Event Budgeting for Nonprofits: Success Strategies

     Whether it’s a fundraising event or a program activity, when it comes to planning events, I can truly say, the devil is in the details. I've seen event budgets hijack so many nonprofits by creating tremendous conflict. So today, I want to share some success stories, opportunities, and strategies for how to manage your events effectively. 

Systematize the nonprofit event planning process

     First things first- before you begin planning any kind of nonprofit event, I want to encourage you to systematize the planning process! Create a general template or form that will guide you through the process. For the purposes of our illustration today, I’ve pulled the following example off the internet, through a simple google search for “event budget with income.” 

Consider your funding sources

     One of the most common event planning pitfalls I see is the failure to fully consider the income sources for a nonprofit event. For instance, the above example incorporates entry fees and ticket sales per person.  There’s also a category for “other income” which may represent a budget that's been set aside to help cover the cost of an event.

Set reasonable participation expectations

     When calculating your projected income, it’s so important to set reasonable expectations. One of the most common pitfalls on the income side of the event planning process is assuming more participation than reasonable. So, if you're saying entry fees are going to be a certain amount or that you expect a certain number of people to sign up and pay a fee, what do you have to base that on? Is it based on historical events or Is this a first year event? How many people do you have on your mailing list? What if only 25%, 20%, or 15% participated? You’ll need to be reasonable in your income assumptions and objectively evaluate your own rationale. One additional step I recommend that is missing from the example form above is to clearly state your income assumptions and rationale. How did you arrive at your income projection? For example, “Entry Fees: 100 people x $10/pp = $1,000”

Group similar expenses together

     Next, let’s look at the expense side of the event planning process. As you can see here, they've done a great job grouping similar types of expenses together, like  “site expenses”  or costs associated with an event venue or location. Other potential expense categories may include food, entertainment, or decor costs. How you lay out your event planning template is a matter of preference, but the purpose behind the form and process is ultimately to help you take the time to thoroughly consider and plan your events with greater accuracy and fewer unknowns. Remember to list all your income and expense assumptions, but more importantly,  to evaluate how you arrived at these assumptions.

Distinguish between variable and fixed expenses

     Another common pitfall of nonprofit event budgeting is simply failing to distinguish between variable expenses and fixed expenses. For example, if you're taking a group of kids to a camp and you're renting a bus, the bus may transport 45 kids. Well, once you’ve registered 50 kids, you’ve tipped the scales to needing a second bus and yet you haven't filled up that second bus. In this case, transportation is actually a fixed cost that varies at a certain registration level of 45 or 50 kids. This is different from a truly variable cost, such as the cost to feed kids who attend camp, in which case, the food cost increases uniformly with each additional participant, rather than doubling at a certain break point.  

Don’t forget the post-event debrief

     These are just some of the most common event considerations that I've seen impact nonprofit event budgets. I hope they're helpful to you. I would absolutely recommend that you create a form in whatever format works best for your organization. But even more importantly, I urge you to also prioritize the post-event follow up or the debrief process! This post-event analysis is also a critical step where you actually compare those budgeted assumptions to the reality of the actual results. Hopefully your accounting staff can help you produce those analysis and provide that information as a retrospective tool when planning for next year in case you're doing the event again. 

     I hope this has been helpful, and as always, I love sharing my strategic tips with you here to help you master money matters in your own organization. Click here to subscribe to more weekly blog tips or click here to find my video library on Youtube.