Before coming close to achieving your fundraising goals as a nonprofit, you need to take the time to carefully develop an effective fundraising strategy.
It is not enough just to hope that donors will give to your organization: without an in-depth understanding of your needs, limitations and organizational aspirations, your nonprofit won’t be able to strategically court donors and fundraise effectively.
Whether your nonprofit is looking to revamp an existing fundraising strategy, or even if your organization wants to develop a fundraising strategy for the first time, we have the tips you need to build your fundraising strategy from the ground up!
To build a better fundraising strategy, your nonprofit should:
- Assess your current fundraising strategy.
- Develop your fundraising goals and gift range chart.
- Determine the prospects for your fundraising strategy.
- Review your case for support.
- Create a plan of action.
- Strengthen your internal operations.
- Choose your metrics – and stick to them!
Ready start fundraising strategically? Let us break down these steps for you.
Step #1: Assess your current fundraising strategy.
There is no better way to understand where to start building your new fundraising strategy than by taking a good look at your current one. What elements are working now and which leave room for improvement?
Every nonprofit has a unique set of needs, goals and limitations to contend with. Are you fundraising using a one-size-fits-all mindset? Now is the time to refocus your strategy to be tailor-made with the unique state of your nonprofit in mind.
Further, you might have developed a fundraising strategy some time ago that no longer fits the scope of your nonprofit, or your organization may never have developed a coherent fundraising strategy at all, leaving you to start at square one.
In any case, one of the best ways for nonprofits to clarify the status of their fundraising strategy is to seek outside consultation.
A dedicated fundraising consultant can empower your organization by providing a fresh perspective. As an outsider, they can evaluate your strategy without bias and then leverage what they have learned working with other nonprofits to bring your organization to the next level.
At Aly Sterling Philanthropy, the consultation process begins by interviewing key stakeholders.
For an idea of how an assessment would play out for your nonprofit, check out the following overview of Aly Sterling’s Philanthropy Blueprint Process.
After evaluating your current strategy, the right consulting firm can help you develop a new, better strategy and can assist you with implementing it at your nonprofit.
Step #2: Develop your fundraising goals and gift range chart.
Developing a fundraising goal is the cornerstone element of your fundraising strategy.
Your fundraising goal should represent the amount of money your nonprofit will aim to raise over the course of a campaign, or by the end of the year for an annual fund. You can also incorporate related goals, such as increasing your donor retention rate or increasing the number of major gifts received as a way to support your core fundraising goal.
Your nonprofit can determine your fundraising goal by:
- Conducting a feasibility study. Typically paired with capital campaigns, feasibility studies involve one-on-one interviews with key stakeholders and major donors to get a sense of how realistic your goal is.
- Analyzing past data. Nonprofits should also assess how much they have raised historically. A good fundraising goal will strike a balance between being realistic and encouraging financial growth.
After determining your organization’s financial goals, your nonprofit can assess the viability of these goals by creating a gift range chart.
A gift range chart takes what you have learned from your feasibility study and helps you see exactly what it will take to achieve your nonprofit’s goals. In the chart, you can determine the number of gifts you will need, the number of prospects who will need to provide them, the size of these gifts and the cumulative total required of each gift range.
For a better understanding of what a gift range chart looks like in practice, consult the following gift range chart example.
Notice how as the target gift amounts increase, the pool of prospects becomes smaller? In the example, just 4 prospects have been identified as capable of giving at that level.
Thus, this hypothetical nonprofit might allocate more resources toward stewarding those 4 possible donors than they do for the 80 individual prospects they’ve singled out as capable to give at the $2,500 level.
Step #3: Determine the prospects for your fundraising strategy.
Now that you have assessed your current fundraising strategy, defined your new fundraising goals and created a gift range chart to pinpoint the types of gifts you need to receive, you can continue building your new fundraising strategy by determining the prospects your nonprofit should seek out.
A solid fundraising strategy will identify specific revenue sources for your organization to pursue as donor prospects. Your prospects may include:
- Individual donors.
Decide early which leads are worth pursuing; then, determine what resources you can afford to allocate to each prospect.
You can do this by evaluating prospect research on your possible donors and identifying their capacity to give through wealth indicators, demographic data, their history with your organization, or other relevant data.
Your nonprofit should also research your current active donors. By conducting prospect research on donors who are already involved with your organization, you might discover that their financial situation has changed, making them more or less likely to give to your nonprofit moving forward.
Step #4: Review your case for support.
When building your fundraising strategy, one of the most important questions to answer is “Why does our nonprofit deserve to be supported by donors?”
You need to make a compelling case for your nonprofit to earn donors’ support. Now is the time to define who you are as an organization and what your purpose is.
A strong case for support communicates to donors (as well as stakeholders) a clear vision for your nonprofit. Additionally, you should articulate your financial goals and the means you will use to achieve them.
However, your case statement isn’t just a resource for interested supporters. A strong case statement not only educates donors about your organization, but it also can be used by staff, board members and volunteers as a tool to refer to when acting on behalf of your nonprofit.
Here is an example of how your nonprofit might begin your case statement:
At XYZ Animal Advocacy, it is our mission to support animal welfare by raising money for rural animal shelters across the nation. Over the course of FY 20XX, we aim to raise over $500,000 for underfunded shelters, a 20% increase over our total fundraising efforts from last year. We cannot do this without the help of high-impact donors like you! With your support, we will be able to fund free spay and neuter services for 10,000 pets…
Above all, make sure that your case statement clearly aligns with your nonprofit’s overall mission and that you can justify your fundraising objectives to donors.
Step #5: Create a plan of action.
Along with identifying your organization’s financial goals, outlining the manner in which you will achieve them in a plan of action is central to building an effective fundraising strategy.
With everyone on the same page, your nonprofit will be better equipped to successfully carry out your fundraising initiatives.
Some fundraising activities that your organization might find productive include:
- Social fundraising such as peer-to-peer campaigns and crowdfunding.
- Community fundraising events like walkathons and auctions.
- Major donor cultivation events.
- Corporate partnerships.
Every fundraising activity your organization plans to carry out should be marked on a calendar so that you can avoid activity overlap. This also helps your nonprofit better plan out donor interactions and keeps you on schedule to communicate with your donors regularly.
Your action plan should clearly state:
- The staff member or volunteer in charge of each fundraising activity.
- An estimated cost of each activity.
- A goal that determines each activity’s success.
The more data your fundraising calendar accounts for, the more effective a tool it will be to guide your fundraising strategy!
Step #6: Strengthen your internal operations.
Underpinning the success of your fundraising strategy is your nonprofit’s team. While every nonprofit has different needs, the necessity of strong internal operations remains constant.
To ensure productive internal operations, your nonprofit should prioritize a few things:
- Clear delegation of activities.
- Clear communication between a nonprofit’s “wearers of many hats.”
- Maintaining timelines for activity planning and execution.
- Fostering board members who are capable, passionate and unafraid to take the lead in soliciting donations on behalf of your nonprofit.
- Supporting a culture among staff members that emphasizes participation in fundraising.
- Incentivizing staff involvement in fundraising efforts.
When evaluating your internal operations, you may realize that you need an outside perspective to help you get your staff into shape. As with assessing your existing fundraising strategy, this is a great opportunity to enlist the help of a fundraising consultant.
With their guidance, you can get a professional opinion on where your internal operations need to improve and learn new techniques to strengthen your staff and board.
Step #7: Choose your metrics – and stick to them!
Finally, in order to best be able to measure the success of your fundraising strategy, you should clearly define the metrics you want to evaluate.
These metrics represent the key areas that you will evaluate both throughout and at the close of a campaign to show how your organization has improved or regressed.
Some metrics you could examine include:
- Donor acquisition rates.
- Donor retention percentage.
- Donor growth/conversion numbers.
- Event attendance.
Select a core set of metrics you plan to measure well into the future of your organization. Data is only representative when you can compare it to something, so it will not help your organization if you do not consistently collect data on the same metrics.
Again, this is a great opportunity to seek counsel from a fundraising consultant. A fundraising consultant can help you determine Key Performance Indicators tailored to the scope of your organization, as well as provide you with insight into how to move forward once you evaluate your metrics.
Effective fundraising starts by building a solid fundraising strategy for your organization to follow. Now that you know the steps to build a excellent fundraising strategy of your own, you are ready to start a new chapter of your organization’s success!
- Aly Sterling’s Nonprofit Feasibility Studies: 9 Tips to Maximize Results. Feasibility studies can be an invaluable tool for nonprofits in crafting the perfect fundraising strategy. Be sure to consult our 9 tips to maximize results during your next feasibility study!
- Aly Sterling’s Planning Your Next Capital Campaign: 9 Steps to Success. Throughout the fundraising strategy creation process, you may decide to embark on a capital campaign to reach a particular fundraising goal for your nonprofit. Become an expert in making your capital campaign a success by reviewing our 9 simple steps!
- Aly Sterling’s 5 Fundraising Event Tips to Launch a Capital Campaign. Now that you are an expert fundraising strategist, you might decide that holding a fundraising event would be the perfect way to kick off your capital campaign. Check out our 9 tips to make your fundraising event count!
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