Nonprofit special events, whether a black-tie gala, art festival, walk-a-thon, or neighborhood beautification day take time, planning and a budget. But who really owns the nonprofit budgeting process —the finance or development department?
For the finance office, it is as much about cash flow as it is about potential revenue. For the development office, it’s about soliciting underwriters and event sponsors, as well as having the money to secure the various pieces you need prior to the event. For both, it’s about planning.
Usually, things cost more than anticipated, and those sure-bet sponsors choose not to come on board—even though you have given them until the last minute. From event venues to catering, invitations to awards, all pricing varies according to the vendors and the demand. A detailed, comprehensive plan, including various scenarios, options and unexpected or hidden costs, will go a long way in determining the budget as well as the cash flow needs well in advance of the actual event.
In budgeting for an event, it is critical to have all the internal stakeholders, the finance and the development offices, brought together to collaborate on the budget. Some budgeting tips for special events include:
- Review of last year’s event budget, if applicable
- Review of potential sponsors, number of attendees, and other revenue generating opportunities, including a realistic goal of how much money is to be raised from the event (HINT: Be conservative – sometimes the best laid plans fail because of influences that are outside of the organization’s control.)
- Review of anticipated costs associated with the event (HINT: Budget liberally – again, unplanned costs do arise, and sometimes changes need to be made that incur increased expense. When a planned expense is donated as in-kind, you can celebrate and put the allocated monies to the bottom line.)
- Timing of payment for various vendors prior to and following the event
- Expectation of revenue pre-event, event, and post-event
- Determination of how the finance and development teams will communicate budget details and updates as well as manage this information.
Intuitively, both the finance and development offices need to track and record the financial details of the event. With fund accounting and fundraising systems that work together, information can be shared between the systems without the need for manual reconciliation. Flexibility within those systems allows you to customize fields specifically for the way your organization manages the event, and allows for comprehensive reporting once the event has taken place. With options for fund accounting Executive View Licensing, the financial office and the development office can collaborate real-time within the same financial budget, and update those shared budgets as expenses or revenue details change.
We hope these budgeting tips help your future special events go as smoothly as possible. Additionally, if you are interested in professional advice and assistance we offer multiple services to fill the gap between where you are and where you need to be with your financial accounting and back office processes.