Section 12. Designing and Implementing a Fundraiser

Community organizations often need to raise resources beyond grants, contracts, public funding, and other institutional sources.

Fundraising can provide flexible revenue, strengthen relationships, engage community members, and support specific programs or projects. It can also require substantial staff time, volunteer effort, upfront spending, compliance work, and organizational attention.

The goal is not simply to raise as much money as possible. A strong fundraising strategy raises appropriate resources efficiently, ethically, and in ways that support rather than distract from the organization's mission.

What is a fundraising activity?

A fundraising activity is an organized effort to generate financial support for an organization, program, project, or charitable purpose.

Fundraising activities may include:

• Community events
• Benefit performances
• Walks, runs, rides, or other peer-to-peer campaigns
• Product sales
• Auctions
• Giving days
• Crowdfunding
• Online fundraising campaigns
• Community challenges
• Other mission-aligned fundraising activities

Some fundraising activities involve providing participants with an event experience, product, meal, merchandise, or other benefit in exchange for payment. Others primarily invite voluntary charitable contributions.

These distinctions can affect tax treatment, donor disclosures, accounting, and legal requirements.

Why conduct a fundraising activity?

To generate net revenue

Fundraising should have a clear financial purpose when generating revenue is one of its goals.

Measure net revenue, not simply how much money comes in.

Consider:

• Gross revenue
• Event or campaign expenses
• Staff time
• Volunteer coordination
• Technology or platform fees
• Insurance
• Permits
• Payment-processing fees
• Donated resources and their opportunity costs
• Follow-up and stewardship

Example: A community coalition organizes a large annual festival. Hundreds of people attend and enjoy the event, but after facility costs, equipment, food, insurance, entertainment, technology, staffing, and months of planning are considered, very little net revenue remains.

The coalition should assess the event against its actual objectives. If the primary goal was fundraising, the event may need to be redesigned or replaced. If community engagement was also an explicit objective, those results should be evaluated separately rather than assuming a popular event was financially successful.

To engage new supporters, volunteers, or partners

A fundraising activity can introduce people to an organization's work and create opportunities for future involvement.

Do not assume that everyone who attends an event wants to become a donor, member, volunteer, or subscriber.

Provide clear and voluntary opportunities to:

• Learn more
• Subscribe to updates
• Volunteer
• Donate
• Participate in programs
• Join future activities

To increase understanding of the organization's work

Fundraising activities can help community members learn about:

• The organization's mission
• Programs and services
• Community priorities
• Results and lessons learned
• Opportunities for participation

For example, a domestic violence and survivor-support organization might hold a community bowling event that raises funds while sharing information about prevention, services, and ways community members can support survivors.

Educational communication should remain accurate, accessible, and respectful rather than turning participants' experiences into promotional material.

To demonstrate community engagement

Successful local fundraising may provide evidence that community members are willing to contribute financially or participate in the organization's work.

Funders sometimes consider this information when evaluating community support.

However, money raised or event attendance does not prove that:

• The program is effective
• Everyone in the community supports it
• People who cannot afford to donate value it less
• The organization is financially sustainable

Use fundraising results as one source of information rather than as a universal measure of community support.

To increase financial flexibility

Some fundraising revenue may be unrestricted, giving an organization more flexibility than funding restricted to a particular program or contract.

Flexible revenue can support:

• Administration
• Staff
• Evaluation
• Technology
• Facilities
• Program needs
• Reserves

Unrestricted revenue is still subject to the organization's charitable purpose, governance responsibilities, representations to donors, accounting requirements, and applicable law.

When should you conduct a fundraising activity?

Begin planning before the organization faces an urgent cash shortage.

Fundraising may be appropriate when:

• A specific project needs resources
• The organization has established an annual fundraising strategy
• Community members want a meaningful way to support the work
• A program has a clear resource gap
• The activity advances both financial and community-engagement goals

Timing should consider:

• Organizational cash flow
• Staff capacity
• Community calendars
• Weather for outdoor events
• Donor history
• Competing events
• Venue availability
• Lead time required for permits, sponsors, vendors, and volunteers

There is no universal rule that a particular season is always best for fundraising. Use your organization's own experience and data.

Should a successful event become annual?

Not automatically.

Before repeating an activity, assess:

• Net revenue
• Total staff and volunteer workload
• Community interest
• Mission value
• Safety and compliance burden
• Donor and participant feedback
• Opportunity cost

An annual event can become a valuable community tradition, but it can also continue long after it stops being an effective use of organizational resources.

How do you plan and carry out a fundraising activity?

1. Begin with mission and financial strategy

Ask:

• What are we trying to accomplish?
• What resources are needed?
• Why is fundraising the appropriate strategy?
• How does this activity fit with grants, contributions, contracts, earned income, and other resources?

Do not allow fundraising itself to become the organization's primary activity unless fundraising is central to its mission or structure.

2. Establish the goals of the activity

Set specific goals before choosing the fundraiser.

Possible goals include:

• Raise a specified amount of net revenue
• Fund a particular project
• Recruit recurring donors
• Engage new community members
• Build partnerships
• Increase understanding of a community issue

Separate financial goals from nonfinancial goals so each can be evaluated honestly.

3. Develop a complete budget

Estimate:

• Expected revenue
• Upfront expenses
• Venue costs
• Food and beverage costs
• Equipment
• Entertainment
• Permits
• Insurance
• Security
• Accessibility
• Marketing and communications
• Technology
• Payment-processing fees
• Staff time
• Volunteer support

Establish:

• Revenue target
• Expense limit
• Break-even point
• Desired net revenue

A fundraiser that brings in $50,000 but costs $45,000 and consumes hundreds of staff hours is financially different from one that raises $30,000 with $5,000 in expenses and far less organizational burden.

4. Establish financial controls

Determine:

• Who can authorize expenses
• Who handles cash
• How payments are processed
• How revenue is recorded
• How cash is reconciled
• Who has access to financial systems
• How refunds or disputes are handled

Use separation of duties where practical so that one person does not control collection, recording, reconciliation, and deposit of funds.

5. Choose the right fundraising approach

There is no universally best fundraiser.

Possibilities include:

• Benefit dinners or community meals
• Auctions
• Walks, runs, rides, or other peer-to-peer challenges
• Concerts or performances
• Community festivals
• Art or craft sales
• Plant, book, or merchandise sales
• Giving days
• Crowdfunding campaigns
• Online peer-to-peer campaigns
• Virtual events
• Community tournaments
• Other activities appropriate to the organization and community

Evaluate each option according to:

• Expected net revenue
• Upfront cost
• Staff and volunteer workload
• Audience
• Mission fit
• Accessibility
• Safety
• Legal and tax requirements
• Community interest
• Environmental impact when relevant
• Reputational risk

6. Use special care with raffles and other games of chance

Raffles, bingo, casino nights, lotteries, and other games of chance are regulated differently from ordinary fundraising events.

Before conducting one:

• Determine whether it is legal in your state or locality
• Determine whether a license, registration, or permit is required
• Understand applicable recordkeeping and reporting requirements
• Review federal unrelated-business-income implications
• Understand donor tax treatment

The cost of a raffle, bingo, or lottery ticket generally is not treated as a deductible charitable contribution for federal income-tax purposes.

7. Understand the tax treatment of tickets, meals, merchandise, and other benefits

A person who pays to attend a fundraising dinner, concert, sporting event, or other benefit may receive something of value in return.

Generally, only the portion of a payment exceeding the fair market value of the benefits received may qualify as a charitable contribution.

Certain quid-pro-quo payments also trigger disclosure requirements for the charitable organization.

Determine the fair market value of relevant donor benefits before the campaign so that fundraising communications and acknowledgments are accurate.

8. Review fundraising registration and other legal requirements

Fundraising is regulated primarily at the state level in the United States.

Depending on the activity and location, the organization may need to consider:

• Charitable-solicitation registration
• Raffle or gaming licenses
• Event permits
• Sales-tax obligations
• Food-service requirements
• Alcohol licensing
• Temporary-use permits
• Noise requirements
• Traffic or street-closure permits
• Professional-fundraiser registration

Requirements vary significantly by jurisdiction, so verify them for the specific activity and location.

9. Develop a safety and risk-management plan

Events may create risks involving:

• Crowds
• Weather
• Food
• Alcohol
• Transportation
• Children
• Athletic activities
• Equipment
• Cash
• Emergencies

Depending on the event, plan for:

• Appropriate insurance
• First aid
• Emergency procedures
• Security
• Crowd and traffic management
• Weather contingencies
• Safeguarding
• Accessibility

10. Recruit and support the people needed to carry out the activity

Identify specific roles rather than simply trying to recruit as many volunteers as possible.

Roles may include:

• Event coordination
• Registration
• Food service
• Setup and cleanup
• Financial handling
• Accessibility support
• Communications
• Safety
• Donor or sponsor relations

Volunteers should receive enough orientation, training, supervision, and support to perform their roles safely.

Do not depend on chronic unpaid labor for work that should reasonably be staffed and compensated.

11. Seek appropriate sponsors and donors

Businesses, individuals, foundations, community organizations, and other supporters may contribute:

• Financial sponsorship
• Matching gifts
• Prizes
• Food or supplies
• Facilities
• Professional expertise
• Technology

Use a gift-acceptance policy and evaluate significant sponsorships for mission alignment, restrictions, tax treatment, advertising implications, conflicts of interest, and reputational risk.

12. Approach major donors professionally and without pressure

A major-gift conversation can sometimes provide substantial support more efficiently than hundreds of small transactions.

Identify prospective donors based on legitimate relationships, publicly expressed interests, previous engagement, and mission alignment rather than private personal information.

Explain:

• The project
• Community need
• Funding goal
• How the gift would be used
• Available evidence or results
• Recognition options, if any

An appropriately sized request may be helpful, but donors should be free to decline or choose another amount without pressure.

Protect participant dignity and privacy

Do not promise donors individual access to participants, photographs of specific participants, personal correspondence, or sensitive stories merely as a benefit of giving.

Participants - especially children - should be included in fundraising communications only when:

• Participation is genuinely voluntary
• Appropriate consent or permission has been obtained
• People understand how the information will be used
• Refusing will not affect services
• Privacy and safeguarding have been considered

13. Communicate accurately about the fundraiser

Provide clear information about:

• Who is conducting the activity
• Its charitable purpose
• Ticket or registration prices
• What participants receive
• Whether any portion may be tax-deductible
• Sponsors
• Relevant restrictions or conditions

Avoid exaggerated claims about what a particular donation will accomplish.

Statements such as "$100 provides a month of services" should be used only when the organization has a reasonable, current basis for the calculation.

14. Collect attendee information transparently

Event registration may require names and contact information for operational purposes.

Do not automatically convert every attendee into a fundraising prospect or subscriber.

If you want to send future fundraising or organizational communications, explain that clearly and provide an appropriate opportunity to opt in or otherwise express communication preferences.

Door prizes or contests should not be used primarily as a concealed way to build a donor list.

15. Photograph and document events responsibly

Photos and video can help document the activity and communicate about the organization's work.

Establish an appropriate policy for:

• Participant notice
• Consent when needed
• Children
• People receiving sensitive services
• Use on websites and social media
• Media access

16. Prepare event operations

A current event checklist might include:

• Venue agreement
• Permits and licenses
• Insurance
• Emergency contacts
• First-aid supplies and response plan
• Accessibility arrangements
• Weather contingency
• Staff and volunteer schedule
• Registration system
• Secure payment system
• Cash-handling procedures where cash is accepted
• Financial reconciliation procedures
• Food and beverage arrangements
• Signage
• Technology and internet access
• Communications materials
• Security or crowd-management arrangements
• Cleanup and waste plan
• Transportation or parking information
• Designated operations lead

After the fundraising activity

Thank donors, sponsors, volunteers, and partners

Provide prompt, appropriate acknowledgment.

Donor acknowledgments should comply with applicable substantiation and disclosure requirements.

Recognition should also respect:

• Requests for anonymity
• Donor preferences
• Sponsorship agreements
• Participant privacy

Reconcile the finances

Determine:

• Gross revenue
• Expenses
• Outstanding receivables or pledges
• Refunds
• Net revenue
• Restricted funds
• In-kind contributions

Reconcile cash, electronic payments, ticket systems, and financial records promptly.

Evaluate the full results

Review financial and nonfinancial outcomes.

Ask:

• Did we reach our net-revenue goal?
• What did the event actually cost?
• How many staff and volunteer hours were required?
• Did we reach the intended audience?
• Did participants find the event accessible and worthwhile?
• Were there safety or compliance problems?
• Did we build useful relationships?
• Did we receive complaints or privacy concerns?
• What should change next time?

Manage donor and attendee information responsibly

Keep only information needed for legitimate fundraising, stewardship, financial, compliance, and organizational purposes.

Protect it through:

• Appropriate access controls
• Secure technology
• Accurate records
• Communication preferences
• Opt-out processes
• Retention and deletion policies

Decide whether to repeat the fundraiser

Do not automatically make an event larger the following year.

Decide whether to:

• Repeat it
• Make it smaller
• Expand it
• Change the format
• Move it online
• Combine it with another campaign
• End it

Base the decision on net results, mission value, staff and volunteer capacity, risk, accessibility, and community feedback.

In Summary

Fundraising activities can provide important flexible resources while also creating opportunities for community engagement, education, and relationship-building.

Begin with mission and financial strategy rather than assuming that every organization should hold events or raise as much money as possible.

Define the goals of each fundraiser, develop a complete budget, calculate expected net revenue, consider staff and volunteer workload, establish strong financial controls, and select an approach appropriate to the organization and community.

Understand that different fundraising activities carry different legal and tax requirements. Event tickets may provide donors with goods or services that affect deductibility. Raffles and other games of chance may require state or local authorization and can create federal tax and reporting issues. Charitable-solicitation registration, event permits, food or alcohol requirements, and other rules may also apply.

Protect donor and participant choice. Do not use social relationships to pressure people to contribute, automatically place attendees on fundraising lists, or use participant stories and images without appropriate permission.

Evaluate fundraising based on more than gross dollars. Net revenue, total cost, staff and volunteer time, accessibility, safety, donor experience, community engagement, mission alignment, and opportunity cost all matter.

Finally, use what you learn. An annual fundraiser should continue because it still produces meaningful value - not because the organization has always held it. The most successful fundraising strategy is one that provides needed resources while allowing the organization to remain focused on the community work those resources are meant to support.