Are You Ready To Host a Fundraising Auction?
- Are you a non profit organization with a 501c3 number? A governmental organization, school, or church? If you answered no to this question you need further evaluation. If you are none of the above in most cases you are not considered charitable and thus cannot collect donations and offer donors a tax deduction for their gifts.
- Do you have an involved volunteer group, either board of directors or engaged volunteers, who could assist with the planning and execution of an event?
- Has the organization ever held a special event before?
- Does the organization have the capabilities to receipt all gifts received, send timely receipt letters, and track all donors and event attendees?
- Based on initial calculations and estimates, will it cost $.50 or less to raise a $1.00. Example, if your estimate the total event grosses $10,000, total event expenses $2,500 = a cost per dollar of $.25.
- Are staff, volunteers, and board members prepared to ask local businesses and individuals for support both through auction items and sponsorships?
Measuring Your Success:
One of the ways in which charitable organizations measure the success of a fundraising initiative is to determine how much it cost the organization to raise one dollar. When it comes to special events the industry standard is $.50 to raise $1.00. This is one of the higher rates, compared to the national average cost per dollar raised which is $.20. Organizations should use these national benchmarking standards when evaluating the success of an organization or special event. Typically, organizations calculate the cost per dollar raised for a special event by taking the total event costs divided by the gross revenue.
Resources: http://www.irs.gov/pub/irs-pdf/p1771.pdf
Disclaimer: The information included from BiddingOwl does not represent professional advise. All organizations should discuss receipting and tax requirements with a professional account.
