For any virtual fundraiser to be a success, you need adequate planning. And budgets are integral to the entire process of planning. Since online fundraising is a relatively new concept, you may be seeking some clarity or more information on how to get started.
In this article, you will learn why budgeting is important and discover how to budget for your virtual fundraiser.
What to include while budgeting for an online fundraiser
Ideally, you want your budget to show your projected expenses and income—these are the main components of any budget. So, as you might have guessed, creating a budget is a task that requires a lot of data to ensure the projections are as accurate as possible.
The best part is that if you have been operating as a nonprofit or a charity for a few years, you probably already have most of the data you need to make a good budget. It’s a good idea to involve as many people as possible during the budgeting process. The marketing department, for example, will help you estimate marketing costs.
The importance of budgeting for a fundraising event
Considering that most nonprofits already work with limited resources, you might wonder why take out the time to create a budget. Why not use that time on a task like soliciting donations via phone? Here are some of the reasons why you should never skip budgeting:
1. Promotes accountability
Every budget shows how money will be spent. This is good for transparency and accountability. Most stakeholders, especially donors, are interested in knowing how their money is being used. A budget will help showcase category spends.
2. Keeps things in control
Once an event is in progress, it’s not easy to control spending. But when you have a budget, you will always know when you are about to overspend, thus helping you control expenses in time. This means you can run the entire event without the risk of going beyond your budget.
3. Allows for efficient allocation of resources
Every nonprofit wants to host a virtual event that is grand. But can you afford it? A budget will help you answer this question. For instance, you may want to promote the event on television. But after reviewing your budget, you may realize you don’t have enough funds. This ensures you are allocating your resources wisely.
When is the best time to budget for a fundraiser?
Budgeting for an online fundraising event can take time. For the most part, this is related to all the information you need to gather to create an accurate budget. It includes the time required to interview people and conduct research.
And then there is collaboration—with managers, board members and various departments, who may want to add their opinion to the budget. All this takes time.
So it’s best to start budgeting as early as possible—ideally, from the moment you decide to host a virtual fundraiser. The budget will show you what kind of event you can afford before you go deeper with planning.
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6 tips to help you with budgeting for your virtual fundraiser
While there is no one-size-fits-all approach to budgeting, having some structure will make it quick, easy, and ensure you don’t leave out anything important. So here are some important tips to remember:
1. List all estimated event expenses
This is one of the most important parts of your budget. Before you can get your budget approved, you need to provide an estimate of how much it will cost to host the event. So start by listing out all the potential expense categories including the dollar amounts of each category and calculate the total at the end.
The categories you’ll come up with will depend on the type of virtual fundraiser you are hosting. But here are some ideas:
- Software: You may need to pay for software or the technology platform to help with registration, ticketing, running online raffles/lottery, hosting files, etc.
- Marketing: If people won’t know about your event, don’t expect much. So marketing is one of the most important cost categories. Figuring out the marketing channels to use will help you arrive at an estimate.
- Web development: You may need to hire developers to help with landing pages and other related activities.
- Staff costs: Some of your staff who will take part in the event will also need to be paid.
- Miscellaneous expenses: Even with as much planning as possible, there will still be some expenses that you won’t budget for but are bound to crop up. Make sure you plan for these as well.
2. Determine your projected income and revenue sources
Since the whole point of any fundraising event is to raise money, it’s only natural that you should also budget for how much you plan to raise and its corresponding sources. Not only will this allow you to know when you have met your goal, but you will also determine what activities need to be done to meet the goal.
Looking at what other nonprofits have raised doing the same event or your past performance from similar events will give you an idea of how much income to expect.
Also, consider all the forms of income streams you will use. Most virtual fundraising events offer multiple options. For example, if hosting a virtual dinner, you may also have a 50/50 raffle or any other online-based charitable game. You may also sell tickets for people to attend. And during the event, you might as well ask for donations from the attendees. Other ways to make money are by selling merchandise, getting a sponsor, and conducting an auction.
3. Get the right technology platform and/or partner
Depending on whether you are new to the world of online fundraising or have run a few virtual fundraisers before, you can choose to:
- Opt for a technology supplier (who will only implement the platform); OR
- Partner with a solutions provider, like Ascend, who can help with full-lifecycle service offerings (such as marketing, promotions, licensing, analytics, and much more) and end-to-end program execution for online raffles and sweepstakes.
4. Maximize social media for outreach
Do you know that social media drives considerable traffic to most of the fundraising pages online? This is why you need to make sure that you don’t ignore it.
Remember that at the heart of every successful social media strategy, there is great content. Also, you need to post regularly. The recommendation is one post per day—this is enough to increase engagement, but not too much to feel spammy. And try different content types—you may do videos, image posts, etc.
5. Use analytics to inform decisions
It’s unwise to start an event without knowing what metrics you should be hitting. So, as you create your budget, make sure you include the metrics you should be on the lookout for. These will help you monitor the success of your activities and flag events where remedial action is necessary:
- Fundraising Return on Investment (ROI): This is a measure of how much it costs you to raise money. Ideally, you want to spend less than the amount you raise.
- Conversion Rate: This tells you how many people are following through with your goal. For example, if the goal is to get them to donate, how many people are donating after getting on the donate page. The higher the conversion rate, the better.
- Click-through Rate (CTR): This is a measure of how many people click the link in your email after opening it. This link will ideally point to your fundraising page. Again, higher CTR is always good.
- Average Gift Size: This is your total revenue collected divided by the number of donations. This gives you the average each donor has given.
- Abandonment Rate: Some people will start the process of signing up for your event or donating and then not get to the end. This is called abandonment. And you need to know the percentage and ensure that you keep it low. A higher abandonment rate might be because of a confusing process, software not working right, or you may be asking for a lot of information.
6. Consider free assistance
It’s common for nonprofits to think that they need to pay for everything. But remember that there are lots of volunteers ready to help if you ask. This will mean not needing to use most of your staff, thereby lowering your expenses. Skilled volunteers can help with tasks such as web development, graphic design or email outreach. They can also help with sharing your marketing messages with their friends and family.
We hope that these tips will help you get started with creating a solid budget for your virtual fundraiser. Remember that any budget gets better with editing. So, after you create your first draft, be sure to go back and revise as necessary. And after you get feedback from different stakeholders, edit it again. Remember, a good budget is not set in stone.