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Budgeting for fundraising should include estimating both contributed revenue and fundraising costs in order to arrive at projected net contributed revenue. Follow the steps below to build a successful fundraising budget for your organization.
Quantify fundraising performance data from the past three years, eliminating outliers (one-of-a-kind transactions not likely to be repeated):
- Net Contributed Revenue = Total Contributions less Total fundraising expense
- Retained Gift Dollars = Dollar value of contributions from last year’s donors
- Reactivated Gift Dollars = Dollar value of contributions from prior donors who did not give last year
- New Gift Dollars = Dollar value of contributions from first time donors
Analyze qualitative information:
- From which sources, e.g. individual donors, foundations, corporations, is there potential for realistic growth in the year ahead? New donors? Increased giving from past donors?
- What is the basis for arriving at the estimated potential?
- What is the estimated dollar value of that growth potential?
- What additional fundraising costs will be incurred in order to realize that potential?
Synthesize past performance with potential:
- Projected fundraising costs to arrive at
- Projected net contributed revenue.
- Include a budget narrative documenting the data and the reasons behind your projections.
Integrate with the larger organization:
- Synchronize fundraising budget and goals with the organization’s annual budget
- Secure Board approval