A step-by-step guide to creating an annual fundraising plan
Almost every week, I hear from a colleague or friend about how an organization that they love or one they are running themselves is in dire need of fundraising help and has no idea where to begin. I get it. Starting or reinvigorating a fundraising program can feel completely overwhelming. But just like with any large project, breaking it down into concrete, manageable steps can help ensure success.
Supporting these organizations in identifying their path forward for fundraising success is one of the most fulfilling parts of the work that we do, and I’m excited to share our approach with you. All it requires is a little brainstorming, organization, and planning.
Below is our step-by-step guide to creating an annual fundraising plan:
Define Your Larger Vision
Begin by clarifying your vision and organizational values. What impact are you aiming to make on your community? This clarity allows you to craft a compelling impact statement and build a case for why donors should support your mission. It also ensures that everyone involved—board members, staff, and other stakeholders—is aligned with this vision, making them effective advocates and champions for your organization.
Know The Lay of the Land
Fundraising typically involves the following revenue streams:
Individual Donors, which are often broken up into Major Donors and “Friend” Level Donors
Institutional Donors, which is comprised of Foundations, Government, and Corporate funders
Special Events, such as galas and other fundraising events
A strong fundraising plan will take advantage of all of these sources, so that it is not too heavily reliant on one over the other.
Assess Your Assets
Often organizations feel that they are starting at absolute zero when beginning their fundraising journey, but that’s not true! Everyone has a network. And if you are a nonprofit - you have a Board, and those individuals have networks, too. Take some time to identify people in your immediate community who might be interested in supporting your organization or initiative. Research your subscribers, event attendees, and ticket buyers to identify potential donor prospects.
For grants and institutional funding, utilize tools like the Foundation Center (which is available at most public libraries for free!) to research foundations and corporate funders. Explore government funding at the city, state, and federal levels, as well.
Once you have identified your individual and institutional prospects, assign dollar amounts to each prospect according to what you think they might be able to give. This will provide you with an educated estimate of the total you can potentially raise in a given year.
Recalibrate & Set Your Goals
Once you have your projected fundraising total, compare it to your projected annual expenses. More often than not, your revenue will likely fall short of your expense goals (ah, the lament of nonprofit life!). If this happens, you can do one or both of these things:
Continue researching and identifying new prospects.
Scale back your expenses or extend your project/program timeline to allow more time for fundraising.
And while establishing a revenue goal is essential for tracking progress, I would be remiss in not mentioning that fundraising takes time. A successful fundraising program is one built on trust-based, authentic relationships, not transactional ones. It can often take months, if not years, to see larger fundraising asks come through. So, in addition to establishing goals based on dollar amounts, it's just as important to establish non-monetary goals, such as increased subscribers, volunteers, grant applications submitted, or prospect meetings, to help maintain momentum and energy.
Get Out There!
Once you’ve identified your prospects, get out there and start building those relationships! Send out newsletters, invite people to coffee, and chat with them at events. Most importantly, use the vision and values that you identified as an organization to inspire and engage with your future donors.
Build Strong Systems
Creating strong internal systems that support donor management is key in ensuring that those hard-won donor relationships are maintained effectively. Donors want to know their contributions are meaningful to the organization and that they are having an impact. It is important to issue timely thank yous and regular communications to donors, so that they remain connected and engaged with the organization - with the hope that they will keep supporting you year after year.
There are a number of donor management systems that an organization can purchase to assist with these tasks, but there are also plenty of ways to manage donor relationships outside of a paid platform (i.e. a good old fashioned spreadsheet), especially if you’re just starting out.
I hope this is helpful in breaking down what can feel like an overwhelming task into an achievable plan. Get out there, get those dollars, and keep changing the world!
In community,
Stacy
