Most people are familiar with how to budget for expenses. The information below shows some methods that will help you calculate the revenue projections in your fund development plan.
Annual Campaigns
Revenue for annual campaigns that use methods like direct mail, telephone solicitation, email, or door to door campaigns is usually calculated based on a formula that takes into account:
As an example:
100,000 letters x average response of 4% x average donation of 28 = a total raised of $112,000.00
For direct mail, average rates of return and size of donation will vary depending on the type of list that is used. If the mailing list is compiled by the organization and is made up of past donors, people who receive the newsletter, and people involved in the organization in some way, the average rate of return will be higher. If the mailing is to the general public, the percentage returns and average donation size will be lower.
For door to door campaigns, revenue projections are calculated using a similar formula. Start with the total number of homes to be canvassed, multiplied by the expected rate of return as a percentage, multiplied by the average size of donation. As an example, the campaign may canvas 100,000 homes with an average response rate of 8% and an average gift size of $8. 100,000 x .08 x 8 = $64,000.
These examples show a way of estimating the revenue before expenses. When planning a campaign, make an estimate of the revenue, then deduct the cost of the letters, brochures or other material that will be used, to determine the net return for the campaign.
Capital Campaigns
To project the revenue of a capital campaign is necessary to develop a standards chart that indicates the potential of specific prospects. The standards chart should adhere to some basic principles of a capital campaign. Capital campaigns often are conducted over a period of two to five years, so it may also be necessary to take cash flow into account when estimating how the needs of the organization will be met by the campaign.
Special Events
Planning the revenue from a special event usually means taking into account the combination of a variety of revenue sources, such as ticket sales, possibly concessions or a bar, silent or live auctions, pledges, sponsorships, and so on. The number of people participating in the event, evidenced by ticket sales, proceeds from auctions or similar associated fundraisers and the proceeds from sponsors generally determine the amount of revenue.
If the event is the type that has participants soliciting pledges of support from many people, a similar method would be used to estimate revenue as was used for annual campaigns. The number of participants would be multiplied by the average pledges per participant.
Costs also vary widely depending on the type of event. Typical costs are advertising, venue rental, food and beverages, entertainment and prizes. Costs may be calculated per attendee.
Gaming
The calculations that determine the odds of winning and therefore, the number of tickets that will appeal to the market are quite complicated. For the purpose of this assignment, this type of detail is not necessary. If you chose gaming as an option, simply make your best guess at the number of tickets you plan to sell and the price of each ticket. Once the number of tickets and the price of the tickets are determined, the projection of revenue is pretty straightforward, determined by multiplying the number of tickets available by the price of each ticket. You may want to add a contingency factor for the possibility that not all the tickets sell.
The net revenue is determined by deducting costs from the amount received through ticket sales. Costs include the prizes, the advertising and sales of tickets, and printing tickets. These costs can vary widely depending on the size of the lottery or raffle.
There is no way of calculating the revenue from other forms of gaming like casinos and bingos. Usually an estimate can be made based on past experience and the experience of other organizations, but the amounts will vary depending on a number of factors that are not in the organization's control.
