial objective should be realistic, based on your nonprofit’s experience with previous fundraising events. But consider a stretch goal, say from 5% to 20% higher than last year, to energize staff and motivate supporters.
Then, estimate expenses for such items as facility rental, food and beverages, prizes, invitations and decorations, and speaker and entertainment fees. You may also need to pay for permits — for example, to charge sales tax or host a raffle — and might want to buy special event insurance coverage.
Look closely at your list for expenses that can either be eliminated or cut. Say that you held last year’s event at a luxury hotel. This year you might consider a new venue that’s willing to discount the space for the opportunity to host your community’s movers and shakers. Even if you receive sponsorships and discounts, be sure to include the original expenses in your budget should you need to pay the full amount for a future event.
And don’t be afraid to try something different. If you usually host a black-tie affair with a multicourse meal, consider holding a more casual event this year, such as a cocktail party with a silent auction. As long as the event is well planned and publicized, attendees will probably be just as generous.
Importance of sponsors
Good sponsors are critical. Not only can they help defray expenses with donations of goods and services, but they can also raise your nonprofit’s profile by introducing your name and mission to a new audience. But be careful not to promise too much in sponsor benefits, such as free advertising or endorsements of the sponsor’s products — it could lead to unrelated business income tax problems.
Target well-known names with a connection to your nonprofit. For example, a pet food company makes an ideal sponsor for an animal welfare charity. A successful self-empowerment author might be a great fit for an association meeting of salespeople.
As you plan your special event, the most important thing is to keep a laser focus on costs. Although you want your fundraiser to be fun and memorable, the real purpose of the event is to raise money. And you probably won’t do that if you lose track of expenses.
Manage Expenses in Real Time
Track income and expenses in real time to know where your organization stands in meeting its fundraising goals and staying within budget. If you can’t do this quickly with an accounting system that requires many manual processes and drains your resources, it’s time to consider moving to a modern accounting system. Contact Cordia Partners, the systems optimization experts, to get you started.