Overview: Special Event Budget
Your executive director wants to hold an event to fundraise and promote your nonprofit’s programs. She has asked you to create a budget and justification for this special event based on the scenario below.
Instructions:
Read/Review 2016 Olberding Frambes special events (attached)
Coe (2011, 130) provides a list of recommended practices for special event management that might be helpful in thinking about all the expenses you might incur for your event:
Additional resource:
Webber, D. (2004). Understanding charity fundraising events. International Journal of Nonprofit and Voluntary Sector Marketing 9(2), pp. 122–134. (attached)
The Scenario
Your Executive Director has just heard about a successful Adult Spelling Bee fundraiser event held recently at a similar nonprofit and is wondering if this might be a good fundraiser for your organization as well as a great way to build awareness of the work you do. The event complements the mission of your organization very nicely, which is “to help local communities improve literacy.”
Although it would seem a welcome boost to the organization to run this event, the Executive Director is concerned as to whether or not the event could be run profitably. She has asked you to investigate probable revenue and expenses and prepare a budget and proposal to present at next month’s Board meeting. This includes taking into consideration actions that would need to be taken in order to minimize risk.
The event is expected to run for three hours, and two hours are needed before and after the event for set-up and clean-up. There will be a $300 grand prize for the winner of the spelling bee. Each participant will also receive a participation certificate. Your organization is a 501(c)(3) and has the capability to accept credit cards.
Based on prior budgeting, you already have some data to consider.
Venue Costs
The Center for the Arts is available for the date of this event. The venue charges $75 an hour, and includes chairs and tables, as well as a stage. The venue has excellent sound and lighting systems and therefore there is no need to bring in extra equipment. However, the venue manager does not allow users to have access to the sound/lighting control room. Instead, there is a requirement to pay for a sound/lighting system operator who will be hired by the venue manager at a cost to you of $40/hour.
Celebrity ‘pronouncer’ and judges
In general practice, the announcer and judges will volunteer their time however you will need to pay for the travel expenses and accommodation (one night) for those coming from out of town. The estimated cost of travel and accommodation for one person is $250.
Printing
You will provide a brochure/program to provide information about the event and the organization. Your printer charges $0.20 per side for color printing. There is an additional flat fee for folding and stapling of brochures of $25.00.
Advertising
Advertising in the regional newspaper costs $500, and 10 radio advertisements of 15-second duration cost $1,000 in total.
Food and Refreshments
Catering is estimated at $30 per person. This includes food, refreshments, plates, cutlery, glasses, napkins and tablecloths.
Insurance
Insurance to cover a special event has cost you $100 in the past.
Next you need to think about:
- Staffing (paid and volunteer) to plan and run event (assume a $15/hour wage rate for paid employees)
- Other expenses to make this a viable event, including those related to risk management (be creative in how you envision the event, however it must be realistic)
- Revenue sources: There are multiple ways to earn revenue at this event. Determine the possible revenue sources and estimate amounts and participant and attendee numbers.
- Other relevant information
Once you have all the details of costs and revenues, draft a budget and determine whether It is feasible to go ahead with this event.
Requirements:
Complete and submit your assignment. It has two parts:
PART 1: Once you have all the details of costs and revenues, create your budget using excel for the event, detailing revenues, expenses, and the ‘bottom line’. In a separate column, provide a justification for each item and how you came up with the estimate; AND
PART 2: Write a 1.5-2-page single-spaced memo for the Board proposing and justifying holding the event or not. Include each of these elements, as well as anticipate any questions the Board might have:
1. An overall description of the event and its purpose
2. The goals for the event, and what would constitute a ‘successful’ event
3. Highlights of the budget, including your pricing strategy and ‘bottom line’
4. The factors that will lead you to cancel the event if you go ahead
5. The potential risks you have considered, and the measures proposed to minimize (mention at least 3)
6. Any assumptions you are making
Your grade will be based on the quality and feasibility of your proposal, and the completeness and accuracy of your budget.
Tips:
Read the scenario carefully, identifying all the aspects that would come into play in creating your budget.
Brainstorm all of the potential expenses and revenues you anticipate. You can enter these into a spreadsheet using a program such as Excel, and then start playing around with numbers. Some expenses will be fixed (such as the rental of a room which won’t change regardless of the number of participants), and others will depend on the number of participants (like the cost of food). Add up all the revenues and all the expenses. When you subtract the total expenses from the total revenues, you will end up with a surplus (positive number) or a deficit (negative number).
Don’t forget about volunteer and staff labor, and donations of in-kind items.
Often you have to make several adjustments and try different scenarios before your budget works out. Everyone’s budget will be different, and there is no one right answer. The objective is to ‘learn by doing’ and to encourage you to be creative.
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