Before your nonprofit can achieve its fundraising goals, you must take the time to carefully develop an effective fundraising strategy.
Why? It’s not enough to hope that donors will give to your organization simply out of the goodness of their hearts. You must have an in-depth understanding of your nonprofit’s needs and aspirations in order to strategically court donors and fundraise effectively.
Whether your nonprofit is looking to revamp its existing fundraising strategy or develop a brand new one, we have the tips you need to build your fundraising approach from the ground up.
To build a better fundraising strategy, you should:
- Assess your current fundraising strategy.
- Develop your fundraising goals and gift range chart.
- Identify donor prospects.
- Clean your database.
- Review your case for support.
- Create an action plan.
- Strengthen your internal operations.
- Revamp your marketing strategy.
- Prioritize your stewardship strategy.
- Choose your metrics and stick to them!
Time and time again, it’s evident that nonprofits that have a solid fundraising strategy and organizational foundation are the ones who achieve the most sustainable, long-term fundraising success. Ready to start fundraising strategically? Let’s break down each step.
Step #1: Assess your current fundraising strategy.
It may feel like moving backward, but in fact, the best way to understand where to start building your new fundraising strategy is to take a good look at your current one.
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. Whatever the case may be, it’s helpful to take stock of what you’re currently doing to start mapping out where you want to go.
One way to evaluate your nonprofit’s current strategy is to look at your nonprofit data. This includes metrics such as your:
- Donor retention rate: How many donors continued to give to your organization this year after giving in the previous year?
- Email open rate: How many of your email subscribers actually open your messages regularly?
- Campaign fundraising progress: Do your fundraising campaigns consistently meet or exceed their goals?
If you’ve developed a system to manage this data and update the information regularly, then it should be easy to pull a report. The data in these reports can reveal trends in your communication and fundraising efforts.
For instance, perhaps your last three online peer-to-peer fundraising campaigns exceeded your goals by a significant amount. As a result, you may realize that your supporters gravitate toward online campaigns because they’re easy to contribute to or because they can showcase their personal connection to your cause.
Keep in mind that reviewing your nonprofit data is just the first step to assessing your nonprofit’s fundraising strategy. One of the best ways to determine where your nonprofit currently stands is to work with a fundraising consultant.
A dedicated fundraising consultant can empower your organization by providing a fresh perspective. As an outsider, they can evaluate your strategy without bias and leverage what they have learned through working with other nonprofits to bring your strategy to the next level.
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 is the amount of money your nonprofit will aim to raise throughout an initiative 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 data analysis and feasibility study (if you’re conducting one), coupled with your fundraising goal, to help you understand exactly what it will take to achieve your objectives. When creating this chart, you’ll 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 example:
Note how as the target gift amounts increase, the pool of prospects becomes smaller. In the example, just four prospects have been identified as capable of giving at the highest level.
Thus, this hypothetical nonprofit might allocate more resources toward stewarding those four 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: Identify donor prospects.
Now that you have assessed your current fundraising strategy, defined your goals and created a gift range chart, it’s time to determine who your prospective donors are.
A solid fundraising strategy will identify specific revenue sources for your organization to pursue as donor prospects. Your prospects may include:
- Individual donors.
- Foundations.
- Corporations.
Decide early which leads are worth pursuing; then, determine what resources you can afford to allocate to each prospect.
You can do this by conducting prospect research. Prospect research involves identifying potential donors’ likelihood to contribute based on their willingness and capacity to give. Through the prospect research process, you (or a consultant) will pinpoint donors who exhibit:
- Wealth markers, such as real estate ownership or business affiliations.
- Philanthropic indicators, including a history of giving to your nonprofit or involvement with similar organizations.
You can conduct prospect research on your own, but we recommend hiring a professional to handle all the hard work for you. From prospect research consultants to companies that specialize in identifying valuable prospects, there are plenty of professionals that can help you pinpoint potential major supporters.
A prospect research professional will narrow down their findings to determine the candidates with the most giving potential and willingness to support your cause. This lets you know which donors you should spend the most time getting to know and cultivating a relationship with.
Step #4: Clean your database.
Effective prospect research requires a combination of external and internal data sets.
External sources might include nonprofit annual reports, SEC filings and social media sites like LinkedIn. On the other hand, internal sources such as your donor management software can prove to be invaluable as you comb through prospective contributors within your existing supporter network.
To use the data stored in your constituent profiles, you’ll first need to verify that the records in your database are up-to-date and accurate. Conduct a periodic CRM cleanup to catch the following:
- Duplicate profiles.
- Outdated or incorrect information.
- Inactive accounts.
A clean donor database allows you to build your fundraising strategy using only the most accurate, updated information. Plus, you can improve your fundraising return on investment by ensuring that you send marketing materials toward active email and home addresses for individuals who have a proven interest in your cause.
Step #5: Review your case for support.
When building your fundraising strategy, one of the most important questions to answer is “Why does our nonprofit deserve donors’ support?”
A strong case for support communicates to donors 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 can also be used by staff, board members and volunteers as a tool to refer to when acting on behalf of your nonprofit.
A case for support is non-negotiable for every fundraising effort, big or small. You may vary the messaging and focus of your case for different uses (capital campaign versus annual fund versus planned giving) but presenting a solid rationale for why you’re asking for funds is the only way to fundraise, regardless of the initiative.
When creating or revamping your case for support to be more impactful, consider questions such as:
- Who is your audience? Your case for support may have a highly defined audience, such as prospective major capital campaign donors, or a more general one, such as your donors, volunteers and staff members. Your case for support should speak to your audience members’ motivations for supporting your mission.
- What is your goal? Your case for support should reference your specific fundraising goal. This gives audience members a clear picture of what you’re seeking to achieve so they can start to visualize how their support will make a difference.
- Why does it matter? Why should your audience care about your fundraising goal? Explain what you’ll be able to accomplish when you reach your fundraising goals, whether it’s purchasing supplies for underfunded schools or reducing pollution in a local river.
Here is an example of how an animal advocacy nonprofit might make its case for support:
At Man’s Best Friend Animal Society, 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…
Ultimately, your case for support should clearly align with your nonprofit’s overall mission and justify your fundraising objectives to donors.
Step #6: Create an action plan.
Your action plan outlines the concrete steps that your team will follow to achieve your organization’s fundraising goals. With everyone on the same page, your team 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 or crowdfunding. These activities help supporters take a more active role in their engagement with your nonprofit, strengthening their bonds with your cause.
- Major donor cultivation efforts such as meeting with major donors one-on-one. These measures ensure that you’re taking specific steps to steward your most impactful donors.
- Fostering corporate partnerships through joint marketing campaigns and other mutually-beneficial activities. This allows you to diversify your fundraising streams with valuable corporate support.
Matching gifts should also play a significant role in your fundraising plan. From corporate matches to challenge matches to matches made by a local business, there are several ways you can incorporate matching gifts into your activities.
While it might take time before you see the results of your matching gift efforts, promoting these philanthropy programs can help you reach (and even exceed!) your goals. To get started, you’ll need to promote matching gifts during your fundraising activities. Send out emails reminding donors to submit a request and link to your matching gift page (if you have one) so they can learn more information.
The date of every fundraising activity your organization plans should be clearly marked to avoid activity overlap. This also helps your nonprofit better plan out donor interactions and keeps you on schedule to communicate with your donors regularly.
Here’s an example of what a fundraising plan for January-March might look like:
Your action plan should clearly state:
- The staff member, volunteer or department in charge of each fundraising activity.
- The estimated cost of each activity.
- A goal that determines each activity’s success.
The more details your fundraising plan includes, the more effective a tool it will be to guide your fundraising strategy!
Step #6: Create an action plan.
Your action plan outlines the concrete steps that your team will follow to achieve your organization’s fundraising goals. With everyone on the same page, your team 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 or crowdfunding. These activities help supporters take a more active role in their engagement with your nonprofit, strengthening their bonds with your cause.
- Major donor cultivation efforts such as meeting with major donors one-on-one. These measures ensure that you’re taking specific steps to steward your most impactful donors.
- Fostering corporate partnerships through joint marketing campaigns and other mutually-beneficial activities. This allows you to diversify your fundraising streams with valuable corporate support.
Matching gifts should also play a significant role in your fundraising plan. From corporate matches to challenge matches to matches made by a local business, there are several ways you can incorporate matching gifts into your activities.
While it might take time before you see the results of your matching gift efforts, promoting these philanthropy programs can help you reach (and even exceed!) your goals. To get started, you’ll need to promote matching gifts during your fundraising activities. Send out emails reminding donors to submit a request and link to your matching gift page (if you have one) so they can learn more information.
The date of every fundraising activity your organization plans should be clearly marked to avoid activity overlap. This also helps your nonprofit better plan out donor interactions and keeps you on schedule to communicate with your donors regularly.
Here’s an example of what a fundraising plan for January-March might look like:
Your action plan should clearly state:
- The staff member, volunteer or department in charge of each fundraising activity.
- The estimated cost of each activity.
- A goal that determines each activity’s success.
The more details your fundraising plan includes, the more effective a tool it will be to guide your fundraising strategy!
Step #7: Strengthen your internal operations.
Your nonprofit’s team is the driving force behind your fundraising success. 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 elements of good governance, including:
- Delegating activities.
- Establishing communication between a nonprofit’s “wearers of many hats.”
- Maintaining timelines for activity planning and execution.
- Investing in the right software tools.
- 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 fundraising participation.
- 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. This is another 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 improvement and learn new techniques to strengthen your staff and board.
Step #8: Revamp your marketing strategy.
Effective marketing is key to the success of any fundraising effort, from a Giving Day drive to a major, multi-year capital campaign. Continually reviewing your marketing approach allows you to take advantage of new techniques and platforms to reach supporters most effectively.
Remember: when it comes to fundraising, it’s not just about what you say, but how you say it. A well-timed, well-written marketing message can convince new supporters who may be on the fence about becoming donors.
As you review your marketing approach, be sure to:
Adopt a multichannel marketing strategy.
Donors have different communication preferences. While email marketing may connect you with one segment of supporters, that may exclude other segments of individuals who prefer offline communication methods like phone calls.
A multichannel marketing strategy will connect you with a larger pool of supporters and provide multiple touchpoints for donors to engage with your team.
To reach a wide array of current and potential supporters, consider leveraging these different marketing platforms:
- Email. Create a continuous stream of outreach by sending a monthly newsletter where you give big-picture updates to your supporters.
- Social Media. Reach younger generations of donors by regularly posting across social media platforms like Facebook, Twitter, Instagram, and TikTok. While your core messages can be consistent, adjust the type of content you feature on each platform. For example, Instagram lends itself well to imagery, while Facebook is great for sharing links and long-form content.
- SEO Marketing. Your website is an incredibly valuable part of your marketing strategy. Increase your visibility on search engines by optimizing your web content for specific keywords. If you don’t have time to master search engine optimization (SEO) best practices, the Google Ad Grant program can help your SEO efforts substantially. You’ll receive $10,000 each month to spend on promoting your web pages on Google Ads.
- Direct Mail. An awful lot of donors still prefer traditional communication methods. Send flyers and fundraising letters to those who share their postal addresses with your team.
Pay attention to the types of messages that perform well on each platform. If you notice your ROI on a particular platform is much higher, you might reallocate more of your time toward it and less toward platforms that aren’t generating a ton of value.
Focus on marketing platforms that your audience members already use.
Instead of hopping on the latest and greatest platforms, focus on the platforms that your audience members already use. This also allows you to measure performance using tried-and-true metrics, such as email open rates, direct mail response rates, and social media engagement.
Based on these metrics, you can pinpoint which platforms are most effective for engaging your audience. Then, focus your efforts on these specific platforms to make the most of your marketing budget.
Create well-designed marketing materials.
What’s just as important as your fundraising messages are the graphics you use to catch readers’ eyes. When designed well, your marketing materials can transform your fundraising efforts.
No matter what platform you use to share your materials, your designs are what initially reel readers in and keep them invested as they read through them. In fact, your designs can actually help people understand your core message and inspire them to get involved.
When reimagining your outreach, make sure to incorporate these graphic design best practices into all your materials, whether you’re sharing fundraising flyers, sending donation request letters, or posting on social media:
- Infuse your brand. You want people to instantly associate your fundraising materials with your cause. Do this by incorporating your official logo, colors, and fonts into your materials.
- Create a hierarchy of content. Organize your content and guide your readers’ eyes to the most important parts of your materials. Different-sized fonts, bolded text, italics, and colors are all proven ways to direct readers’ attention to different parts of your graphics.
- Don’t overload your materials with too many elements. Use whitespace, dividers, and bullet points to make your content easily digestible. Too much text or an overwhelming amount of graphics can deter readers from engaging with your materials.
Compelling graphic design is an unavoidable part of nonprofit marketing. From your fundraising letters to social media posts, a powerful design is a crucial part of defining your brand and inspiring people to donate to your cause.
Create a digital marketing style guide.
Online marketing is crucial, especially considering organic visitors to nonprofit websites make up 44% of total nonprofit web traffic. With a digital style guide, you can ensure that all online marketing materials, from your website’s donation page to your social media posts, align with your nonprofit’s brand.
Creating a brand guide will ensure that your team and third-party vendors are on the same page about how to present your nonprofit. For instance, you’ll want to define requirements for specific elements such as:
- Your official colors
- When to use different variations of your nonprofit’s logo
- Typography, including preferred fonts, colors, weights, and cases
- Tone of voice
Following specific guidelines across all fundraising materials will boost brand recognition and provide a uniform, professional experience for supporters connecting with you online.
Step #9: Prioritize your stewardship strategy.
Throughout the year, your organization probably engages in a number of activities meant to recruit new supporters, from social media campaigns to prospect research.
However, don’t lose sight of the importance of donor retention. Retaining the donors you already have is much more cost-effective in the long run than constantly spending time and effort on finding new supporters. Plus, repeat donors are much more valuable since they tend to contribute in greater amounts over time.
Take a closer look at how the donor stewardship cycle ushers prospective donors toward becoming recurring, long-term supporters:
- You get to know more about your donor as you introduce them to your nonprofit’s mission and fundraising goals at the same time.
- The donor decides to donate.
- You send sincere thank-you efforts to your donor, from thank-you letters to gala invites.
- Your donor feels genuinely appreciated and valued by your organization.
- The donor decides to continue supporting your mission.
To ensure your stewardship efforts are designed to boost your donor retention rate, you must:
- Strengthen relationships with current donors. Continually engage with current supporters by inviting them to participate in a number of ways beyond just donating. This includes getting involved in volunteer work or advocacy campaigns.
- Thank donors in a way that resonates with them. What’s better than a heart-felt thank-you message? One that’s delivered on your donors’ favorite platforms! If donors have expressed a preference for how they’d like to be thanked, such as being included in your donor wall or on social media, make sure to express appreciation using their favorite communication channel.
- Make your thank-you letters or efforts genuine. Ensure the size of the thank-you is equivalent to the size of the gift. For example, don’t just send a thank-you email to your largest donors—these individuals deserve more personalized, public recognition! You might create a handwritten thank-you letter, invite them to an appreciation gala and spotlight them on your donor wall.
The more connections you can make with your donors, the more likely they are to continue supporting your organization for the long term. It’s much harder to cut ties with an organization that makes an effort to get to know each donor, involves them in a variety of ways and expresses appreciation for their contributions!
Step #10: Choose your metrics and stick to them!
Finally, clearly define the metrics you want to evaluate to measure the success of your fundraising strategy.
These metrics represent the key areas that you will evaluate both throughout and at the close of a fundraising effort 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.
For instance, review this example of a comparison of event attendance and donor acquisition rates over an extended period. This image shows both metrics steadily increasing over time, signaling an upward trend in both engagement metrics.
Again, this is a great opportunity to seek counsel from a fundraising consultant. A fundraising consultant can help you determine key performance indicators (KPIs) tailored to the scope of your organization, as well as provide insight into how to move forward once you evaluate your metrics.
Wrapping Up
Effective fundraising starts by building a solid fundraising strategy for your organization to follow. Now that you know the steps to build an excellent fundraising strategy of your own, you are ready to write a new chapter of your organization’s success!
Remember, if taking on the challenge of creating a new fundraising strategy feels overwhelming, consider working with a fundraising consultant like Aly Sterling Philanthropy.
Our consultation process begins by interviewing key stakeholders. Then, we assess your culture and infrastructure, propose recommendations, set KPIs and help equip your team to carry out your new strategy effectively.
After evaluating your current strategy, the right consulting firm can help you develop a new, better strategy and assist you with implementing it at your nonprofit.
Interested in finding out how this process can support your organization? Contact us today for more information!
Looking for more insight into how to create a successful new fundraising strategy? These additional resources will help:
- Nonprofit Consultants: Top 25 Partners for Your Organization. It’s crucial to find the right nonprofit consultant for your organization’s needs. Use this list of 25 top partners to narrow down your search.
- The Essential Fundraising Plan Template for Nonprofits. Looking for a fundraising strategy template to help organize your fundraising plans? This free template from Aly Sterling Philanthropy features everything you need.
- The Complete Guide to Nonprofit Strategic Planning. A strategic plan can pull your organization in the right direction for years to come. Use this guide to craft a powerful, sustainable strategic plan.
Step #9: Prioritize your stewardship strategy.
Throughout the year, your organization probably engages in a number of activities meant to recruit new supporters, from social media campaigns to prospect research.
However, don’t lose sight of the importance of donor retention. Retaining the donors you already have is much more cost-effective in the long run than constantly spending time and effort on finding new supporters. Plus, repeat donors are much more valuable since they tend to contribute in greater amounts over time.
Take a closer look at how the donor stewardship cycle ushers prospective donors toward becoming recurring, long-term supporters:
- You get to know more about your donor as you introduce them to your nonprofit’s mission and fundraising goals at the same time.
- The donor decides to donate.
- You send sincere thank-you efforts to your donor, from thank-you letters to gala invites.
- Your donor feels genuinely appreciated and valued by your organization.
- The donor decides to continue supporting your mission.
To ensure your stewardship efforts are designed to boost your donor retention rate, you must:
- Strengthen relationships with current donors. Continually engage with current supporters by inviting them to participate in a number of ways beyond just donating. This includes getting involved in volunteer work or advocacy campaigns.
- Thank donors in a way that resonates with them. What’s better than a heart-felt thank-you message? One that’s delivered on your donors’ favorite platforms! If donors have expressed a preference for how they’d like to be thanked, such as being included in your donor wall or on social media, make sure to express appreciation using their favorite communication channel.
- Make your thank-you letters or efforts genuine. Ensure the size of the thank-you is equivalent to the size of the gift. For example, don’t just send a thank-you email to your largest donors—these individuals deserve more personalized, public recognition! You might create a handwritten thank-you letter, invite them to an appreciation gala and spotlight them on your donor wall.
The more connections you can make with your donors, the more likely they are to continue supporting your organization for the long term. It’s much harder to cut ties with an organization that makes an effort to get to know each donor, involves them in a variety of ways and expresses appreciation for their contributions!
Step #10: Choose your metrics and stick to them!
Finally, clearly define the metrics you want to evaluate to measure the success of your fundraising strategy.
These metrics represent the key areas that you will evaluate both throughout and at the close of a fundraising effort 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.
For instance, review this example of a comparison of event attendance and donor acquisition rates over an extended period. This image shows both metrics steadily increasing over time, signaling an upward trend in both engagement metrics.
Again, this is a great opportunity to seek counsel from a fundraising consultant. A fundraising consultant can help you determine key performance indicators (KPIs) tailored to the scope of your organization, as well as provide insight into how to move forward once you evaluate your metrics.
Wrapping Up
Effective fundraising starts by building a solid fundraising strategy for your organization to follow. Now that you know the steps to build an excellent fundraising strategy of your own, you are ready to write a new chapter of your organization’s success!
Remember, if taking on the challenge of creating a new fundraising strategy feels overwhelming, consider working with a fundraising consultant like Aly Sterling Philanthropy.
Our consultation process begins by interviewing key stakeholders. Then, we assess your culture and infrastructure, propose recommendations, set KPIs and help equip your team to carry out your new strategy effectively.
After evaluating your current strategy, the right consulting firm can help you develop a new, better strategy and assist you with implementing it at your nonprofit.
Interested in finding out how this process can support your organization? Contact us today for more information!
Looking for more insight into how to create a successful new fundraising strategy? These additional resources will help:
- Nonprofit Consultants: Top 25 Partners for Your Organization. It’s crucial to find the right nonprofit consultant for your organization’s needs. Use this list of 25 top partners to narrow down your search.
- The Essential Fundraising Plan Template for Nonprofits. Looking for a fundraising strategy template to help organize your fundraising plans? This free template from Aly Sterling Philanthropy features everything you need.
- The Complete Guide to Nonprofit Strategic Planning. A strategic plan can pull your organization in the right direction for years to come. Use this guide to craft a powerful, sustainable strategic plan.
