Guidelines in Running Fundraising Campaign

By: Justin Alan

How to Create a Budget for Your Fundraising Event

The necessity of creating a budget for your fundraising even cannot be stressed enough. It is imperative to know how much everything is going to cost so that you will know what to charge and so make a profit. Not only that, but records of all monies received must be kept properly so that no one can be accused of doing the wrong thing with the funds. Once any hint of wrongdoing taints your cause, your sponsors will drop you like a hot cake.

So how do you create a budget? You must get quotes for all your costs. Every single thing that is going to cost any money must be written down. It may be that you can find a cheaper alternative or get something donated that you thought you'd have to pay for, but it all has to be down there in black and white.

You may need to pay for entertainment, catering, speakers, sound equipment, venue, advertising, gifts, decorations and other things that you will think of, depending on the kind of event you are arranging. You also need to write down all your income such as ticket sales, sponsorship, donations and the like. Add them all up and subtract the expenses from the income. If there is not much profit, then you may need to comb through it to see where you can cut costs.

Remember that local people may be willing to donate their expertise or equipment for free to help you cut costs. Even the cost of the venue could be heavily discounted, if not free. If you don't ask, you'll never know, so don't be shy. Also look at alternatives. If you were going for a full band, try a DJ with sound equipment instead. Change the menu to something a little simpler.

Even if your event is something as simple as a car wash, you still need to have a budget. It will be a much simpler budget of course, but you still need to account for the cleaning products used, don't you?

If your event is a really big and complicated one, it may pay you to get special software to help you create the budget. While you're at it, get one of those volunteers who has accountancy skills to do it for you. Or if none of them have, go to your local accountant and ask if he would be willing to donate his time to do it. What a good idea!

Legal and Tax Issues for Fundraising Activities

In many states funds gained by fundraising are not taxable, but it sometimes depends on the organization. For instance, in Illinois, if your organization were considered to be religious, educational or charitable you would need to make an application for exemption 'E' status. This would entitle you to be exempt from incurring Use Tax in some cases.

In some states, religious groups must collect tax on sales, but they may have one tax free sale per year so long as they own what they sell and are selling to members of the public. The sale must not last more than three consecutive days and must be conducted by members of the organization.

In other states, any non-profit organization is exempt from tax. If schools hold a book fair in conjunction with the publisher and get a percentage of their profit for fundraising, they don't have to pay tax on it, but the publisher must pay tax on their portion.

For individuals who deicide to raise money for a charitable cause, if you keep it under a few hundred dollars, then you can probably get away without any legal work - except that you must always keep a strict record of your budget and all financial comings and goings. However, if you are thinking in bigger terms, you may be wise to set up a charitable organization that will be exempt from taxes under the IRS Section 501 (c) (3).

The reason for this is that whatever money you get is considered part of your income and you have to pay tax on it yourself, even though you are not going to keep it. The IRS will want to know exactly how much you made and where it came from and what you did with it. If you can't answer them, they will - to put it mildly - be annoyed. And you will be in hot water.

Another reason is that at least some people - and maybe most - will want a receipt so they can write that donation off on their tax. If you give them a personal receipt it cannot be legally used for that purpose. They will want to know how their money is going to be spent and you are accountable to them for it. If you have an organization, they will be able to verify your trustworthiness by looking at the books and other things that such an organization must have.

It would be a good idea to take half an hour to consult with an attorney about the whole business. If you follow his advice, it will protect you from possible problems further down the track.

How Will You Thank Your Supporters?

Once the fundraising even is over and has been successful, then you will need to thank your supporters and this can be done in a variety of ways. Firstly, your supporters are not only those who made donations, but those volunteers who spent so much time and effort in making the event a success. They deserve recognition and thanks just as much as the sponsors, because without them the event would not even have happened. In fact, the volunteers have worked harder than the sponsors, because all they had to do was write out the check.

To thank the volunteers, a barbecue may be given especially for them. If it is a 'sausage sizzle' you will only need the sausages, bread and sauce so it shouldn't be too expensive. This can be held after the event and can be by official invitation or by word-of-mouth. Just be sure everyone knows about it, or bad feelings will be the result. If you don't want to organize a barbecue, then you could thank the volunteers in a different way. A thank you letter or card would be appreciated.

To thank the supporters for their donations a letter of thanks is in order. But don't stop at the letter; they will like to know exactly how their money made a difference to the cause. If possible, let them see the real evidence by sending a photo of the results. Whether it was computers for the school or rescuing abused pets, it's not hard to take a photo. If you can also show the students using the computers, or the rescued animal in its new home, it will add that personal touch. You may have to get parents' permission for photos of students, though.

Of course, it may take a while to get these photos and you don't want to leave it too long before sending that thank-you letter, so firstly, send a preliminary letter of thanks along with a copy of your budget showing the profit and itemize what the proceeds will be used for. Then later, when these goals have been accomplished, send another letter of thanks with the results. This can be up to several months later and will serve to give your organization a high profile.

When you esteem and honor a company in this personal way, and they can see how their donation made a difference, they will be more than willing to make further donations when the time comes. However, it would be inappropriate to mention this possibility in your thank-you letter.

More to come in Part 6...

Money Management
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 

» More on Money Management
 



Share this article :
Click to see more related articles