When planning a major fundraiser such as a dinner gala, it’s easy to get swept up in the “fun” factors such as venue, menu, and entertainment. In retrospect, these are important, as you want your guests to enjoy their time in hopes to affirm their connection to your organization. The more fun, the more likely they are to come back, and potentially bring new guests with them.
However, it’s important not to lose sight of the goal of the fundraiser: raising money. To help ensure that you will have a profitable fundraiser, it’s important to pay attention to numbers throughout the planning process. It may even come down to substituting what you initially wanted with something more affordable.
Set Goals First
When you begin planning your event, start with a total fundraising goal. This should include funds received from event attendees, sponsors, and any pre-gala solicitations.
Your financial objective should be realistic, based on your non-profit’s experience with previous fundraising events. But consider a stretch goal — say from 5% to 20% more than last year’s big fundraiser.
Estimate Expenses
Estimate expenses for items such as:
- Facility rental
- Food and beverages
- Prizes and decorations
- Invitations and publicity
- Outside event coordination
- Speaker and entertainment fees
- Special event insurance coverage
- Permits (for example, to charge sales tax or host a raffle)
Examine your list closely for expenses that can either be eliminated or reduced. If, in the past, you held your annual event at a luxury hotel, you might want to try a new venue that will discount the space for the opportunity to host your community’s leaders. Even if you receive discounts, be sure to include the original expenses in your budget should you need to pay the full amount for a future event.
Seek Sponsors
Good sponsors are critical. Not only can they help defray expenses with donations of goods and services, but they can also raise your non-profit’s profile by introducing your name to a new audience. Be careful, however, not to promise too much in sponsor benefits, such as free advertising — it could lead to unrelated business income tax problems.
In general, quality is more important than quantity. Target well-known names with a connection to your non-profit. For example, children’s apparel companies may make ideal sponsors for a K-12 education non-profit. A successful business book author might be a great fit for a trade association meeting. Board members can be particularly helpful in finding sponsors by working their connections.
30% Rule
Obviously, you don’t want your fundraiser coming off as “cheap,” and sometimes it’s necessary to spend money to make it. Just keep in mind a long-held rule that says fundraising events shouldn’t cost more than 30% of net proceeds. For help making an efficient event budget and other revenue-raising ideas, contact us.
