Creating a Fundraising Plan
A fundraising plan serves as your roadmap to success— a compass directing your efforts, making each step intentional and significant. This document embodies your dedication, capturing your thoughts, ideas, and commitment to the cause.
Without a plan, you risk being adrift in uncertainty. Even well-intentioned efforts can lose direction, diluting the impact. Hence, your fundraising plan must not only echo your ideas but also project your aspirations. It’s a declaration of your dedication and a commitment to those who stand to benefit from your endeavors.
Craft this plan boldly, mirroring your audacious dreams. By doing so, you’ll not only inspire others to join your cause but also ignite a spark within yourself to achieve greatness.
Fear has no place in your journey towards setting an ambitious fundraising goal. Dream big, keep faith in your cause, and approach your goal-setting with a mindset of abundance rather than scarcity. Remember, every organization operates differently. For some, it’s the Development Director who holds the reins on budget-setting, while in others, the board plays a pivotal role. To assist you, here are some key strategies for crafting your financial goals. Remember, the most effective approach often combines these strategies, allowing you to view your goal from distinct vantage points.
Last Cycle: This tactic emphasizes learning from your past to anticipate your future. Let’s say your organization raised $1M last year - it’s fair to expect a similar or even better performance this year. To fine-tune our forecast, we might use market trends or philanthropic databases. For example, if the stock market is predicted to surge significantly, we could consider adjusting our budget accordingly.
Budget First: This strategy centers on your organization’s immediate financial needs. It involves identifying the necessary funds and working backward to establish your goal. Its beauty lies in its simplicity, which makes it suitable for capital campaigns or for organizations facing time-sensitive challenges.
Rolodex Method: This method uses your initial prospect list to estimate your fundraising potential. Once you’ve identified your prospects and assigned a potential donation value to each, you can make long-term financial projections. For example, you might assume that 60% of your close friends will donate the amount you ask for. This approach can also be invaluable for projecting major gifts portfolios.
Incremental Growth Method: This method involves setting a fundraising goal that is a certain percentage higher than the previous year or campaign. The increment could be based on past growth rates, inflation, or an arbitrary figure. It’s simple to calculate, but it assumes that past performance will continue, which may not always be the case.
Donor Capacity Analysis: This method involves a detailed study of your existing and potential donors to estimate how much they might be willing and able to donate. You may consider their previous giving history, personal wealth, connections to your cause, and other factors. This requires more work and access to donor information, but it can be more accurate than other methods.
Peer Comparison: This method involves looking at similar organizations or campaigns and their fundraising success. It requires careful analysis to ensure comparability, but it can provide a realistic idea of what’s achievable.
By weaving together these strategies, we build a financial goal that is both grounded in reality and ambitious in scope, reflecting the power of your cause. This diverse approach allows us to anticipate, strategize, and ultimately, excel. Remember, your journey towards your goal is a reflection of your faith in your cause, so dream big and make it happen.
A comprehensive fundraising plan should encompass:
Executive Summary: A succinct overview of your plan, encapsulating fundraising goals, objectives, target audiences, and primary strategies.
Organizational Overview: Your organization’s mission, vision, and impact, painting a clear picture for potential donors.
Situation Analysis: A detailed scrutiny of your current fundraising environment, including a SWOT analysis, donor base review, and an account of current fundraising initiatives.
Fundraising Goals and Objectives: Clear, measurable goals and objectives, enumerating specific targets across various channels, such as major gifts, annual giving, grants, and special events.
Target Audiences: A profile of your fundraising audiences, including potential major gift donors, annual donors, grant funders, and event attendees.
Fundraising Strategies and Tactics: Detailed strategies and tactics employed, like major gift solicitation, annual campaigns, grant writing, and special events.
Budget and Resources: A precise budget outlining projected costs, including staffing, materials, and other expenditures.
Implementation and Evaluation: A practical plan to execute your fundraising efforts, including timelines, responsibilities, and success evaluation metrics.
Risk Management: Identification of potential risks and strategies to navigate them.
Calendar: A schedule of events and activities, serving as deadlines for various channels like emails, direct mails, and events.
Cash Flow: Critical in political campaigns, a monthly cash flow calculation ensures adequate funds for large expenses like advertising purchases and paid field programs.
Conclusion and Next Steps: A summary of the plan and a roadmap for implementation and evaluation.
Developing a donor pyramid is a cornerstone of any non-profit’s fundraising plan. This approach classifies donors into tiers based on their donation amounts, with the broadest group forming the pyramid’s base and the smallest at its apex. The aim is to progressively engage donors, encouraging them to ascend the pyramid through increased donations.
To formulate a donor pyramid, begin by cataloguing your current donors and sorting them into brackets by their annual donations. For instance, you could have groups donating under $100, between $100 and $500, and above $500. Subsequently, consider what rewards or incentives could be offered to each tier. Perhaps exclusive events or content for your top donors, while sharing more generalized information with those at the pyramid’s base.
With your donor tiers and corresponding benefits established, create a strategy to elevate donors up the pyramid. This may involve targeted outreach to potential higher-value donors and fostering relationships over time to deepen their engagement. A focus on ascending donors up the pyramid establishes a sustainable fundraising strategy, enabling your nonprofit to attain its goals and make a lasting impact in your community.
Here are the suggested column headings for your donor pyramid:
- Size of Gift
2. Prospects Needed
3. Estimated Solicitation Hours
4. Full-Time Solicitors Needed
5. Per Hour Effectiveness
6. Total Goal
7. Percentage of Goal
The only columns that you truly need are #1 and #2, but the rest add some important context for your work plan.
The initial column represents the gift size, scaling from modest amounts at the base to substantial ones at the apex. This seeks to cultivate a broad base of smaller donors and a limited number of larger donors at the top.
The second column indicates the number of prospects required at each tier. This is vital as it informs the campaign’s scale and scope. A robust pipeline of prospects at all pyramid levels is integral to sustained success.
The third column estimates the solicitation hours needed to secure gifts at each tier. It helps earmark the resources and manpower necessary for meeting fundraising goals and provides a roadmap for efficient resource allocation.
The fourth column shows the number of full-time solicitors required for campaign goals. It helps assess staffing needs and ensures adequate solicitors to support fundraising.
The fifth column measures the solicitor’s per-hour effectiveness. This key metric gauges fundraising team performance and helps identify potential improvements.
Fundraising inevitably incurs costs—necessary expenditures for soliciting donations. These can stem from using email services, subscribing to databases, hiring consultants, postage expenses, or even the cost of a simple coffee with a potential donor. While these amounts might seem minor, they accumulate. Here’s about what you can expect:
Consultants and technology: 15-20% of total budget.
Face-to-face fundraising: 5% of total project cost.
Telephone fundraising: 1% of total project cost.
Event fundraising: 50% of total project cost.
Cold mail fundraising: 100% of total project cost, and then reduced year-over-year.
Cold telemarketing fundraising: 100% of total cost, and then reduced year-over-year.
Re-solicit telemarketing fundraising: 35% of total costs for small and mid-sized gifts, in-effective for larger gifts.
Email re-solicit fundraising: 1% of total costs.
This streamlined approach provides an efficient, less repetitive, and straightforward understanding of anticipated costs.
When drafting our projections, we employ the following estimated response rates to advertisements and campaigns. These can guide your budget:
Face-to-face: 40%
Telephone: 20%
Cold Mail: 1%
Resolicit Mail: 5-10%
Cold Telemarketing: 4%
Resolicit Telemarketing: 30%
Internet Prospecting: <1%
Internet Resolicit: 1-5%
Consider revisiting your finance plan every quarter. This regular assessment ensures your monetary objectives remain aligned and allows for timely strategic adjustments. Through consistent scrutiny of your financial plan, you empower yourself to make well-informed decisions, paving the path towards a controlled financial future. Remember to keep your team apprised of financial developments periodically.
Here’s an outline of financial reports to consider:
Year-to-date Totals:
Total funds raised
Total expenditure
Cash on hand
Recent Totals:
Funds raised in the past quarter
Expenditures in the past quarter
Goals:
Progress (%): (Total funds raised / Campaign Goal)
Time Progress (%)
On track or off track?
Fundraising Efforts Report:
Meetings scheduled
Meetings completed
1:1 Email Conversations
1:1 Virtual Conversations
1:1 Phone Conversations
Making a pragmatic, fact-based plan like this can seem daunting, but even doing 20% of these exercises will put you and your organization on a more sure-footed path to success. If you are able to, please consider doing all of them. This method of planning is never a waste of time.