Event fundraisers can provide many opportunities for nonprofit organizations; the most important of course is raising money. But there is one thing that can make or break your fundraiser and I learned this lesson the hard way.
I was planning an annual run that was in its sixth year. There was a lot of “this is what we’ve always done” and for the past several years the event had lost money. Gathering all of the historical documents and plans – I jumped right in following the same pattern that everyone else had. Before I started to find sponsors we were way in the red. I’m pretty persistent so I work hard to secure sponsors and raise attendance thereby raising income to offset the expenses. I was keeping a “mental tally” of the expenses and income.
Ecstatic, I asked the CFO to run the reports after the event to confirm everyone had paid and our exact net total. I was shocked to discover the summary report said we netted approximately $3,900. I nearly fell over. WHAT?!! After all that work and raising $10,000 that was our net? Something had gone very wrong.
That afternoon I sat down with my calculator, Excel spreadsheet, and event receipts. I put together the budget to figure out where things went so terribly wrong. It suddenly became crystal clear that my mental tally left out many expenses and all of the last minute “must-haves”. I also noticed all of the things we could have done without or purchased at a better price.
Lesson learned…the hard way.
The event was successful and had the highest attendance ever. Even more exciting, I raised over $10,000!
What if I told you that thousands of organizations are spinning their wheels because they fail to do the ONE thing that makes or breaks a charity event – a pre-anything budget. It’s true. Next time you are at an event run some quick numbers in your head – take a look at who the keynote is, the venue, food, beverage, signage, entertainment, giveaways…all of that equals $$$$$ spent.
Don’t get me wrong, you have to spend money to host an event and if you’d like it to be successful you want to go with the best and biggest options your organization can AFFORD. So what is the one thing that will make or break your event fundraiser? It’s to create a pre-anything budget…and by pre-anything, I mean BEFORE you do anything else. Here’s why:
- Knowing your budget determines your options. It will impact which type of event you have, where you have the event, the format of the event, the guests, if you have food or not, sponsorships offered and on and on.
- Out of the gate you are armed with direction. While this may seem obvious, it makes a big difference when you have a laser focus on the number of sponsors you need to secure or how you set up the sponsorship opportunities. It will save you a lot of time NOT running in a direction that isn’t even feasible.
- Setting expectations. When planning a charity event you must manage the expectations of committees, the board, staff, and volunteers. With tact you will be able to steer clear of grandiose plans from over-eager contributors without going down the dreaded “but it’s perfect” path. Being clear with your team allows for efficient use of meetings, brainstorming sessions, and planning.
- You’ll finish in the black. You may be scratching your head at this point – don’t all fundraisers do just that – raise money? NO! They don’t and many event fundraisers have incredibly disproportionate income to expense ratios. This is a byproduct of doing the budget last to see if “we made any money”. Starting off with a budget allows profit to be the goal before all the contracts are signed and expenses explode out of control.
Now, I always created the budget first. I strive to be in the black before a single ticket/registration/admission is ever sold – I also stick closely to the expense limits which guide my decisions around the event logistics.
It works. Now my goal for any event fundraiser is a 4:1 income to expense ratio. It was tough lesson to learn but doing so has now allowed me to raise over half a million dollars for nonprofits.
How do you approach budgeting for your event fundraiser?
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