It’s been a long two years. But many not-for-profits are starting to plan in-person galas and other special events for this coming summer and autumn. If your organization is trying to get back to “normal” with a face-to-face fundraiser, understand that it’s likely to be more challenging to plan than in the past.
Some of your usual supporters may no longer be able to help financially — or may have relocated and, thus, be unable to attend your fundraiser. Some goods are still in short supply, and almost everything costs more than it did two years ago. More than ever, you need to pay close attention to the numbers to help ensure your event is profitable.
Ambitious but realistic goals
Start planning your event with a total fundraising goal. This should include funds received from event attendees, sponsors and any pre-gala appeals. Your financial objective should be realistic, based on your nonprofit’s experience with previous fundraising events and accounting for new factors, such as high inflation. But consider a stretch goal — say from 5% to 20% more than your last event.
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.
A chance to try new things
Look closely at your list for expenses that can either be eliminated or cut back. 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 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 used to hold a black-tie affair, consider planning a more casual event this year. Some attendees may feel more comfortable attending an after-work 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 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.
It’s possible that a former sponsor or two went out of business during the pandemic. As you look for new sponsors, target well-known names with a connection to your nonprofit. For example, a children’s apparel company makes an ideal sponsor for a K-12 education nonprofit.
Be careful
Don’t be surprised if you encounter a few obstacles in planning this year’s event — especially if you’re trying to organize it with a diminished staff or fewer volunteers. Above all, watch your expenses. The last thing you want is to spend hours of effort on your fundraiser, only to come out even, or even lose money.
How HoganTaylor Can Help
The HoganTaylor Nonprofit team of business advisors and CPAs is comprised of former CFOs, controllers, and industry experts with extensive experience providing the guidance organizations need to lean forward again in their leadership. If you have any questions about this content, or if you would like more information about HoganTaylor’s Nonprofit practice, please contact Jack Murray, CPA, Nonprofit Practice Lead.
INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.
