Building a Fundraising Plan

Problem: If a nonprofit doesn’t have a clear plan for its money, board members might worry that the organization won’t be stable.

Solution: By making a detailed finance plan that explains the mission, sets smart goals and budgets, engages donors, and tracks progress, the board will feel confident that the nonprofit is on a solid financial path.

The finance plan is for the board, not the development department. It’s to reassure EDs and Board Members that the organization has a robust plan to continue down a path of financial stability. Here is what your board will expect.

Tool:

Confirm Your Mission and Goals

Clarify Purpose: Begin by revisiting and clarifying your mission. A well-defined mission serves as the foundation of your fundraising strategy and connects donors to your purpose. Make sure every team member can articulate this mission, as it should shape all outreach and fundraising activities.
Define a Clear Fundraising Goal

A single clearly defined fundraising goal, aligned with the non-profit’s mission and strategic plan. Expectations around realistic and ambitious targets.

Define additional KPIs and OKRs

Make them SMART

Specific: Increase recurring monthly donors.
Measurable: Target 50 new monthly donors.
Achievable: Make sure this goal is reasonable given your resources.
Relevant: Ensure it aligns with overall fundraising needs.
Time-bound: Aim to achieve within 6 months.

Set goals with a mix of short-term and long-term targets, including “stretch goals” that go slightly beyond the primary target.
Present a visual roadmap of how these goals will advance the mission over time.

Budget Breakdown

An itemized budget showing how funds will be used, detailing both fundraising costs and expected ROI.
Show a breakdown of costs per dollar raised to demonstrate efficiency and effectiveness.
Provide a flexible budget proposal that includes high and low estimates to manage different funding scenarios.
Include a proposal for any surplus, to show forward-thinking financial planning.

Build a Donor Engagement Strategy

This is a strategy for identifying, engaging, and retaining donors, especially key supporters and recurring donors.
Understand Your Audience

Segment Donors: Use data to break down your donor base into categories based on characteristics like giving frequency, gift size, demographics, and interests. Example segments include:

Loyal Donors: Supporters who give consistently every year. Focus on deepening their commitment with updates on their impact.
New Donors: Recently acquired donors. Provide a warm welcome, educational materials, and involvement opportunities to retain them.
Lapsed Donors: Donors who haven’t given in a while. Send tailored messages encouraging them to reconnect.
Prospective Major Donors: Those with high giving potential. Cultivate these relationships through personalized outreach and detailed impact reports.

Analyze Past Giving Behavior: Dig into data on gift frequency, preferred donation methods, and channels that attract the most engagement. This analysis can highlight trends, such as increased giving during specific campaigns, which helps to refine future appeals.
Identify Potential Donors: Create “donor personas” by profiling potential supporters who align with your cause. Consider factors like income level, age, values, and philanthropy patterns. Target potential corporate partners and grantmakers, identifying areas of alignment with your mission and cause.

Outline specific tiers of donor engagement and the anticipated ROI from each group (e.g., small, medium, and major donors).
Introduce innovative engagement methods like donor appreciation events, personalized thank-you videos, or exclusive program updates for different donor levels.
Suggest new engagement tools

For example, a digital tool that gives donors real-time updates on the impact of their contributions.

Include a Compelling Case for Support ()
Develop a Multi-Channel Fundraising Strategy

Demonstrate clarity on the methods to be used (e.g., events, online campaigns, grants) with supporting rationale for each approach.
Provide data-backed insights on each method, including potential impact and alignment with board priorities.
Direct Mail: Direct mail is effective for older donors or those with a history of responding to mail appeals. Personalize letters, use compelling imagery, and add handwritten notes or signatures for a personal touch.
Digital Campaigns: Develop a robust online presence through email, social media, and website appeals. Segment email lists for targeted messaging, use analytics to track engagement, and refine messages based on what resonates. Create regular social media content that highlights your mission and inspires donations.
Events: Organize annual or semi-annual events, either in person or virtual, depending on your donor demographics. For example, host virtual donor appreciation events or in-person community gatherings to build deeper connections.

Consider suggesting collaborations with like-minded organizations for larger, co-hosted events or campaigns that raise visibility.

Monthly Giving Program: Monthly gifts ensure a steady revenue stream and increase donor retention by encouraging supporters to commit to a recurring contribution. Offer donors a sense of “membership” with exclusive benefits, such as behind-the-scenes updates or a quarterly newsletter.
Major Gifts and Legacy Giving: Build relationships with potential high-net-worth donors through personalized approaches. For legacy giving, offer resources on planned giving and emphasize the lasting impact their legacy can have on future generations.
Experimental: Propose pilot-testing new fundraising ideas (like social media fundraisers or crowdfunding) and measure results for consideration in future plans.

Timeline and Impact Milestones

Create a clear timeline with key milestones to monitor progress, keeping the board informed of fundraising phases and checkpoints.
Include both “soft” and “hard” milestones with specific indicators, giving the board clarity on expected progress.
Conduct mid-point reviews with the board for feedback and to adjust strategies, making the board feel included and in-the-loop.
Write detailed projections on how funds raised will translate to measurable impact for the non-profit’s mission.
Break down impact into per-dollar metrics, e.g., “$100 helps X beneficiaries” or “$5000 funds a full program cycle.”
Track Key Metrics: Some important metrics could include:

Donor Acquisition Cost (DAC): The average cost to acquire a new donor.
Retention Rate: The percentage of donors who continue giving year over year.
Lifetime Value (LTV): The total contribution expected from a donor over their lifetime.
ROI: How much revenue was generated versus the cost of each campaign.

Gather Feedback: Plan to survey donors periodically to understand motivations, satisfaction, and areas for improvement. For example, send a survey after each event asking about the experience and any additional needs.
Evaluate Campaign Success: After each campaign, plan to analyze what worked well and areas for improvement. Break down engagement across channels, and adjust your strategy based on insights.

Detail Donor Stewardship and Retention Efforts

Write a plan for

Thanking Donors Promptly: Express gratitude within 48 hours. Ensure thank-you notes are warm, personal, and detail how their support will be used. A personalized, heartfelt message reinforces the donor’s impact and can significantly boost retention rates.
Providing Regular Updates: Send periodic updates with photos, stories, and results that showcase your program’s progress. Quarterly or bi-annual updates allow donors to see the ongoing impact of their support and keep them engaged with the organization.
Offering Exclusive Experiences: For major donors, arrange special experiences like facility tours, meet-and-greets with leadership, or preview events to deepen engagement and show appreciation.
Offering recognition Programs: Recognize and honor loyal supporters through named donor tiers, membership societies, or a public donor wall. Highlight long-term supporters in newsletters or during events as a way to celebrate their contributions.

Set a Detailed Fundraising Calendar

Map Campaigns: Identify key times of the year for fundraising, like year-end or Giving Tuesday, and plan campaigns around these peaks. Launch appeals early to build momentum and maximize response rates.
Define Key Activities: Schedule specific tasks, such as appeal letter mailings, social media pushes, donor outreach, and event planning. Use software like Google Calendar or Asana to keep track of timelines and responsibilities.
Monitor Milestones: Set monthly or quarterly check-ins to assess your progress toward goals. Tracking early allows you to make real-time adjustments to strategies if you’re falling short of targets.