Now that you’ve developed a strategic plan and measurable objectives for your nonprofit, it’s time to get to work. Well, sort of.
You may have the best intentions in the world, but without funding sources to implement your organization’s strategies, you’re just spinning your wheels. Think of it like a boat without a rudder.
But you shouldn’t just go out and find the first funding source available. That creates undue and perpetual stress. It’s smarter to create a development plan with myriad revenue sources, including grants and other fundraising activities.
Each funding source should have clearly defined goals and targets so everyone involved in the fundraising process remains focused on the task at hand. By setting clearly defined fundraising goals, your organization can celebrate successes and avoid the burnout that comes with abstract targets.
How do you create a development plan, you ask? It’s not as difficult as it sounds.
First, identify several funding sources and create a realistic revenue mix to support a development plan. Don’t simply pull numbers and percentages out of the air. Look at benchmark organizations’ revenue mixes. They’re usually found on an organization’s annual reports or IRS Form 990. Include growth projections based on the benchmark organization’s performance. If your organization’s growth differs significantly, project incremental increases that align with your industry’s average.
The next step is thinking strategically about the funding sources that make up your development plan. If you haven’t already, here are some options you should consider.
An Annual Fund
This is really a catch-all term for your organization’s fundraising activities that stimulate regular giving. Your annual fund will encompass:
- Personal solicitations,
- Telephone campaigns,
- Direct mail,
- Paid advertising or earned media, like news coverage,
- Online solicitations through social media and/or your website.
Along with raising money, the annual fund serves other purposes as well. It raises awareness of your organization and its mission, and it allows you to collect data about current or prospective donors.
The annual fund is quite important to your fundraising success, and it will require an investment of resources. But you can’t put all your eggs in this basket. Why not? Statistics show that the grand majority of nonprofits receive less than 10 percent of contributions from direct mail, less than 10 percent from online solicitations and less than 10 percent from phone campaigns. That leaves about 70 percent left to generate from other sources. Fortunately, the annual fund is a good launching pad to build the rest of your development plan.
A large financial gift from a donor is a boon to any organization, but it doesn’t come without work. Growing engagement with potential donors takes time and effort. Before you can solicit a major gift, you’ll need to move potential donors along a continuum toward solicitation. Engagement and communication with your organization along with an analysis of each donors’ estimated giving capacity are key tactics when seeking major donors. Most importantly, every member of your organization—from the c-suite to the front lobby—should recognize that every interaction with another person is an interaction with a potential donor, regardless of the size gift.
Grants can significantly enhance your development plan but finding success with grants requires credibility. To appear credible to the state and federal agencies that administer large (think greater than $100K) grants, you must be able to show an impact in your community as well as exhibit sound financial stewardship. There are ways to position your organization—regardless of its size—for success with governmental grant programs. First, your organization should develop a private funding base of $100,000 drawing from individual donors, corporate, family and private foundations. Second, you could partner with an existing grantee or applicant who will assume responsibility for the financial administration of the grant.
Include planned giving materials on your organization’s website, and send a direct mail piece annually to planned giving prospects. Identify planned giving prospects from among major donors. For assistance in this area, refer to the AARP Foundation’s comprehensive planned giving program.
While special events usually have a fairly low return on investment, these events offer great opportunities for increasing engagement and supporting stewardship. These events allow you to recognize and thank donors while courting non-donors who want to support your organization’s mission.
Don’t limit sponsorships to events. Any project is a potential opportunity to solicit sponsorships. An event/project marketing plan should include benefits for sponsors such as recognition on social media, on your organization’s website and in press releases. Sponsor logos can be incorporated into apparel or even in your organization’s annual report.
If you need help creating a development plan, we’re here for you. From identifying appropriate benchmarks and setting realistic targets for an optimum revenue mix through selecting the right activities to reach those goals, we can help your organization identify a sustainable funding stream to turn your strategic plan into an impactful reality.
Ginger Keller-Ferguson, MBA