Building a Fundraising Strategy: Resources and Ideas

For a LOT of nonprofits (perhaps even most), their strategic plan for fundraising consists of two words: get money.

Someone comes up with an idea to run a gala, sell something, send out letters or emails—and that’s what they do. The method picked has a lot to do with who makes the suggestion and what that person has either done in the past or is comfortable with based on their personality. This isn’t to say that these are bad ideas. They certainly have the potential to raise money.

So, if you’re already getting revenue from what you do, is it even important to be strategic? And if you aren’t, will a fundraising strategy even help? The answer to both of these questions is yes.

While whatever tactic you came up with might meet your immediate needs, chances are you can raise even more money with some higher level, deliberate thinking—a lot of which you never consider as “fundraising.”

At Nonprofit Courses, we specialize in providing nonprofits like yours with powerful, on-demand training on a variety of subjects. Luckily, that includes strategic fundraising. We’ve put together this useful guide for professionals like yourself who are looking to up their fundraising efforts and create a more effective, innovative plan. Here, we’ll cover the following key steps and best practices for doing so:

• Craft a Detailed Fundraising Strategy Plan
• Explore Available Grant Funding
• Take Advantage of Corporate Giving
• Plan and Host Engaging Fundraising Events
• Emphasize Strategic Donor Cultivation Efforts
• Invest in Powerful Fundraising Software
• Train Your Team in Your Fundraising Strategy

Are you ready to learn more about building an effective fundraising strategy and raising the much-needed funds for your mission? Let’s jump in.

Craft a Detailed Fundraising Strategy Plan

The first step in building a fundraising strategy is to create a detailed fundraising plan that lays out your goals and how you plan to achieve them. And what’s a vital component of this fundraising plan? Your case for support.

Your case for support tells the world exactly why you deserve their money. It’s intimately tied to the most important part of your nonprofit: your mission. The case addresses key questions such as these:

• Why is your mission important?
• What happens if your mission is ignored?
• What are the benefits to those who rely on your mission?
• How does your mission impact the community at large?

Your “internal case” is a longer document that defines the need for funding your nonprofit–and nobody outside your organization may ever see it. What the public sees are the parts of the case that are relevant to how you are asking for money and who is getting asked–often called the “external case.”

But what all should be considered when crafting your overarching fundraising plan? Let’s look at the following elements:

People

No method of fundraising runs itself, so you need to start with your people–and specifically the willingness, availability, and skills they can offer. Willingness and availability often go hand in hand. The more enthusiastic about the mission of your organization, the more someone will be willing to help, and make their time available to you, regardless of their other commitments.

Skills are another story. The most enthusiastic person for your mission may not have the technical or soft skills required to handle a task. But don’t make the mistake of thinking that fundraising is only an extrovert’s game. Direct mail, online fundraising, grant-writing, and much of the behind-the-scenes work like properly recording gifts into your database and paying vendors are all made for introverts as well. The bottom line: everyone can play a meaningful role in your revenue generation program.

Infrastructure

Every fundraising method makes use of some sort of technology, whether in the act of raising money, in preparation for the activity, or after the gifts are made. Thus, it’s essential that you ask yourself whether your organization has sufficient tools in your toolbox to get the job done effectively, along with questions like these:

• What does your technology look like?
• Do you need to upgrade your software to handle more gifts?
• Do you need new technology to automate or streamline operations?
• And while you’re at it, how are your facilities?
• Does anything need a facelift before you bring in visitors?

A lot of what you’ll need depends on the method of fundraising you select, but it’s a good idea to begin asking yourself these vital questions early on in the process.

Policies

Creating policies before they’re needed has saved headaches for thousands of nonprofits worldwide. But what kind of policies will you need?

• Gift acceptance
• Donor recognition/acknowledgment
• Gift recording/entry
• Confidentiality and ethics
• Board giving

When you have specific documentation surrounding these instances created ahead of time you can ensure your processes are standardized and effective throughout your entire team.

Prospects

Who typically makes gifts to your organization? You have a choice here–dig deeper to find more of the same types of people or look for new prospects that are out of your traditional mold. Either way, you need to create a donor profile.

A donor profile is a specific description of the arch-typical donor you seek. For example, are they male or female? Where do they live? What is their income range? Be as detailed as you can. A profile doesn’t mean that you can’t or won’t seek money from the real-world people outside your imaginary ideal. But it does give everyone a model so they can spot the elements of your ideal donor immediately–and that can help you save time and raise more money for your cause.

Whether your prospects are already in a database or you’re searching for new ones, every prospect needs three attributes to make a gift: capacity, interest, and access (also known as CIA):

• They have to have the capacity to make the requested gift.
• They have to have an interest in your mission.
• You have to have access to them in whatever way you’re going to solicit the gift.

Without all three, you likely won’t get anything. If you do, it will be much less than what could have come to your organization. As you work with donors, your goal is to identify these attributes–and your database is where you store the information.

Goals

Fundraising goals typically come in two types: how many dollars you raise and how many donors you get. You might ask, “why should we care about how many donors we get as long as we get the money we need?” The answer comes in the form of another question: “Would you rather have one gift of $1,000,000, or a million gifts of $1.00?”

Getting one gift of $1,000,000 is great. The problem is that in most cases, it’s not going to be repeatable. That means you have to find another $1,000,000 gift next year, probably from somebody else. Million-dollar gifts don’t just come immediately–or easily. You have to work diligently to build these major donor relationships over time.

1,000,000 gifts of $1.00 might sound daunting too, but in other ways. To get that many, you probably need 4,000,000 prospects, and solicitations of that volume are going to cost a lot of money. The truth is that you need both–many small gifts supplemented by a few (or several) significant gifts. Big gifts give a huge boost to your program but take time. Small gifts don’t make as much impact but are more immediate. Both are required for a healthy fundraising strategy.

It’s important to keep in mind that fundraising is not a monolithic venture. It’s actually best made up of a number of fundraising programs to support your many mission needs. So, at this point, you need to determine exactly which programs within your organization require what kind of funding and where other funding might be available to support them.

For example, some of your programs may have a fee-for-service component, like tuition costs. In that case, charitable gifts will provide the funds required to make an excellent program where tuition might only fund a decent program.

Now, let’s say you come up with the final number for what you need. How are you going to get there? That’s where the scale of gifts comes in. A scale of gifts tells us how many gifts at each level are required to meet a particular fundraising goal–whether that’s your overall goal or a particular campaign.

Let’s go back to that $1,000,000 need. It’s not realistic to think that you’re going to get a single, $1,000,000 gift, nor is it probable that you’ll get a million $1.00 gifts. So what is realistic?

The scale of gifts, or gift range chart, sets up a pyramid of sorts that tells you that you’ll probably need at least one gift of $250,000, two or three at $100,000, a number of $50,000, $25,000, $10,000, and down the line. It’s also important to remember that for every gift you get, you’ll probably need four, maybe five prospects. Therefore, the scale of gifts will tell you how many people need to be on your list so you can meet your funding goals.

Now that you’ve compiled the various information that goes into your strategic fundraising plan, the next step is to match what you have in terms of mission, resources, intended prospects, and goals with be kind of fundraising method that will be most effective for your audience and organization. Let’s discuss a few best practices here:

Explore Available Grant Funding

Grant funding is one of the most well-known and effective ways of raising money for an organization. It all seems rather logical. Fill out an application; get money. Yet as you might expect, there’s a lot more to it than that.

For example, you have to be very specific about what you need and why you need it (remember the case for support, as discussed above). You need to carefully examine the requirements so that you are meeting the funder’s mission as much as your own. That said, you should be sure to vet potential grants carefully so you can choose to collect funding from like-minded institutions as yourself.

Probably most important, however, is that you have a relationship with the funder to the extent that the grant-giving institution allows.

Take Advantage of Corporate Giving

Even in today’s economy, businesses can be a good source of nonprofit funding. But you have to keep one thing in mind: what’s in it for them? It’s not that they don’t want to help or that they’re being greedy. It’s that every business, even of the “mom & pop” variety, is there to make money for their owners and employees. Thus, it’s important to look for opportunities to help them while simultaneously supporting your own organization.

For example, can your fundraising work drive customers to them? Can you increase their visibility within a targeted group, like the people who suffer from the disease your mission is determined to address? Do you supply their business with employees, or do their employees volunteer with or contribute to your nonprofit?

Just like with grants, corporate fundraising is built on relationships. Don’t expect that a business will give you money out of obligation or guilt. Longer-term support always stems because they want to support your cause and the constituents you serve.

Plan and Host Engaging Fundraising Events

Events are the stock and trade of a huge swath of the nonprofit sector. (Get a laugh from this clip from the Judy Garland/Mickey Rooney movie classic, “Babes in Arms.” Does it remind you of a nonprofit committee meeting?)

The good news is that even when people can’t be in the same room, a lot of people want to be seen with each other, supporting a good cause. In their seminal book, The Seven Faces of Philanthropy, Karen Maru File and Russ Alan Prince came up with a name for them and their giving profile: the Socialites. They want to have fun while doing good.

For a nonprofit, a major attraction for special event fundraising is scalability. You can do an intimate dinner party around a dining room table, or a walk-a-thon for thousands. You can make it a black-tie event at a high-end art exhibit, or a beef ‘n beer at the local firehouse. Special events are great ways to deliver messages about your mission while also raising money for your cause–just don’t forget to collect the names of everyone attending so you can connect with them later.

Emphasize Strategic Donor Cultivation Efforts

In any fundraising method, relationships are key. And the fundraising-ese word for building relationships with donors? Cultivation. And effective fundraising requires strategic cultivation.

This means keeping the end goal in mind. Fundraising experts David Dunlop and Buck Smith developed a system known as Moves Management, which assigns roles to staff and volunteers who carry out specific cultivation steps that lead to a gift. These steps can be highly targeted to a donor for a single gift, or broadly applied to many donors simultaneously.

The whole idea is to be intentional and make every contact with your donor or prospect lead to a solicitation. This makes a lot of sense, yet most fundraising cultivation, even for the biggest gifts, is based on ad hoc activities that are made up as the process evolves. Being strategic with your cultivation efforts can save a lot of time, build confidence in your staff and volunteers, and lead to much more significant funding from whomever you ask.

Invest in Powerful Fundraising Software

“Make the list, work the list.” The better list you have, the better you’ll be able to match your prospective donor with your nonprofit’s need, estimate the appropriate gift amount, and make the ask. The idea is that every gift should be a win-win for both the donor and the nonprofit. Fundraising software is key in making that happen.

Donor management software like Bloomerang, CharityEngine, Lumaverse and so many more are available at a wide variety of price levels, with capabilities that will amaze. There is absolutely no reason to use manually updated spreadsheets to build your own donor database for tracking supporters, their gifts, and their attributes.

Further, online giving solutions like Snowball, Donately, and Salsa Labs can help you collect and process donations from any number of supporters with ease.

Train Your Team in Your Fundraising Strategy

Training your nonprofit team in your fundraising strategy is an important part of the fundraising process. In doing so, you’ll boost your staff and volunteers’ confidence in you by communicating your plan effectively. Then, each member will care about your mission, see their own role in your success, and work to see it succeed.

Sharing your strategy shows every member of your team–from the CEO and the board of directors to the marketing interns–that fundraising is a priority within your organization. A plan means that you’re on a mission on the move, but it’s not likely to be an effective and actionable plan if every player doesn’t understand their part.

Luckily, there are a ton of free and low-cost nonprofit fundraising resources available to organizations like yours. If a member of your team is unsure how to begin the prospect research process, encourage them to take an online course on the topic. If your volunteers are lacking the skills required for successful donor outreach, be sure to equip them with the powerful educational resources they need.

Ready? Now get started!

You can do this… you have to do this! Building a fundraising strategy isn’t optional if you want to be more effective in your fundraising and the pursuit of your overarching cause. Your mission is too important not to plan for, and your staff and volunteers deserve the guidance that a carefully laid out plan will bring. After all, a strategic fundraising plan is a cost-effective, time-efficient way to raise money for your organization. It’s like our mothers told us: well started is well done–so get it done!

For more information on strategic fundraising and overall nonprofit operations, be sure to check out our other educational resources:

• 21 Free Nonprofit Webinars to Further Your Career Today. These free educational webinars can provide you with key insights into the nonprofit realm–including on topics like fundraising, grant-writing, and marketing.
• On-Demand Nonprofit Staff Training makes a Major Difference. Learn more about the power of on-demand training for nonprofit teams and how it can bring your professional development to the next level with this guide.
• Strategy for Nonprofit Organizations, by MindEdge. By understanding a nonprofit’s strategy and how it helps the organization fulfill its mission, a manager can do a better job implementing the strategy.
• Nonprofit Capital Campaign Success, by Lorman A step-by-step process will describe ways to ensure success – in fact, to guarantee it.