Many not-for-profits depend on funds raised at an annual gala or other special event to keep their organization in the black. But successful events require a careful balancing act. You need to keep a tight rein on expenses, yet attract and entertain generous supporters. Here are some ideas for maximizing revenues.
Sometimes you have to spend money to make money. However, a long-held rule of thumb among nonprofits says that the cost of a fundraising event shouldn’t exceed 30% of net proceeds. To ensure you’ll stay on — or under — budget, prepare financial projections.
Start with your total fundraising goal, which should include funds received from event attendees, sponsors and possibly 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.
Next, estimate expenses for such items as:
- Facility rental,
- Food and beverages,
- Invitations and decorations,
- Speaker and entertainment fees and guest stipends,
- Permits (for example, to charge sales tax or host a raffle),
- Prizes, awards and incentives,
- Special event insurance coverage.
Look for expenses that you can either eliminate or cut. 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.
Finally, don’t be afraid to try something different. If you usually host a black-tie affair, consider holding a cocktail party this year. As long as the event is well planned and publicized — not to mention, fun — attendees will probably be just as generous.
Keep your focus
Depending on your nonprofit, mission and support base, you may be able to “break” certain rules, such as the 30% expense metric. However, all organizations should remain focused on the fact that special events are, first and foremost, about raising — not spending — money. Contact us for more information.