What is keeping you away from turning a startup into a million-dollar business?
When all you need is a successful fundraiser to boost your business. Believe me, if you are one of those who think collecting funds isn’t important, then you need to know this fact.
According to a recent survey, 39% of startups shut down due to a lack of funds. So, one may wonder how to plan a successful fundraiser event.
If yes, then knowing the cost to organise one is important. So, let’s start!
WHAT ARE THE COMMON FUNDRAISING WAYS
To understand fundraising better, let’s first know some common methods to do so. These strategies of funds appeal differ in every region. Still, the most common ones are the following:
| DIRECT MAIL | ONLINE FUNDRAISING | EVENTS |
| Sending direct mails/postcards to potential donors. Or meeting with donors one-on-one. | Pitching potential investors or donors through online platforms. Some common examples of this method are: Email campaigns Crowdfunding platforms. | It’s a common pledge drive with the highest ROI. The examples are: Galas Charity events. (For NGOs) |
| This method is a little expensive. As you have to speak to every donor separately. | Not a very costly method. Also, it does not have a high ROI. | Fundraising events offer a good turnover rate. Hence, people prefer them. |
| This way costs you for: Staff with training. Online transfer fees Travelling expenses. | You need to cover the following: Transfer fees Subscriptions Campaigns fees Staff wages. | Events will cost you the following: Venue Event production Transfer fees & hosting staff. |
Each one of the above has its own pros and cons. So, it is friendly advice to choose one that fits your budget and helps you reach your goals.
UNDERSTANDING in literal terms, these are the costs that organisations face during fundraising events. To understand these costs better, we divide them into two categories: direct and indirect.
DIRECT COST
Those costs directly related to any fund activities are:
- Venue Rental For Events: The cost of renting an event.
- Printing And Promotions: Printing brochures, flyers, or cards.
- Refreshments: Paying for the Beverages.
- Processing Fees: Online donation transfer fees, etc.
Yet, they can all be reduced if you hire an event production company.
INDIRECT COST
These costs are not directly related to the event to raise funds. However, these indirect costs support operations. Hence, they are important! Some of the most common ones are the following:
- Salaries of staff
- Overhead costs
- Rent of leases
- Administrative costs, etc.
IMPORTANCE OF BUDGETING FUNDRAISING COSTS
To budget your event, always start by analysing and tracking your business funds. This will help you gain valuable insights into how much money you can allocate for the purpose. Furthermore, it helps you plan for future events too.
For instance, you can identify gaps and make decisions based on insight. Moreover, checking costs also provides information on the return on investment (ROI).
Budgeting is an important aspect of a rich fundraiser as a rule of thumb. This helps allocate resources and optimise efforts toward a greater ROI. In short, budgeting boosts the impact of your strategies. Here is a step-by-step guide on budgeting:
SETTING CLEAR GOALS
Before starting any fundraising event, it is crucial to answer the following questions:
- Purpose of Funds: What are your goals for raising money?
- Amount to Raise: How much funds do you want?
- Timeline: What is the time duration to get funds?
Note: Setting realistic and measurable goals for your pledge drive is vital. They will help you craft a narrative that appeals to investors. Also, deciding the type of funding will help you narrow down your target audience. Thus, this approach helps you strategize better and achieve more.
ESTIMATING COSTS OF THE INVESTMENT ACTIVITIES
Draft a detailed budget that estimates all costs of the event. It should include all direct and indirect costs, from marketing to overhead costs. Furthermore, break down costs into different categories:
Event Costs: Venue rental, catering, LED video screens, decorations, etc.
Marketing Costs: Printing Flyers, social media campaigns, ads, PRs, etc.
Staff: Salaries, training, etc.
Technology: Online platform fees, payment processing software subscriptions, etc.
By breaking them down, you will get a clearer picture of the total cost.
DRAFTING A COMPLETE BUDGET
With all estimated costs in hand, draft a complete budget. A budget that outlines all expenses and guesses capital raise. Further, it should include the following:
Income: Estimating revenue from each fundraising activity.
Expenses: List all the expenses.
Net Income: Average gain, omitting all costs.
STRATEGIES FOR MINIMISING COSTS OF FUNDRAISE
The goal here is to shrink expenses and raise funds. This is one of the most crucial steps to take when you are planning a fundraiser event. The following helpful approach help you achieve your goals:
CONDUCT AN AUDIT
Assess all your current direct and indirect costs of the event to raise funds. Conduct a thorough audit of the past and ongoing current payouts. It will help you minimise the costs where they can be, without any loss.
Further, auditing all past costs of raising money will help you plan the highest ROI event.
TRACK AND ADJUST COSTS
To ensure the smallest charges, track them and ensure they lie within budget limits. Moreover, try the following tips:
Budgeting Tools: You may create an Excel sheet and track expenses.
Set up Regular Evaluation: Schedule meetings and compare expenses with the budget.
Document Everything: Keep recipients, and do not forget to keep records. It will maintain your clarity and liability.
MAXIMISING THE EFFICIENCY
Enhancing event success is crucial for all organisations, especially for non-profit ones. As they solely rely on it! To ensure you achieve your goals, follow these tips:
INVEST IN STAFF TRAINING
Staff training is vital to improve the success rate. Ensure your staff is up to date about planning, best practices, and the latest technology. Always try your best to stay within budget limits.
LEVERAGE TECHNOLOGY
Utilise technology to simplify all work! From planning to marketing to operations, use modern and reliable solutions. Like making use of LED video walls, AV hire, etc.
CHECK RETURN OVER INVESTMENT (ROI)
Studying the ROI for activities is as important as planning one! To evaluate the ROI, use this formula:
ROI = Net Income / Total Expenses x 100
This can help you choose the best fundraising activity that brings the highest ROI.
CALCULATE COST PER DOLLAR RAISE (CPDR)
CPDR is another term for the efficiency of the pledge drives. It is a common term that actually gives an idea of the cost of raising money. Even nonprofit organisations can also get a guess of CPDR. Also, it will help them utilise their resources in a proper manner.
CPDR = TOTAL FUNDRAISING COST / TOTAL FUNDS RAISES
For example, if you are raising £12000 in the event and the total cost is £3000. Then, the CPDR will be:
3000/ 12000 = £0.25
It means 25 cents is the cost of raising every pound of your firm.
CONCLUSION
The importance of cutting fundraising expenses is as clear as the raising money itself. It requires careful planning, calculated budgeting, and daily checks. By grasping expenses and planning carefully, you can meet all your goals. Further, even exceed expected turnovers! Remember that:
“Every Pound You Save And Earn Brings You One Step Closer To Your Mission.”
