What are your plans to increase revenues in 2022? Execute more fundraising activities? Get more participation in current efforts? Go after completely new donors? You can only do three things to realize higher net income: get more people to give, get current people to give more, and cut costs. Which strategies are you planning to implement?
If you aim to attract new donors, what is your budget? Often, the cost to recruit a donor exceeds the first-year financial return. Do your 2022 projected fundraising costs exceed your projected revenues?
How about implementing new, low-cost events? Or just doing more of the same without an increase in costs? Do you want to lose donors or overwork your staff?
Of course not.
But those are the results you’ll end up with if your plan is to pursue more fundraising endeavors at the same or less cost as last year. You end up spending a lot of time and effort on undertakings without commensurate positive results. If you intend to expend more fundraising effort than you did last year without increasing resources to meet your revenue goals, you run the risk of losing donors due to donor fatigue; overtaxing, exhausting, and de-motivating staff who and may then burn out and leave; or setting your agency up to become or continue to be under-financed.
There is a solution. You can raise more money with a better ratio of investment to returns. The trick is to use a strengths-based approach, that is, identify your fundraising gaps and compensate for them by building on your nonprofit’s strengths. And many of those strengths involve operational responsibilities not generally considered part of fundraising. You are laying the foundation for making decisions on how to raise money that will work within the parameters of your nonprofit’s capacity while at the same time growing it.
Conducting a Thorough Assessment
A thorough fundraising assessment will account for your specific mission, community makeup, organizational capacity, and stage in the life cycle, including evaluating board structure and leadership, organizational readiness, overall financial performance, fundraising policies and procedures, planning systems, research systems, and recordkeeping and reporting systems. You must thoroughly evaluate all parts of your agency that influence fundraising and impact your ability to raise money. Get input from all organizational units that affect and support fundraising processes and results, including development, finance, IT, marketing, communications, program, and governance. When you gather data, you want overall organizational data as well as individual unit data.
Essential things to research and assess include:
- Board fundraising structure and leadership
- Organizational fundraising savvy and readiness
- Overall agency financial performance and trends
- Strategic plans and processes
- Development plans and processes
- Marketing plans and processes
- Communication plans and processes
- Donation policies and processes
- Target group research activities and processes
- Gift statistics
- Donor profile
- Donor statistics
- Donor prospecting activities and processes
- Donor cultivation activities and processes
- Donor stewardship activities and processes
- Fundraising performance
- By fundraising channel
- By individual fundraising activity
- Fundraising recordkeeping and reporting software
- Fundraising volunteer recruitment, development, and recognition activities processes and activities
Applying the Results
When you look at your data, account for your organization’s particular mission and purpose, community characteristics, donor base attributes, overall budget, and organizational aptitude and ability. Each of these factors varies from agency to agency and should be included in your fundraising planning. Whether you choose to pursue online donations, direct mail, phone-a-thons, text-to-give solicitations, crowdfunding, peer-to-peer campaigns, major and planned gifts, donor-advised funds, foundation grants, government contracts, employee matching gifts, sponsorships, special events, capital campaigns, in-kind donations, and volunteer hours, depends on your and your staffs’ skills, agency and fundraising infrastructure, strategic goals, and strengths.
Don’t try to raise money through all available channels. And don’t copy someone else and expect the same results either. Your organization is unique. You need to design for that uniqueness. Pick activities that are easy for you and your staff to implement because you are strong in that area. Don’t try to do something that will tax resources. And make it mission related. Your ultimate goal is not to raise money. Your ultimate goal is to grow your mission, inviting donors to join you in making a significant impact.
When you budget, invest in the specific fundraising pursuits that raise the average gift per donor. Also, make sure to set aside resources and budget for donor retention efforts. Donors don’t just magically stay. They need ongoing cultivation to get engaged and give again. To help make decisions, calculate the return on investment of each of your fundraising activities. Allocate resources so that you realize the most amount of money using the least amount of resources. Robust donor management and CRM software systems produce a high return on investment, helping you use fewer resources to raise more money. So, too, with continuing education and administrative support. Develop a customized fundraising strategy that leverages your agency’s uniqueness, works within your organization’s capacity, and produces positive financial results.
Make sure what you are designing accounts for your organization’s particular mission, community, donor base, budget, and organizational capacity. Ensure positive net income. Maintain a positive cash flow. Make a positive impact. Put mission first. Create a fundraising strategy that is as mission infused, operationally efficient, profitable, and impactful as it can be.
Take your strategy and create an action plan and establish benchmarks for measuring progress. The action plan and benchmarks will help you implement progressive steps toward the financial stability and mission impact you desire.
Implement fundraising activities that engage people in your mission. Base plans on present conditions, not past ones. Take the time to regularly evaluate your plans to see if they are still the best option, given your current circumstances. Do what your nonprofit, not someone else’s, needs to do to raise the most money you can.
If you thoroughly evaluate your nonprofit’s fundraising gaps and strengths, develop a strategy based on your agency’s uniqueness, and create an action plan based on your customized strategies, you will:
- Know where your leaks are regarding your fundraising, in terms of both mission and money.
- Develop a financial strategy that leverages your agency’s fundraising assets and works within your organization’s capacity.
- Create an action plan that shows you how to raise more money and ensures you realize higher net income.
Let’s talk about where your nonprofit is in its fundraising journey and what your next steps are. You’re invited to schedule a complimentary, thirty-minute strategy session with me. During our time together, we’ll clarify the issues your nonprofit is facing, explore possible solutions, and develop a plan of action.
I look forward to speaking with you!