How to Create a Nonprofit Fundraising Plan: A 10-Step Guide
Planning a fundraiser can be challenging. Regardless of the size of your nonprofit organization, creating a nonprofit fundraising plan is essential to driving financial success, securing new funds and attracting new donors.
With a fundraising plan, you can establish a clear vision and take effective, actionable steps towards achieving your goals. And when problems occur, you’ll have the right tools to make things work in your favor. In this guide, we’ll teach you how to create a nonprofit fundraising plan and leverage membership management software, so you can hone in on your vision and achieve your fundraising goals.
What is a Nonprofit Fundraising Plan?
A fundraising plan outlines your organization’s activities over a set period of time and strategies to handle each project. Fundraising plans usually cover one fiscal year.
Your fundraising plan is essentially your logistical, financial and marketing guide. It gives you a clear reference for all your goals, campaign strategies, important dates, donor networking plans and stewardship initiatives. It also allows you to keep track of your tasks, hold your team accountable and pinpoint any areas where you and your team are lagging behind.
Why Do You Need a Fundraising Plan?
Here are three ways a fundraising plan could help your organization:
1. It Allows You to Set Clear Expectations
With a fundraising plan, you can set clear expectations for everyone in your organization – from your board members and staff down to your volunteers. You can detail what tasks must be done by which dates, as well as the results you anticipate in each phase of your plan.
Essentially, a fundraising plan gets everyone on board and keeps everyone on the same page. If things go awry, you can refer back to your plan to make sure you get back on track.
2. It’s a Way to Combat Reactive Fundraising
Far too often, nonprofits fall into the trappings of a reactive approach to fundraising, especially when it comes down to donor engagement and stewardship.
Think about how your team behaves when a potential donor comes knocking at your door or calling on the phone – are you scrambling to provide them with more information? Or do you know exactly what to share with them and the steps to take to get them involved and keep them engaged? More importantly, are you only reacting to donors when they come to you, or are you proactively seeking new ones and finding ways to encourage donor loyalty and retention?
3. It Improves Overall Team Performance
Think of your fundraising plan as a map for your team. Your fundraising plan acts as a guideline to help your team find the most efficient ways to get to your destination, and in this case, the fundraising goal. When all of that is clear, you save a lot of time and energy for everyone. As a result, you can avoid staff burnout and keep your team feeling less stressed and more energized. On top of this, you and your team will have more time and energy to focus on other essential tasks too.
10 Steps to Writing a Nonprofit Fundraising Plan
Fundraising can be an overwhelming project, but it’s easier to tackle if you take it step by step. Here are the 10 steps to a successful nonprofit fundraiser:
1. Review Your Financial Records and Consider Labor Costs for Fundraising Efforts
Last year’s financial records hold many critical insights about what you did right, what went wrong and how you can improve in your next fiscal year. One of the most important things you should look into when reviewing previous finances is your revenue sources. Find out which revenue streams generated the most funds with the least effort, and replicate the strategies involved in securing them.
An important part of this process is analyzing cost/benefit data about how much human work is put into each fundraising activity. So rather than just looking at the funds an event generated and its direct expenses, don’t miss the big picture. For example, some organizations are guilty of hanging on to certain labor-intensive, marginally profitable annual events simply out of tradition when there are alternative events or fundraising activities that bring in more money with more ease. As part of your analysis, quantify how much staff and volunteer time went into organizing, planning and running each event. If that kind of data isn’t available to you, make time tracking among staff and volunteers a part of this year’s fundraising processes. Calculate the hourly rate for each employee involved in the event, multiply their number of event-related hours times that rate and then subtract that number from the bottom line of the event to see the full story of the event’s fundraising outcome. For example:
- Employee X makes $50,000 per year including benefits and taxes and averages about 45 hours per week. ($50000 / 52 weeks = $962 per week. $962 per week / 45 hours = $21 per hour)
- Employee X spent 200 hours planning and executing the annual fundraising event, so the number to add to the event expenses is $4200 ($21 x 200)
- Repeat the calculation for additional employees who worked on the event to come up with a list such as this:
- Annual Gala Event Employee Labor Costs:
- Employee X – $4200
- Employee Y – $3500
- Employee Z – $1900
- Total: $9600
- Annual Gala Event Employee Labor Costs:
Even if volunteer labor was heavily used, consider if that labor could be better leveraged in another way. Some of your volunteers like board members may charge more than $100 or $200 per hour for their services in a professional capacity. Their time should be valued and well-spent. That said, before you decide to cancel an annual event, do consider that some events are important community gatherings that build goodwill and gain media exposure for your nonprofit.
Once you have an accurate picture of the fundraising strategies that are the most profitable, consider the types of donors and revenue sources that weren’t factored into the past year as much and recalibrate your strategy towards securing these in the coming year.
Some important revenue streams include:
- Individual and mid-level donors
- Major donors
- Corporate philanthropy and partnerships
- Donor-advised funds
- Private foundations and grant-making public charities
- Earned income streams or fees from services and product sales
- Sponsorships (both for events and special projects such as a podcast series)
- Ticket sales
2. Be Clear About Your Mission, Vision and Values
Brainstorming ideas for fundraisers may be fun, but you can easily lose the core of your organization’s messaging in the process. To make sure your efforts don’t stray from what your nonprofit is ultimately trying to achieve, consider revisiting your organization’s mission, vision and values. Then work to align your fundraising efforts to these tenets.
Not only does this help your team stay on track with the rest of the organization, but it also helps you connect and communicate more effectively with potential donors and partner groups.
Here are some questions you should ask yourself:
- Why does my organization exist?
- What issues are we committed to solving or alleviating?
- Why do these issues matter?
- Who are the types of people we wish to impact with our services?
- What kind of impact do we wish to make in our community?
- What makes us unique as an organization?
Besides knowing your mission, vision and values, you should also learn how to convey these across all your marketing and communication materials and channels. Remember: people give money to causes that they can connect and relate with. If your mission isn’t clear, you will struggle to find people willing to dedicate their time and money to your cause.
So how do you go about this?
- At fundraising events, communicate the ways previous donations have helped your cause or constituents. If appropriate, show photos and videos of the achievements you’ve accomplished with the funding received from donors. This will boost confidence in your organization’s capabilities to carry out your promise and show the tangible fruits of one’s contributions. Don’t be afraid to provide the numbers as well. Personal video stories from beneficiaries, members and even volunteers can be highly motivating for donors.
- Include your mission statement in solicitation letters, email newsletters and invites. Go out of your way to remind people why you do what you do.
3. Study Recent Fundraising Trends
With the coronavirus pandemic, nonprofit fundraising efforts had to be moved online. While this proved to be a massive challenge for organizations that secure their funding primarily from live events, it also sparked new fundraising trends, such as increased interest in corporate giving, virtual events and a focus on mobile-first strategies.
But why is all this important? The nonprofit sector is changing every day, and thanks to digital technology and the emerging Gen Z workforce, it’s changing fast. You want your organization to stay fresh and relevant so that you’re able to really connect with your target audience while also getting the attention of new markets.
4. Set SMART Fundraising Goals
Your main fundraising goal is to keep your operations going. You can figure the number you need to achieve by looking at your previous costs or learning from similar organizations.
It’s also important to have smaller goals that you can hit on the way to your big target. This can include boosting reach and engagement online, acquiring new recurring donors or expanding your team size.
One of the methods a lot of nonprofits use in setting fundraising goals is the SMART method:
- Specific: It’s important to create specific goals because you need to make sure everyone is 100 percent on board with your plan. Leave no room for error or miscommunication! Ensure that all stakeholders understand why they exist and how they can help the organization attain its main objective.
- Measurable: Goals need to be measurable because you need clear indicators for success. After all, how will you know if you’ve achieved your goals if you have nothing to measure your performance by?
- Attainable: Attainability is paramount to success as realistic goals are better than lofty ones. While it’s good to have high expectations and challenge your team, you also have to think about whether you have the resources, staffing, and time to achieve your goals.
- Relevant: You need to make sure your goals are relevant to your organization’s mission and vision. Apart from this, ensure that you prioritize the right goals at the right time. Simply put, be systematic about which goals to prioritize at the moment.
- Time-bound: This simply means creating realistic deadlines for your goals.
5. Budget Your Activities
Your overall revenue from your fundraising projects should exceed your total cost. To make sure you don’t overspend on your campaigns, it’s important to be meticulous about your budget. In a very basic sense, your budget should account for your revenue streams and your expenses. It may seem intimidating, but you can find tons of guides and templates online.
Some nonprofits start with an event budget of $0 and depend upon securing sponsorships, ticket sales and donations to cover the cost. This “zero-based budgeting” method that requires that all expenses must be justified and that the income raised for the event will at minimum cover the cost of holding the event.
We already provided some examples of revenue streams above, so here is a list of expenses you can expect to incur for your fundraising activity:
- Location costs: Space rentals, use permits, sanitation, and security
- Administrative costs: Office expenses, website management, membership management software, deliveries, mailing, etc.
- Production costs: Light and sound equipment and management, stage managers, production assistants, technical teams, etc.
- Labor costs: Labor costs can be calculated as shown in item #1
- Food and beverage costs: Catering service and staff, table and chair rentals, permits to serve food, etc.
- Advertising and marketing costs: Social media management, photography and design work, publicist costs, live event hosting, etc.
- Travel costs: For coordinators, hosts, performers and special guests
- Insurance: For staff, volunteers and the organization itself
- Decor: Streamers, plants, table centerpieces, signage and other decorative items
- Miscellaneous costs: Printed material such as programs and invitations, prizes, tokens for guests, etc.
6. Develop a Funding Strategy
Next, you’ll have to develop a funding strategy based on your goals for the year. It can be tempting to rehash the same fundraising strategies from the past. But 2020 has completely changed the landscape for fundraising. We expect much of the same trends that proliferated last year – live-streamed events, digital-first strategies and reduced in-person interactions – to continue throughout 2021.
With that being said, it pays to be strategic about targeting a broad range of donors. While the focus is often set on major donors, don’t rule out the potential to generate a lot of revenue from mid-level and even individual donors. Today, individuals are becoming increasingly interested in social issues, and thanks to social media and digital money transfer apps, it’s never been easier to learn about and contribute to a cause.
Here are some modern fundraising strategies that fit right into 2021:
- Peer-to-peer fundraising: As we’ve been forced to isolate throughout the past year and a half, people are finding new ways to connect digitally. One interesting trend that has gained a lot of traction over this period was peer-to-peer fundraising, which involves individuals who create personal fundraising pages on social media on behalf of a cause.
- Virtual events: Until the concept of face-to-face conferences and concerts are enthusiastically received, nonprofits are finding virtual events to be an effective alternative. The best part about them is that they’re virtual – anyone around the world can attend. But be weary Zoom fatigue; many professionals who have worked from home for the past year are “Zoomed out” and need highly compelling content, presented in a tight timeframe to get them to return to a screen after work hours.
- Mobile-centric email marketing: 81 percent of emails are opened with a mobile device. But, if the contents of that email (e.g., the link to your donation page) aren’t optimized for mobile, that lead is at risk.
7. Connect With More Donors
Getting more donors requires looking back at your organization’s past performance and amplifying the strategies that brought in the most revenue. If you felt that your past strategies were lacking, consider the following:
- Be clear about your vision: It’s important to have a clear understanding of your organization’s vision and mission. Make sure that your email newsletters, social media materials, and landing pages all put these messages across so that more people can connect with your cause.
- Be specific about where donations go: Supporters like knowing where their money goes. But when donating is mainly done online these days, it can be challenging to connect with a cause on an emotional level, especially if it isn’t clear who is benefiting from donations.
To help with this, try to be as specific as you can about how a donation can help a person or community in need. For example, if you’re donating hygiene kits to far-flung communities, don’t just ask for donations – specify how much money it would cost to build one kit. And when people donate, let them know how many kits they were able to provide. That way, they can visualize the number of people or families they helped.
8. Include Donor Stewardship in Your Plan
Acquiring new donors is only half the battle. You also have to remember to take care of the donors that you already have, building a strong enough relationship where they feel like a part of your community. According to Philanthropy News Digest, this concept of donor stewardship is about “turning first-time donors into loyal, recurring donors.” For an effective donor stewardship plan, Philanthropy News Digest says you have to learn how to analyze existing donor data, motivate your donors through acknowledgments and promote corporate matching fundraising campaigns.
Some organizations put a major focus on donor stewardship for the purpose of securing major gifts from family trusts or foundations as well as donors through their estate plans or wills. This strategy is a long game and sometimes gives the donor the opportunity to have a program, award, scholarship, room or even a facility named after them. The tending of these donors requires a high touch frequency in addition to heartfelt dialog between the donor and the organization to uncover what they want their legacy to be and how the nonprofit can help them achieve that goal.
9. Assign Roles
Once your plan is done, it’s time to build your team. Of course, it’s important to get to reliable team players who are good with deadlines. But it’s also equally vital that you look at each prospective member’s strengths, weaknesses, time and networks.
Some of the roles you may need to fill include:
- PR manager
- Social media manager
- Finance manager
- Fundraising campaign managers
- Logistics team
- Donor acquisition manager
- Donor stewardship manager
- Project manager
- Major gifts coordinator
- Development manager
- Event planner
10. Create a Fundraising Calendar
Finally, don’t forget to create a timeline. Like the budget, you can find tons of templates online. You can also fill out a calendar with the most important dates and deadlines and share it with everyone on the team.
- Overestimate the length of time it will take to finish a task. Even if you trust your team to accomplish tasks before the deadline, plans can easily be derailed. Always have a soft deadline set a few days to a week before you need the task done. This is especially important if you are using volunteer labor as volunteers will often consider their volunteer tasks as the first things to let go of if they are stressed or overworked elsewhere in their lives.
- Include time for tracking and evaluating fundraising campaigns and events. A wrap-up meeting can serve this purpose. Ideas and lessons learned will be most fresh in everyone’s mind right after an event. Attendee surveys are a best practice and are helpful tool in the evaluation process as well.
Fundraising is an essential part of nonprofit work. Keep a clear and systematic fundraising plan to make sure that you’re on track with your goals and able to reach your targets within the year.