Securing fundraising dollars for your nonprofit is an essential responsibility for board members and management alike, but it can be difficult to choose an activity that both makes sense for the organization’s brand and optimizes your return on investment. Oftentimes, when you consider everything you would like your event to achieve, you might find that the initiative that makes the most sense actually goes against the conventional wisdom of putting on an event that boasts lower costs per dollars raised. In fact, there are other important measures of success to consider as well.
Read Also: Unlock Your Nonprofit’s Potential With Donor Data
What to Consider When Selecting Your Event
There are quite a few activities to choose from when it comes to considering the type of fundraising activity that will provide the best return for your nonprofit. Of course the primary goal of the fundraiser is to generate revenue for your organization, but there are other factors to consider along the way, such as whether the activity aligns with your mission statement and will strengthen your nonprofit’s brand and whether it will provide your volunteers with a rewarding experience.
The first step to identifying the right fundraising event for your organization is to identify your primary objective. For example, is the event part of a long-term marketing strategy to raise awareness and educate the public for the purpose of creating lifetime donors or is it a one-time transactional initiative designed to help offset more immediate organizational costs. There may be disagreements among management and board members along the way, but identifying your primary and secondary objectives is the key to ensuring that you get the most value for your nonprofit’s budget.
According to one study, competitive races and/or fun runs/walks oftentimes provide the largest return on investment due to scalability and the power of peer-to-peer fundraising. On the other hand concerts and sporting events require some of the largest upfront costs, making them appropriate for larger nonprofits with more experience. Over the last few years, the five most common events we’ve seen area nonprofits organize have been:
- Dinner fundraisers
- Competitive races
- Golf outings
- Auctions
- Concerts and sporting events
But when it comes to raising funds and generating awareness for their nonprofits, the team driving the organization’s fundraising initiatives is really only limited by the imaginations of its members.
In recent years, we’ve actually seen an increase in donor-initiated activities, particularly among community foundations, which allows individuals to carry out fundraising efforts on behalf of the nonprofit. This tactic can be incredibly effective as it requires little-to-no upfront costs and gives your volunteers the opportunity to be ambassadors for your organization and the causes you support. Furthermore, those simple conversations between volunteers and potential donors they approach can make more of an impact, particularly when it comes to raising awareness, than any large-scale event ever could.
Effective Nonprofits Embrace Technology
Nonprofits have the ability to utilize technology to help lower their fundraising costs. From marketing events and selling tickets and collecting donations to organizing event seating and communicating with attendees, there are so many ways to take advantage of the technological advancements that continue to emerge every day. What’s more, many of these resources are being offered at no cost and will provide you with a variety of data-driven insight. But before you decide to take all of your fundraising efforts online, be sure to pay attention to the legal considerations that are associated with utilizing these solutions. Specifically, those looking to take advantage of technological advancements should be aware that:
Online donation collection must be authorized
As mentioned above, donor-initiated activities can be a powerful way to generate funds, but to be able to promote donations collected via various online platforms as tax-deductible, the 501(c)(3) tax-exempt organization must provide it’s explicit authorization. If authorization is not given, donations may not being tax deductible. Furthermore, unauthorized online campaigns could raise other issues related to unauthorized solicitation activity and violation of trademark rights.
Online threats abound
When utilizing online third-party platforms for fundraising and event planning initiatives, data security is an issue. Therefore, before utilizing any third-party platform, take the time to ensure that proper security protocols have been put in place to protect your donors if a breach were to occur. Additionally, the National Association of State Charity Officials has advised nonprofits to be on the lookout for solicitation fraud and to take steps to ensure that any online fundraising platform has policies and procedures in place to prevent and detect fraudulent activity.
Are you wondering how to make more of an impact with your organizations fundraising efforts? Email Rea & Associates to review the metrics of your next event.
By Ben Antonelli, CPA (Dublin office)
Looking for more ways to take your nonprofit to the next level? Check out these helpful articles:
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