Assessing Your Costs
In the ideal fundraising scenario, there would be no costs — everything you need would be donated or sponsored. While this can occur in some cases (usually smaller activities or events), it is likely you will need to spend money to make money. Whether that means buying refreshments, hiring a professional auctioneer, or catering a dinner, you will need to determine the amount of money your organization can put up as seed money, or what percentage of the proceeds from ticket sales can go to planning and running the fundraiser.
Raising money is a costly endeavor. Don't forget to maintain your base of past supporters, or your fundraising efforts may wind up suffering. One study showed charities may lose more than half their revenues from “downgraded and lapsed donors.”
Some of your expenses may include:
Site rental, including not only the facility, but also maintenance and security personnel
Food and refreshments, including servers and bartenders
Promotion and advertising, which may include printing, mailing, email blasts, and website costs
Travel and lodging for special out-of-town guests
Microphones, speakers, and A/V equipment
Special personnel such as musical performers, an auctioneer, a golf instructor, or a casino dealer
Items to be sold (don't forget shipping costs)
Telephone bills, including internal calls between committees as well as calls to prospective donors
Miscellaneous items, from paper clips to raffle prizes
These are just some of the things that will cost you money and reduce your revenue. The more you can get donated or sponsored, the greater the revenue available to benefit your cause.
The trick is to make sure you have budgeted enough for each item that will not be donated. Also allow for the likelihood of unanticipated expenses, which will inevitably occur. Try to get as many goods and services donated as possible. These contributions will go a long way in paring down expenses and supporting your cause in the long run.
