How to Create a Fundraising Plan for a New Charity
Classic Methods That Work
All charitable organizations are faced with a daunting task almost immediately: fundraising.
Public charities, also known as 501(c)(3)s by the IRS, not only must support themselves as they work on fulfilling their missions, but much of that support must come from the public. That is the mandate for public charities.
To receive that public funding charities must run fundraising campaigns directed toward individual donors.
Not all income for your nonprofit will come from individual donors. There will be foundation grants to be sought, and you will be able to charge fees for services, sell merchandise, and sell tickets for performances. That revenue is called "earned" income, and many charities benefit from establishing these income sources.
Nevertheless, there is no avoiding fundraising, preferably using a multitude of techniques and strategies.
With the mass of fundraising advice, sources, strategies, and tools, a new nonprofit, just getting started with its fundraising, can be more than confused. Here are six simple steps to get you started on a successful fundraising plan.
Develop Your Fundraising Goals
You should have goals for the amount of money you need to raise, plus what the funds will be used for.
Will you use it for overhead expenses? To fund an ongoing or new program? To build a new facility? To develop an emergency fund for a future rainy day? To close a deficit?
You will likely have several goals. If so, develop a fundraising plan for each one. Goals should be designed with your board of directors, and have the board's sign-off.
Getting your board involved will also set the stage for their active help with fundraising.
Write Down Your Fundraising Plan
It is essential not just to fly from one fundraising scheme to the next. Develop a written plan that states how much you need to raise, from what sources, and how you will do it.
Don't worry; you can revise the plan as you go along. Not all of your ideas will work out, or you may find new sources along the way.
Start with your current programs and funding. Is that amount of money covered, or is there a gap? Do you want to do more but lack the funds?
This preliminary financial accounting will help you arrive at what your monetary goal should be for your fundraising.
Estimate How Much Your Fundraising Program Will Cost
Include costs such as postage, creating your website, running special events, the cost of staff dedicated to fundraising, and the personnel costs of managing the volunteers who will help you raise funds.
Be realistic when estimating costs, but plan to use cost-efficient methods so that costs don't eat up all your fundraising proceeds.
There is no firm figure, but the IRS will see your income and expenses when you file your annual 990 tax form and will expect that a good portion of what you spend goes to your programs, not executive salaries or perks.
In other words, most of your expenses should be spent on doing what you were founded to do.
Develop a Timeline for Your Fundraising Plan
Fill in a year's calendar with specific activities, and identify who will be the lead for each of those projects.
Go further by developing timelines for each fundraising activity, such as the annual fundraising campaign, the Giving Day you've chosen, or the special event. Anticipate potential grants (use a grants calendar and include time for researching, writing the proposal, and waiting for approval).
Plan time to consult with your board of directors and to train them about the part they will play in fundraising.
The timeline will undoubtedly change during the year, but having one to start with will ensure that you get something accomplished. Tweak the schedule as you go along, and at the end of the year, evaluate how it went and adjust accordingly for the next year.
Identify Funding Sources
Can current sources be leveraged to produce more income?
Are there audiences you are not tapping? Have you considered government or foundation grants? Civic groups, churches, or universities?
Evaluate Your Fundraising Plan During the Year
Evaluation will improve your results. Plan to evaluate what you are doing every few months.
What accounted for the successes? What were the biggest challenges? What should you change, drop, or add?
Once your organization gets the hang of raising funds for a year's operation, you'll want to move on to multi-year plans, higher goals, more sophisticated strategies, and newer techniques.