When it comes to budgeting for marketing and fundraising, there is a lot of guesswork going on in the not-for-profit world. It is not unique to our sector, marketing has always been seen as more art than science, at least in its early days. But when uncertain times lay ahead it is better to carefully plan and take mitigated risks than to depend on what has worked out in “normal” times. There is no status quo anymore, spending more to make more no longer offers the same guarantees. We must now spend smarter if we want to have more impact.
There are a few things that will automatically make or break a marketing budget. The first is – what you have in your toolbox to work with at the onset. There are no such things as miracles, so if you are missing the basics like a responsive website, brochures, active social media channels, updated mailing lists, or even enough qualified staff members- no matter how much money you throw at marketing or fundraising you will be missing the basic tools to get it done. Take an honest inventory of your organization’s assets before you get started.
The second thing that can make or break your budget is timeline. If your goal is urgent, you will end up paying more to mobilize resources to get it done under a tight schedule. The better way to spend your money is by planning and allocating resources wisely. Giving your team enough time to find the resources available in your network, means you are more likely to have success and stay on budget.
Which comes first – the budget or the goal?
Well, both concordantly. You can have grand goals but not have the budget to realistically achieve them. On the other hand, you can have a reasonable budget to spend but the goal is not worth the expense, in terms of the impact you wish to have.
The main goals of marketing for nonprofits can be broken down into the following categories:
Long term goals:
- Increase brand awareness
- Advocate for the cause
Short term goals:
- Increase donations & revenue streams
Long & short term goals:
- Increase engagement to maximize the ongoing support of your community
In order to be effective, your marketing plan should evaluate how you will distribute your budget into these main categories in order to best achieve your goals. That depends directly on how well defined your goals currently are.
By analyzing the landscape you are operating in and knowing your current donors and community of support you will be able to customize the ideal budget for your goals. Here are some questions to ask before deciding on how to spend:
- How generous is your donor base?
- How well known is your cause or issue?
- How popular is the method you are using with your donors’ age segment?
The nitty gritty
So how much should the average nonprofit dedicate to marketing? In an ideal world, around 10% of the annual budget should be earmarked for quality spending on marketing. But most of us don’t live in an ideal world, so it is safer to say that we should align the amount we spend with the best return on investment (ROI) for the organization while keeping in mind both long term and short term goals.
According to Causevox, an online fundraising platform, for every $100 raised $35 or less should be spent on expenses. How are you faring at breaking down your return on investment? Use the calculation below to have a better idea* of what is giving you the most bang for your buck.
Want some advice from our budget specialists on your spending?
*Don’t forget to include staff salary when calculating the expenses of a campaign or marketing initiative. Consider how you attribute traffic, online interactions, and subsequent donations made through expenses related to digital marketing.
Reduce your risk of failure by:
- Taking the time to plan
- Testing the effectiveness of strategies before scaling them into major investments.
- Being honest about your skillset – subcontract tasks that would be a more effective use of your team’s time
- Staying up to date on technology and trends, be forward thinking and don’t rely on what has always worked as your only method of operations
- Sticking to the plan but being flexible and adjusting when needed, especially with your digital spend
Making a plan with someone that has experience in the not-for-profit sector can help you gauge where to best spend for smarter results. Bounce some ideas with us – a reliable sounding board will help you identify elements that might be off key in your marketing or fundraising plan.
Remember, that just as in a home renovation, going at it with a hammer alone will end up costing you more to fix than calling in a specialist for some good advice before starting the job.