Preparing Your Fund Raising Capacity Now!
Building Your Fund Raising Capacity Now!
Most nonprofits are faced with significant fund raising challenges these days. As a part of the current Fiscal Crisis, donors have cut back, foundations have trimmed their grantmaking, and state governments are cutting a great deal.
In order to be a sustainable organization, able to weather these financial storms, nonprofits will need to develop fund raising plans. Then, they will need to implement the plan, focusing on those strategies that have the best opportunity for success. This article provides an outline of a fund raising plan, and a series of suggestions for areas of fund development that are working best for many agencies.
I. Fund Raising Plan
Your fund raising plan will guide staff, board and volunteers as they implement different goals and strategies — from the annual appeal to the events to major donor development.
Your Fund Raising Plan is made up of three simple building blocks:
A. Individual Donors
B. Institutional Donors
C. Earned Income
For each of the three building blocks, there are a wide range of strategies for developing revenue, as the following exemplify:
A. Individual Donors
1. Direct mail (best for donors giving smaller gifts. Direct mail never makes money when acquiring donors – only through repeat gifts from those who are current donors. It is always a good idea to send out mailings multiple times each year).
2. Special events including events such as “AID and Comfort,” Rape Crisis Center’s “Hot Salsa” dance party, Big Brothers Big Sisters “Bowl for Kids Sake.” Special events require a 6-9 month lead time, a strong group of volunteers, active Board involvement, and corporate involvement to donate many items to keep costs down).
3. Small events can be house parties for major donors, thank-you events for donors and volunteers or other small events. Small events are excellent ways to involve new major donors, when current major donors are willing to serve as hosts and invite their friends.
4. Telethons (though people often cringe at the idea of calling people, phone contacts can be extremely effective when calling those who are regular, loyal donors. Agencies often send letters out in advance asking for a donation and letting people know the volunteers will be calling; often people send in donations. Calls should be short and to the point, thanking the person for their support. Always use volunteers.
5. Individual Solicitations (primarily for those giving larger gifts).
B. Institutional Donors
Institutional donors include all of the different institutions that provide grants, contracts and donations. These usually include:
1. Federal Government – grants and contracts
2. State Government – grants and contracts
3. Local Government – grants and contracts
4. National foundations
5. Local/regional foundations
6. Corporations and corporate foundations
7. Civic groups
8. Faith communities
C. Earned Income
Earned income includes all income received from sales of any kind. This would include patient fees, subscriptions, tuition, workshop fees, ticket sales and other sales. Most nonprofit earned income is considered to be “substantially related” to mission and not taxable under requirements of the “Unrelated Business Income Tax” law.
I. What are Many Agencies Doing?
Develop a fund raising plan by using these steps:
1. Analyze your current income. Do you have revenue from multiple sources? Are there areas where you do not receive income, but could potentially develop? Most nonprofits have limited income from individuals, and could significantly increase individual income by developing a plan to use appeal letters, events and direct contact with donors and prospects. (Approximately 85% of all philanthropic resources comes from individuals; foundations, corporate foundations and bequests constitute the 15% balance.)
2. Develop a plan with specific strategies for diversifying your revenue. Build support for the plan with your board, volunteers and staff.
3. Review the donor database. Send out more appeals, but make them targeted appeals. Develop small gatherings for major donors, and ask them to bring friends. Schedule meetings with major donors to discuss what they might be able to provide. Analyze where donors are lapsing or giving less, and develop responses.
4. Implement strategies in the priority areas. Share results and build in support. The staff and board may choose a few priority areas. Once those are chosen, give them all of your energy, and review progress. Continue with them as long as they are working.
5. Work with board members, donors and friends to recruit volunteers. Have volunteers work on community outreach, events, and other areas as appropriate.
6. Share your experiences with other nonprofits; tap into the expertise within your own network and the state fund raising professionals’ association. If you hire a consultant, check with peers for references, develop specific goals, and don’t develop a percentage arrangement.
Anne Hays Egan is an organizational development consultant to nonprofits. She provides information, resources, newsletters, fund-raising plan outlines, and many other materials from her website, Nonprofits Online http://www.nonprofitsonline.net
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