Just as a bee makes honey to survive through the winter, so must every nonprofit raise money to accomplish its goals and to survive. But nonprofits have an advantage over bees -- we can (and must) raise money all year! This is often a hard truth for the board of a small nonprofit to internalize and act upon, but it is absolutely essential for an organization’s survival. The organization that puts all its energy into issues, and neglects to stock the financial honeycomb, will surely starve in short order. And to insure that our nonprofits make honey at every possible opportunity, every organization needs to formulate an annual fundraising plan.

Getting Started

When formulating a fundraising plan, it is important to get input from board, staff, and volunteers. Hold a special meeting of your organization to gather input and brainstorm. It is very important to get your board and staff involved in this process from the beginning so that they will take ownership. Some organizations delegate this function to a Fundraising Committee, but with small organizations, it is better to involve the entire board. Without board and volunteer involvement in fundraising, most organizations wither and die. Fundraising must be a shared responsibility. If you have board members who say that they just don’t do fundraising, the board needs to consider whether those unwilling members’ contributions are so important as to merit exemption from this important board obligation. Morale will be high if everyone pitches in, but if only a few board members shoulder this important responsibility, morale may suffer.

Setting Annual Goals

There are two approaches to establishing an overall income goal for your fundraising plan. The first involves putting together an expense budget and using the total expense figure (plus a small additional amount to serve as a modest surplus) as your fundraising target. The second is to look at last year’s income, analyze this figure to see if it includes any special income that might NOT be repeatable (such as a bequest or a one-time memorial gift), then increase this figure by a modest amount to allow for reasonable increases in most of your fundraising categories.

You can do an even better job here if you put together a fundraising history for your organization. Look at income over the past several years. As you compare numbers from one year to the next, and look at trends in each income category, you will see definite patterns emerge which will give you a good idea of how much of an increase it is feasible to project for the upcoming year. Later, once you have laid out the specific strategies and monetary goals for each fundraising activity, you may adjust this figure slightly. In the mean time, this figure-analyzing process will give you an overall number to shoot for.

Consider Your Assets

Assets are not always monetary. In putting together your fundraising plan, you should consider any special fundraising assets that your board, staff, or volunteers have to offer. For example, perhaps someone on your board owns a whitewater rafting company, a restaurant, or a beautiful country home. Think about how you can use these special assets in your fundraising plan. Here’s an example of how you would incorporate one of these assets into your plan:

Other examples of the kinds of fundraising assets for which you should look include: people with special talents (writers, artisits, singers, etc.) who might be willing to do workshops/benefits, people with access to good mailing lists which you might use in member recruiting, business owners who might donate items for a raffle or premium, a strong corps of volunteers willing to sell tickets for a raffle, etc. A good way to go about taking an inventory of these assets is to set aside some time at the initial brainstorming session mentioned above specifically for this purpose. Get one board member who understands this concept to list a few assets s/he might be willing to contribute, then brainstorm or do a “round robin,” asking each board member to list his/her own assets.

Integrate Fundraising with Other Activities

Your fundraising plan should fit together hand in glove with your annual program/action plan. Develop a fundraising plan that maximizes your program goals. For instance, if one of your projects is to develop a river greenway that will not only improve the quality of life in your town but will also attract tourism and make your river healthier, be sure to include within your fundraising plan a strategy to recruit business memberships, since the business community will very much appreciate the benefits your organization’s project will have for the town. Also, consider reaching out to civic associations. By connecting with them, you will be achieving your project goal of increasing stakeholders, plus you will be raising money at the same time. If you are planning an annual meeting to inform the community about your organization, consider incorporating a fundraising element, such as a live (or silent) auction, a dinner, a raffle, or a concert, into that program activity. For almost any program activity you plan, you should be able to come up with a fundraising activity to complement it.

Keep it Simple!

But we are getting ahead of ourselves. Remember that you want to select a few fundraising strategies, not dozens! So sort through the ideas generated at your meeting, look over your list of fundraising assets and your annual program plan, and begin to select those fundraising strategies that will be reliable year after year, bring in money for your core operations, maximize the return for your efforts, best accomplish your goals, and be most complementary to your program. A list of questions you should ask yourself as you select your strategies is as follows:

1. Does this strategy fit with the mission of our organization?
2. Does this strategy represent a stable (repeatable) source of income?
3. Does this strategy build our organization/staff/board/volunteers?
4. Does this strategy contribute to growing our core operating budget?
5. Is this strategy cost effective (does it bring in at least twice what it costs)?
6. Can this strategy be integrated into program activities already planned?
7. Has this strategy worked well for us or groups like ours in the past?
8. Does this strategy take advantage of our special fundraising assets?
9. Will our target constituencies respond well to this strategy?
10. Timing: does this strategy fit well with other activities we have planned?
11. Do we have the skills/expertise we need to carry out this strategy?
12. Do we have the resources (money, people) to carry it out?
13. Are there other benefits accruing from this strategy beside money? (media exposure, good will, etc.)

Pick those strategies with the most “yeses” and incorporate them into your annual plan. If your organization is new, it is probably best to concentrate your efforts on building a base of individual members; finding a few key businesses and foundations who will make major gifts; organizing one event that will generate funds, involve the community and perhaps provide media exposure for your group; and exploring local and state funding sources for your organization, such as the local chamber of commerce, the local United Way, area churches, or state and regional agencies. As your organization grows, you can expand your strategies to include a major donor program, a series of special appeals, a workplace giving strategy, a bequest strategy, and other more sophisticated activities.

The key here is to break down your fundraising plan into bite-sized activities that are attainable and realistic and then to detail the monetary sub-goals, action steps, responsible person or persons, and timetable for each (don’t forget to estimate costs and be sure to incorporate those costs into your budget). For example, here’s what a fundraising strategy for building membership might look like:

Identify Your Prospects

In order to make your fundraising plan as realistic as possible, it is important that you list your funding prospects. If you are planning to recruit new members, list the prospective mailing lists you will use and the number of individuals on each list. If you have targeted a certain amount of money from corporations, list those corporations and how much you plan to request from each. If you are budgeting foundation income, list each foundation you think might fund your organization.

To be even more precise in your forecasting, particularly with foundations, corporation, and government agencies, make a chart showing the names of each funding prospect, followed by the amount you think you can request and a rating (I use a percentage) to indicate your best estimate of what your chances are of getting a gift. Next, multiply the amount requested by the rating. It may take a little time to develop your skill at rating your prospects, but with practice your forecasts will become uncannily accurate. My own system is to give foundations which have given before a 75-80% rating, those which are new but where I have a good contact a 50% rating, and new foundations which seem to be good targets but where I have no contact a 10-20% rating. If you have done your estimates well, the resulting figures will give you the total amount of money you can expect to receive from that particular
funding source. For example, your foundation forecast chart might look like this:

This procedure takes time and effort, but provides a critical reality check for your fundraising planning!

Timing is Important: Make a Fundraising Calendar

In creating a fundraising plan, it is important to spread out activities over the entire year for a number of reasons:

1. Scheduling at least one major income-producing activity per quarter(or better yet, per month) will insure that you will have a steady stream of income rather than having funds arrive in big bursts or all at once at the end of the year;
2. By spacing out the fundraising work, you will do a better job on each activity and be more likely to accomplish the goals your group sets;
3. The organization will establish a “fundraising culture” which regards raising money as an on-going, day-to-day part of activities. This puts you at an obvious advantage over groups with a “crisis mentality” who put fundraising off until there is no money, leaving themselves in the worst possible position to do effective fundraising

Moreover, certain fundraising activities just naturally lend themselves better to certain times of year. Establishing an annual calendar for fundraising will allow you to carry out these activities at the optimal time of year and obtain the best possible results for your efforts. For example, if you are planning a river festival or river trip, the spring or summer will probably be the best time of year; the best time to mail out a request to join is probably in January-March, or September-November; if you are looking for foundation support, you should start early in the year (or even at the end of the preceding year) because the whole process, from initial research to approved grant, can often take 9 months; and putting together a good raffle should probably start in April or May, to take advantage of the summer months for selling the tickets.

Once you have put together your fundraising calendar (or concurrently), you will want to compare and integrate your fundraising activities with your program activities so that you take advantage of the latter for fundraising and at the same time avoid overtaxing your staff and volunteers by scheduling too many major efforts at the same time.

Avoiding overdependence

One important aspect of fundraising planning we have not touched on is balancing the plan so that the organization is not overly dependent on one, or several, sources of funding. In the nonprofit world, changing economic, political, and social conditions can severely impact funding, particularly government and foundation grants. Moreover, some funders, particularly foundations, can be fickle, and do not always fund the same organization year after year. Finally, no nonprofit wants to put itself in a position where it has to choose between taking an unpopular but necessazry action to fulfill its mission (such as bringing a lawsuit against a polluter) and alienating a critical funder or community of funders. Organizations that get all, or most, of their funding from one or two big government, corporate, or foundation grants, are incredibly vulnerable to the winds of change. A good rule of thumb here is that groups should diversify their funding bases and avoid having more than one-third of their income coming from any one source or category of funding. The risk can be further diluted by diversifying within each category, as well. For example, a group that has half its income coming from foundations, but has ten different foundations giving it money, is obviously much less at risk than a group that has one big foundation grant. Groups should bear this in mind as they develop their plans, and choose strategies that build the capacity and sustainability of the organization., such as building a base of individual members, developing a major donor program, or creating a “signature” special event.

Another way to counteract the potentially harmful effects from the loss of a major funding source is to use the more volatile sources of funding to fund projects, and raise the core “operating budget” of the organization from more reliable sources such as memberships and major donors. This way, if a big grant is not renewed, the project can be terminated without having to lay off essential staff.

Being Realistic

In general, it is best to budget revenues conservatively and then seek to exceed your budgeted goals significantly each and every year. This may mean making your publicly announced “campaign goals” in certain categories such as corporations and major donors at least somewhat higher than your actual budgeted goals. Being realistic here allows you to establish a culture of success, of doing what you say you will do. You should have a great degree of confidence that you can reach your budgeted goals with steady, well-planned work. Meeting and exceeding these goals will give your board and funders confidence in your fundraising and management skills and make your job with both of them a whole lot easier.

Planning for a surplus

In creating your fundraising plan, which is really your revenue budget with goals, strategies, and action steps attached, it is important to always plan for a surplus—a little more income than expenses. There are several good reasons for this. First, it gives you a little cushion to fall back on in case you don’t reach one or two of your income targets. Second, it looks good to your funders and board members and encourages them to see you as fiscally responsible and savvy. There is nothing worse than running a deficit—it makes funders nervous about the viability of your organization and turns perfectly nice board members into fierce micro-managers. Third, it makes it possible to begin to build up a cash operating reserve for the organization, something every nonprofit that is serious about sustaining itself for the long haul needs to have.

Approval and Implementation

After you have refined and polished your plan, take it back to your board or committee for approval. Remember, their buy-in is crucial. Once approved, you must implement the fundraising plan. The secret here, as in your action/program plan, lies in having one person, usually the leader of the group, but sometimes the head of the fundraising committee, coordinate and follow up on the various action steps. One nice thing about fundraising -- the results are tangible and easy to measure. If the treasurer of your board reports each month on the income and expenses of the organization, this information will provide a direct measure of how well people are carrying out their parts of the fundraising plan.

I have found that it is extremely helpful to get everyone involved in the fundraising process (Executive Director, Development Director, Board Fundraising Chair, Program Director, etc.) together in person or by phone monthly or quarterly. The group can review what has happened in fundraising and what needs to happen next. These meetings will help establish accountability and prevent missed deadlines. Be sure that someone is responsible for taking minutes at the meetings and for reminding people what they have agreed to do.

Revising Your Fundraising Plan

The fundraising plan should be a dynamic and ever-changing document, not one set in stone. It can be modified as results come in, added to when new opportunities arise, etc. However, it should be taken very seriously and referred to regularly to check progress and make sure that what needs to happen occurs in a timely fashion. With environmental nonprofits, most of the energy is usually focused on accomplishing project-oriented results, and this is as it should be. But this cannot be done at the expense of the fundraising activities, or the organization will suddenly find itself without any fuel to power its engines. The fundraising plan is a tool that the board and staff can use to monitor results and predict, and hopefully avert, crises before they happen.

Increasing Your Revenues

To increase your income, think about new activities you might undertake, or new activities you might add to existing categories to generate additional income. For example, is this the year you should initiate a major donor program? If you are already doing an end-of-the-year appeal, should you add another appeal in the spring to take advantage of a program activity you will be carrying out then? Are there new foundations or corporations to which you can go this year to solicit grants? Could you add a silent auction to your annual fundraising dinner party? Think also about asking your members to upgrade their gifts or about increasing your dues amounts. Many organizations continue asking their members for the same duest year after year. Once people have become “habitual” givers (a term used for someone who has given to an organization two or more years in a row), you should occasionally ask them to increase their gift to a higher giving level.

Recruiting Volunteers to Help

There is an old saying that making things happen is 10% work 90% attitude. The staff and board will need to cultivate the right attitude towards fundraising in order to recruit others to help deliver the goods. If you market your fundraising program as achievable, simple, and actually fun, you will find it easy to gather those “many hands that make light work.” Furthermore, if lots of people are recruited to do a small job that will fulfill a particular goal, you are less likely to burn out your star fund-raisers. Remember, volunteer help won’t just appear automatically. As part of your plan, ask your staff and board to take responsibility for recruiting others to help.

Conclusion

Fundraising planning is an essential part of any effective fundraising effort. Having a plan will provide you with a basic map to follow throughout the year, allow you to assign responsibility to others, and break your work down into bite-size tasks which you can reasonably accomplish. It will also give you a way to effectively communicate your plan to volunteers and staff so that they can effectively participate in these efforts. Don’t neglect this important foundation for your fundraising efforts.