How to Conduct a Fundraising Financial Needs-Assessment

Editor Note: this blog post is the 2nd part in a series of professional articles about sports fundraising. It was written by a published author and expert in the field, Dr. Richard Leonard.

Fundraising goals can be both qualitative and quantitative. The qualitative aspect defines the subjective quality of the fundraiser’s operation while quantitative goals are considered “hard financial numbers”.

While both are critical, it is essential to establish financial targets to not only evaluate the current fundraiser, but to assess, through definitive measurements, if the fundraiser is potentially impactful in the future.

The uncomplicated premise behind conducting a needs assessment is simple. The steps are:

uncover the athletic program’s current financial position;
through forecasting and informed projections, determine what financial needs the athletic program will have to reach its strategic goals; and
subtract where the athletic program aspires to be financially from where it currently is.
the actual practice of conducting a fundraising needs assessment, while following the fundamental steps, is much more exhaustive and far-reaching.

Step #1 – Current Position

If the athletic program has comprehensive accounting statements and sound operating systems, determining its current financial position is as easy as “running reports.”

The more itemized the reports (especially the income statement’s revenue streams and expense categories for annual fundraising, and assets in the balance sheet for capital fundraising), the more focused the needs assessment. Unfortunately, in cases where athletic programs have inexact or indeterminate financial statements, the needs assessment process becomes problematic. In other words, not knowing the current financial status of the athletic program makes it much more arduous to determine what funds it will need in the future to accomplish goals.

Example: Team Travel

Through a year-by-year historical analysis of the athletic program’s financial statements, the team travel expense for the past five seasons has averaged $75,000.00 per year.

Step #2 – Future Objectives

The foundations of the athletic program’s future goals are detailed in its annual plan. This document presents the groundwork for forecasting fundraising needs. If an athletic program is developing new and untried strategic goals, deriving forecasts or projections must be through external research, experience and intuition, and hard quantitative analysis. As with Step #1, the more precise the quantitative information, the more focused the requirements for the athletic program’s fundraising.

A major strategic initiative presented in the athletic program’s annual plan is to expand the program’s competitive geographic area as well as increase the number of team trips. Through travel research (costing out trips – transportation, accommodations, meals, etc.), the geographic increase and competitive expansion will inflate the annual travel line item to $110,000.00 per season.

$110,000.00 – $75,000.00 = $35,000.00 deficiency. This is the amount that should be raised from external fundraising activities for this specific strategic area.

Step #3 – Scenarios

There are three possible scenarios that can be derived in Step #3 of the needs assessment process. Either the athletic program’s current funding (1) exceeds, (2) meets, or (3) is deficient for strategic objectives. Regrettably for most athletic programs, the third scenario (the need for additional funds) will be common.

With definitive financial deficiencies, fundraising administrators can start targeting specific fundraising events, activities, and programs to meet these shortages.

Critical Notation from Example: Each operational expense as well as capital asset acquisition needs to be individually examined in this manner. The total of all strategic needs assessments will equal the total annual and capital financial fundraising goals.
– Dr. Richard Leonard

For more information on this and other fundraising topics, please go to: http://fitpublishing.com/books/fundraising-sport-and-athletics