A special event, whether it’s a black-tie gala, art festival, walk-a-thon, or neighborhood beautification day takes time, planning and a budget. But who really owns the budget—the finance or development department?
For the finance office, it is as much about cash flow as it is about potential revenue. For the development office, it’s about soliciting underwriters and event sponsors, as well as having the money to secure the various pieces you need prior to the event. For both, it’s about planning.
Usually, things cost more than anticipated, and those sure-bet sponsors choose not to come on board—even though you have given them until the last minute. From event venues to catering, invitations to awards, all pricing varies according to the vendors and the demand. A detailed, comprehensive plan, including various scenarios, options and unexpected or hidden costs, will go a long way in determining the budget as well as the cash flow needs well in advance of the actual event.
In planning the event, it is critical to have all the internal stakeholders, the finance and the development offices, brought together to collaborate on the budget. Items to discuss would include:
- Review of last year’s event budget, if applicable
- Review of potential sponsors, number of attendees, and other revenue generating opportunities, including a realistic goal of how much money is to be raised from the event (HINT: Be conservative – sometimes the best laid plans fail because of influences that are outside of the organization’s control.)
- Review of anticipated costs associated with the event (HINT: Budget liberally – again, unplanned costs do arise, and sometimes changes need to be made that incur increased expense. When a planned expense is donated as in-kind, you can celebrate and put the allocated monies to the bottom line.)
- Timing of payment for various vendors prior to and following the event
- Expectation of revenue pre-event, event, and post-event
- Determination of how the finance and development teams will communicate budget details and updates as well as manage this information.
Intuitively, both the finance and development offices need to track and record the financial details of the event. With fund accounting and fundraising systems that work together, information can be shared between the systems without the need for manual reconciliation. Flexibility within those systems allows you to customize fields specifically for the way your organization manages the event, and allows for comprehensive reporting once the event has taken place. With options for fund accounting Executive View Licensing, the financial office and the development office can collaborate real-time within the same financial budget, and update those shared budgets as expenses or revenue details change.
For large organizations with multiple events at multiple locations, fund accounting software that allows for unlimited budget versions; budget sharing; and that can report on expenditures and revenue across multiple fiscal years, budget periods, and cost centers is essential. The complexity of managing not just the financial details, but event details such as planning, communication and registration is greatly alleviated and streamlined by software that encompasses event management capabilities.
No matter how large or small, planning, budgeting and managing special events are most successful when the finance and development offices work together, and have the systems in place to make the communication easy.