Advocating for your Fundraising Expense Budget: 5 Strategies For Success
You know as well as we do that “you have to spend money to make money,” is just as true in nonprofit fundraising as it is in a corporate environment. The dollars that you spend in executing your annual fundraising strategy are essential to your ability to generate revenue, and it’s important to be able to advocate for them. This means everything from development department salaries and event costs, to graphic design, and even envelopes and postage.
In your operating budget, these costs might be lumped together under the heading of development expenses, or they might be split out into bigger picture lines: Staff Salaries, Administrative Overhead, Space Rental, Hospitality. Either way, we cannot recommend strongly enough that you proactively take a role in drafting the budget for your expenses to make sure that your big plans for contributed revenue come to fruition!
Here are a few tips for navigating the budgeting process:
Crunch your numbers. Look at what the development department spent over the last two years and put together a set of assumptions around what you will need to spend in the next year to maintain your fundraising at the same level. Be prepared with some analysis of your ROI and the understanding of the financial and non-financial factors that led to last year’s fundraising results. For example, how many year-end appeal letters did you have to mail in order to reach your goal, and what was the cost of sending those letters? If your organization is experiencing some growth and your contributed revenue budget is increasing, use that data to make educated projections for increases in next year’s expenses in order to support your new goals—whether that means hiring an additional staff person, investing in more donor research, or adding another event to your calendar.
Be in the Know. Find a way to inform yourself about the overall organizational budget. It’s important to have a sense of the scale of the rest of the organization’s expenses for next year. If you’re sharing an administrative line (like postage, printing, or hospitality) with another department, make sure you understand who else in your organization will be drawing from that line and how much you are each expected to spend. Maintaining open communications during this planning process is key.
Speak Up. No one can advocate for your department’s needs like you can, so don’t be afraid to be vocal where necessary and appropriate, and start the conversation early. Drafting an operating budget can be a long, intensive process for the person leading the project and depending on the size and culture of your organization, the onus may be on you to be proactive about making your needs heard.
Be realistic and clear. Use the information that you have gathered throughout your process to make sure you’re clear about what money you need to spend to accomplish your goals and how your results will be impacted if your resources are decreased (or increased). Use the reliable numbers and education projects from #1 above to inform your assumptions around what you can accomplish with your expense budget.
Keep Clean Records. Once your budget is approved and you’re ready to dive into the next fiscal year, make sure to set a process so that you are regularly tracking your actual costs against the expense budget. This information will come in handy as you have to make changes to your strategies throughout the year!
Looking for more information on budgeting? Check out our post Building Your Contributed Revenue Budget: 5 Tips from Donorly Consultants.