The operation of a development organisation depends heavily on fundraising. This module focuses on the what, who, why, and how of fundraising and outlines the stages for developing a fundraising strategy. There are useful tools and examples across all core processes from procurement to utilization of funds.

Fundraising Strategy

The starting point

A fundraising strategy is a blue print for the fundraising process. With the right fundraising strategies, small nonprofits can find donors who share the mission and want to form lasting partnerships with the organization. It starts with the vision and mission and plan based on which specific goals are defined. Without a clear set of priorities, it becomes impossible to research, prioritize, and plan for appropriate funding “asks.” The fundamental purpose of strategic planning is to bridge the organisations’ vision and mission. Strategic planning involves developing overall goals and separating it into planning phases of short, medium- and long-term frameworks and solutions to fit the timeframes. The different time frames help the organisation to focus on the time – sensitive aspects of the organisation

Need for a fundraising strategy

Requisites for formulating a FR Strategy

The strategizing process

An organization that is on a growing trajectory and which needs to sustain that growth needs a set of strategies to guide its growth, build a solid financial foundation, and prepare for challenges that lie ahead. Alternatively, it requires a solid strategic plan.

Strategic management is the process of selecting an organization’s goals, determining the programs necessary to achieve specific objectives enroute to the goals, and establishing the methods necessary to assure that the policies and strategic programs are implemented. Strategic management is the long-range planning process used to define and achieve organizational goals

Please refer FR Playbook for a detailed process

Steps for strategizing process

Step 1: Fundraising Audit

A fundraising audit is performed to assess the status of the current fundraising efforts, to identify strengths and weaknesses, and areas for growth

Audits conducted canbe of these three types

  1. Audit of trends for the past few years as the organization may decide which will provide macro view of the Fundraising Program and outcomes fundraising program’s strengths, identification of any weaknesses, and recommendations for taking advantage of untapped revenue and growth opportunities.
  2. Audit of the major programs to draw insights into the program details, inefficiencies if any and identify any aspects that would require improvements
  3. Audit of the fundraising performance to identify inadequacies and improve key performance Indicators ( KPI)

Step 2: Perform Organisational Analysis

Conduct SWOT Analysis and PEST Analysis:

  1. These are analytical tools and closely related approaches that helps to identify the key external and internal factors to be considered to have an understanding of the changes that may occur and the impact that these changes may have on the organizations/programs
  2. They are usually used together, and are applied in a group setting to support effective strategic planning, decision-making and action planning.
  3. These are cost- and time-efficient measures for identifying the key issues relating to the context of a project or initiative which, if not identified and addressed, could critically affect the chances of success.

Step 3: Income and Portfolio Analysis

  1. Financial sustainability is the key to the long-term stability of any non-profit and its ability to serve its constituents. Non-profit organizations face sustainability issues as, their primary revenue sources stem from donations and grants. Hence most nonprofits rely on a mix of sources for their income, and their funding can come from diversified sources like individuals, foundations, corporations or government. Some non-profits sell goods or services to generate revenue.
  2. It’s important to diversify the revenue stream and have a healthy mix of funding sources. The advantage of having a diversified revenue stream reduces the financial stress during times of economic decline by relying on fixed donor pools or single source of funding. Alternative revenue sources provide the diversification to create a more stable organization

Diversify Revenue Streams in Non-Profits

Step 4: Strength of the Program

A key step on the way to strategic planning is to have a detailed look at the quality of programs (projects or services) offered to end beneficiaries. The purpose of this exercise is to look at two key elements:

  1. How the potential donors are attracted to the programs of the non-profits and whether the nonprofit has created value that the potential donors are able to recognize and thus inspired to give.
  2. Secondly the organisational strength and effectiveness in its key areas of leadership decision making, people and talent, internal systems, processes and culture

Step 5: Fundraising Performance Analysis

In order to improve the outcomes of the fundraising efforts, you need to measure, analyse results, and improve performance over time. The important question to ask is what should one measure to understand if the performance has been a success or requires improvement?

There are several Key performance Metrics that can give a clear picture on the effectiveness of the overall fund-raising effort of the organisation. Collection and timely analysis of the data into meaningful metrics allows an organisation to identify strengths and weaknesses and determine where the greatest opportunities lie. Measuring the performance is a crucial step that nonprofits must take to succeed. Some of the Key Performance Metrics (KPI) are as indicated below.

For detailed process on Performance Analysis Please refer FR Playbook/Unit 6- Performance Measurement.

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