We are often asked for a ballpark range to launch an run/walk/ride-style fundraising event. This is difficult to answer without knowing the specifics or goals of the organization. For example, what is the business need (i.e., revenue, awareness, advocacy, or something else) the event is meant to address? Is brand image, sponsorship activation, celebrity endorsement, and/or event experience a priority? How will the event be managed? Will it be a national series and warrant purchasing and transporting equipment?
As with all events, production costs can vary greatly depending on quality or complexity of production elements, branding efforts on event, sponsorships & in-kind donations, marketing efforts and history in the marketplace. For example, $50,000 is a large budget for a 5K walk in its 3rd year with a simple event model. However, that same amount of money will not provide adequate funding if a ceremony or celebration is associated with the event.
Variable expenses for many events include: sound, video, stage, tents, tables, chairs, police, security, fire, medical, permits, barricades, fencing, toilet, trash, food/water, photographers, videographers, printing, bibs, timing services, signage, forklifts/golf carts/heavy equipment, and generators. Of course, donated resources, including goods, services, facilities, knowledge, skills, access and influence can make a valuable contribution to an event, but there are hard costs associated with managing and mobilising these in-kind resources. For example, who is going to pick-up, store, and transport your donated food and beverage?
- What are the broad budget categories? There are four things that are required of all successful event fundraising programs: developing and implementing an effective fundraising and sponsorship ask, generating sufficient attendance, creating an impactful experience, and providing robust support.
- Can an event for 1,500 participants be executed for under $20,000? Definitely. These events typically are grassroots events managed by volunteers with an emphasis is placed on securing as many donated goods as possible. This can be a successful model if the volunteers are dedicated and experienced. However, without a strong infrastructure in place, even grassroots events will experience an increase in costs for the first year and should assume 100% increase or doubling of the budget. It is usually the expenses you did not allocate funds for that come up at the last minute and cause budget variances. This grassroots budget does not account for a high production quality, marketing, staff planning time, fundraising materials and customer support for participants, program development, and website.
- Can we launch a “test” event with a smaller budget in the first year? Yes, but remember that the launch event is your best marketing tool for future events. Word of mouth is important following a first year event. In fact, mature events can experience up to 70% word-of-mouth acquisition. Offering participants a great first-year experience is critical to future success.
- What is the range of expenses for a one-day athletic event that is managed professionally? A launch year can range from $75,000 – $150,000 assuming the use of a professional staff for planning and execution. While you may experience a decrease in subsequent years due some initial start-up costs that can eventually be eliminated or reduced, this is not always the case.
- Do I need a registration fee? Income from event participants (not including cash sponsorships or in-kind donations) comes from a registration fee, if one is collected, and fundraising efforts of registrants. The registration fee for a one-day charity event typically ranges from $15-$75, but seem to average about $25. We often recommend utilizing a registration fee for an organization’s fundraising events. Too many fundraising events tolerate a large percentage of non-performers. A successful fundraising event requires a strong fundraising culture. A registration fee helps set an expectation by requiring something of the participant up front. This will guarantee a certain level of income for the event by ‘weeding’ out the non-performers and raise the awareness and mindset that the cause is important, money is needed to take action to help the cause, and there is value to being part of the event. Positioned correctly, such a fee can have a positive effect on fundraising performance, while at the same time decreasing event support costs by reducing the number of non-performing participants. To learn more about this topic, please refer to our blog series on registration fees.
- Do I need a fundraising minimum? If you are debating between a suggested and required fundraising minimum, there are several factors to consider. First, for a one day event in its first year carefully consider suggesting a minimum level. Typically, the fundraising suggestion ranges from $50 – $250. If the event is very unique or exclusive, the event may consider requiring a fundraising minimum. With a suggested minimum, an organization can expect that only a portion of participants will fundraise beyond the registration fee. The industry benchmark indicates that 70 – 90% of the event’s participants will choose not to fundraise. However, the bulk of donations come from extremely loyal and dedicated (the top 1-5% of participants). These loyal supporters will raise 50 to 80% of the total funds. We recommend organizations concentrate retention efforts – identifying and keeping these loyal constituents. Top fundraisers can raise thousands of dollars which will create a lift in the average fundraising per participant.
- How much such I budget for participant recruitment?Generating sufficient attendance is one of the largest (and often most expensive) challenges a first-year event faces. While a well-funded event might test as many promotional channels, tactical elements, media and response vehicles as possible to see what works and what doesn’t from both a strategic and metric standpoint, smaller events often rely entirely on word-of-mouth and in-kind promotion in year one.
Regardless of whether you go big or go small, there are six steps to consider before you can answer the budget question:
- Who is the target audience to be pursued?
- What goals are to be accomplished in terms of advertising impressions, leads, new participants, and repeat participants?
- What is the overall strategic approach and positioning that will be used to reach the target audience and meet the plan’s objectives?
- What is the marketing channel mix required to generate sufficient participation from the target audience?
- Who will be responsible for each action?
- When will each action be engaged in?
- How much will be budgeted for each action?
If launching your own event is not in the cards, there are alternatives. Many nonprofits are looking at third-party or independent fundraising event (IFE) programs—a few examples include National MS Society’s Do It Yourself Fundraising Program, Team Fox, Canadian Cancer Society, Autism Speaks, and Livestrong. We also have a white paperon this subject that we co-authored with Blackbaud. Regardless, we always encourage organizations to conduct a technical feasibility and economic viability study before embarking on a new event concept. Event 360 has conducted similar studies for a wide-rang of organizations. For very small grassroots organizations, this task can sometimes be outsourced to a local consultant or business school.
Deciding when and how to launch a new fundraising event program can be a challenge. There are many factors to consider and the research can be endless. Whether selecting an event or program to convert to a fundraiser, or launching a brand new concept, Event 360 can help. We have a tested method for assessing the potential of an event, piloting event programs, and creating scalable event models that become long-term revenue generators.
Are you thinking of launching a new event? Contact Event 360 to learn more.