Fundraising plays an essential role in helping nonprofit organizations secure the money they need to fulfill their missions. Creating a budget for fundraising can help an organization utilize available resources most effectively.
Determining How Much Is Needed
A first step in the budgeting process is calculating the amount of additional capital needed. Subtracting expected income for the upcoming period from projected expenses can provide an estimate. Expected income can include donation pledges, endowment earnings, grants, and any other income considered highly certain to be received or committed. The difference between expected income and project expenses is an organization’s fundraising goal.
Analyzing what has previously been raised can provide a baseline to show how realistic it can be to attain the fundraising goal. Look at what your organization’s fundraising history has been over recent years. Examine also any specific trends affecting the contribution sources and methods (e.g., online or by mail). Finally, be aware of trends in aggregate giving among all nonprofits, as well as those in your sector.
Nonprofits can gain valuable insight by digging deeper into the fundraising efforts of other, similar organizations. Consider examining data from their Form 990s to see how they are raising and spending money. Such research might suggest changes in strategy if, for example, those organizations are raising money through special events and online campaigns. Similar organizations may also be raising more money by hiring special consultants.
To help further develop a fundraising budget, nonprofits should examine trends in their own fundraising efforts. Patterns in recent total revenue and expense figures, donations by type, and numbers of new and lapsed donors can indicate what has and hasn’t worked for an organization. Understanding where revenue and expenses have come from allows organizations to measure how effective their fundraising budgeting has been and how to best use resources in the future.