Free Micro e-MBA Module #9

Basics in Developing Your Fundraising Plan

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

Some of this program is based on materials adapted from the Nonprofit Capacity Building Toolkit(SM). This module is in the nonprofit organization development program. However, this module can also be used by anyone as a self-study exercise to learn more about nonprofit fundraising.

Sections of This Module Include the Following

Introduction
Outcomes
Materials for Review
Suggested Topics for Reflection and Discussion
Activities to Build Systems and Practices
Assessments
Tracking Open Action Items



INTRODUCTION

Raising funds to operate your organization and its programs is very likely one of the most important activities for your nonprofit. Many nonprofits obtain necessary monies from fees and sales (that is, from sources other than donations). However, if your nonprofit counts on donations, then this module will be very useful to you.

This module will guide you through basic considerations and activities that address the questions:

  • What is fundraising?
  • Are you ready for fundraising?
  • What are the standard sources and how are they approached?
  • What's the board's role in fundraising?
  • How is a proposal written?
  • How can fundraising software help me?
  • Should you use a fundraiser and/or grantwriter?
  • How can the Internet and Web help you with your fundraising?
  • How is the overall health of your nonprofit's fundraising activities?

NOTE ABOUT PERSPECTIVES: As you'll soon notice, there are many, major different aspects of nonprofit fundraising. There also are many specialists in most of the aspects. Thus, it's not uncommon that there are very diverse, strong opinions about how fundraising should be done. This module aims to convey the basics and many of the "best practices" in fundraising. Many consultants might have different opinions about some of the perspectives in this module, but most would probably agree with most of the perspectives in this module.

NOTE ABOUT BOARD COMMITTEES: Consider establishing a Board Fundraising Committee to review and guide implementation of key information in this learning module. Major activities and goals from this learning module could be incorporated in that Committee's Committee Work Plan.



OUTCOMES

  1. Learn Common Sources of Funding
  2. Understand the Board’s Role in Fundraising
  3. Assess if You're Ready for Fundraising
  4. Learn Who Should Ask for Money, How Much
  5. Recognize Best Practices in Annual Appeals, Events, Major Gifts and Capital Campaigns
  6. Learn Key Components of Grant Proposals
  7. Draft Your Fundraising Plan
  8. Evaluate Your Fundraising Practices


MATERIALS FOR REVIEW

  • The following materials will help you address each of the topics and learning activities in this module.

All About Fundraising -- particularly the sections: - - -
Fundraising Basics (optional to read more than the 2 below)
- - - Know Your Organization (read all)
- - - Nonprofit Fundraising Demystified (read all)
- - - Overview of Nonprofit Fundraising Sources and Approaches (read all)
- - - Are You Ready for Fundraising? (read all)
- - - Rating and Evaluating Prospects: Whom Do You Ask For How Much
Fundraising and the Law (optional to read more than the 1 below)
- - - New Form 990 Makes Fundraising Registration Unavoidable (read all)
Fundraising Leadership (optional to read more than the 3 below)
- - - Leadership: The Board's "Mythunderstood" Role in Fundraising (read all)
- - - How Do I Get My Board Involved in Fundraising and How Much Should a Board Member Give? (read all)
- - - Role of the Nonprofit Board Fundraising Committee (read all)
Development Staff: Defining, Hiring, Evaluating and Firing (optional to read more than 4 below)
- - - Does Your Organization Need a Director of Development? (read all)
- - - When The Development Officer Is Obliged To Raise Her Or His Own Salary (read all)
- - - Asking For The Money Is The Job Of The Leadership And Friends ... (read all)
- - - Wearing Those Development and Marketing "Hats" at the Same Time (read all)
Direct Appeals (optional to read more than 2 below)
- - - Direct Mail Fundraising is a Program, Not a Campaign (read all)
Grants: Foundation and Corporate (do read more than the following 3)
- - - Grants: Free Money -- Not Quite! (Part 1) (read all)
- - - Grants: Free Money -- Not Quite! (Part 2) (read all)
- - -Proposal Writing Short Course (scan through sections for now)
Special Events (optional to read more than 3 below)
- - -What is a Special Event? (read all)
- - -Special Events -- So Misunderstood (read all)
- - -Events to Remember -- Events to Forget (read all)
Annual Funds or Annual Campaigns (optional to read more than the 2 below)
- - -Annual Campaigns: Once A Year Every Year (read all)
- - -The Annual Fund is Obsolete (read all)
Major Gifts and Planned Giving (optional to read more than 4 below)
- - -What is a Major Gift? (read all)
- - -Asking For The Major Gift -- Part 1 of 3 (read all)
- - -Asking For The Major Gift -- Part 2 of 3 (read all)
- - -Asking For The Major Gift -- Part 3 of 3 (read all)
Capital Campaign and Endowment Fundraising (optional to read more than 2 below)
- - - Phases of a Capital Campaign (read all)
- - - Capital Campaigns – Part #1: What They Are (read all)
- - - Capital Campaigns -- Part #3: Are You Ready for a Capital Campaign? (read all)
Fundraising Online (optional to read more than 2 below)
- - -Elementary E-Philanthropy (read all)
- - -Online Fundraising: A Startup Guide (read all)
Donor Recognition (optional to read more than 1 below)
- - -The Art of Recognizing and Thanking Donors (read all)
Fundraising Planning (Tying It All Together) (optional to read more than the 1 below)
- - - 6 Steps to a Fundraising Plan for a New Nonprofit (read all)
Hiring Fundraisers and Paid Solicitors (optional to read more than the 2 below)
- - -Do's and Don't's of Hiring a Grantwriter (read all)



SUGGESTED TOPICS FOR REFLECTION AND DISCUSSION

  • Learners are strongly encouraged to discuss the following questions with peers, board members, management and staff, as appropriate.

Fundraising Basics

1. What are at least 5 of the 9 aspects of an organization that should be known before doing fundraising, as asserted by the author in Know Your Organization?

2. What are at least 5 of the 9 truths that the author asserts in Nonprofit Fundraising Demystified?

3. What are at least 5 of the major 9 sources of funding described in Overview of Nonprofit Fundraising Sources and Approaches?

4. What are some of the advantages and disadvantages of getting funds from individuals? Foundations? Corporations? Government? (See Overview of Nonprofit Fundraising Sources and Approaches.)

5. If a fundraising campaign is to be successful with an individual, what are the 3 things we must do with the donor? (See Rating and Evaluating Prospects: Whom Do You Ask For How Much.)

Fundraising and the Law

1. The Form 990 asserts that nonprofits must register in each state they are to do fundraising, especially if their budgets are over how much?. (See New Form 990 Makes Fundraising Registration Unavoidable.)

Fundraising Leadership

1. What are 3 of the 5 strategies to get the Board involved in fundraising? (See Getting the Board Involved in Fundraising.)

2. What are the 3 myths asserted by the author in Leadership: The Board's "Mythunderstood" Role in Fundraising?

3. What is the role of the Board's Fundraising Committee? (See Role of the Nonprofit Board Fundraising Committee.)

Development Staff

1. Who should ask for the money -- the hired fundraiser or the Board and staff of the nonprofit? (See Asking For The Money Is The Job Of The Leadership And Friends...)

2. What are at least 2 of the reasons that the activities and responsibilities of fundraising and marketing should not be combined? (See Wearing Those Development and Marketing "Hats" at the Same Time.)

3. Should your nonprofit have a position of Director of Development? If so, should it be part-time or full-time? (See Does Your Organization Need a Director of Development?)

4. Should a Director of Development do fundraising to raise his/her salary? What? (See When The Development Officer Is Obliged To Raise Her Or His Own Salary.)

Direct Appeals

1. What's the differences between a direct mail program and a direct mail campaign? Why is direct mail best done as a program? (See Direct Mail Fundraising is a Program, Not a Campaign.)

Grants: Foundation and Corporate

1. What are at least 4 of the 5 things that the author asserts you must describe in a grant proposal, in Grants: Free Money -- Not Quite! (Part 1)?

2. What is the importance of reporting back to the funder? (See Grants: Free Money -- Not Quite! (Part 2).)

3. What are at least 5 of the major components of a proposal? (See Proposal Writing Short Course.)

Special Events

1. What is a special event? What are at least 4 of the 6 criteria that the author asserts are needed in a special event, in What is a Special Event?

2. What was the major misunderstanding about special events as portrayed in Special Events -- So Misunderstood?

3. When is a traditional gala, fancy auction event or cocktail party not the right choice, as asserted by the author in Events to Remember -- Events to Forget?

Annual Funds (or Annual Campaign)

1. What is an annual fund or annual campaign? (See Annual Campaigns: Once A Year Every Year.)

2. What are at least 3 of the 4 goals of the campaign, as asserted by the author in Annual Campaigns: Once A Year Every Year?

3. What is the wrong message that the author asserts is too often made in annual funds, in The Annual Fund is Obsolete?

Major Gifts and Planned Giving

1. What are at least 3 of the 4 criteria that needs to be met to qualify as a "major gift," as asserted by the author in What is a Major Gift?

2. When does the author say is the best time to ask for the money, in Asking For The Major Gift -- Part 1 of 3?

3. What phrasing should never be used, as asserted by the author in Asking For The Major Gift -- Part 2 of 3?

4. What is the right amount to ask for, as asserted by the author in Asking For The Major Gift -- Part 3 of 3?

Capital Campaigns

1. What is a capital campaign? Capital Campaigns – Part #1: What They Are.)

2. What are the phases of a capital campaign? (See Phases of a Capital Campaign.)

3. What are at least 6 of the 12 issues that must be considered to assess if you're ready for a capital campaign, as mentioned by the author in Capital Campaigns -- Part #3: Are You Ready for a Capital Campaign?

Fundraising Online

1. What are 3 kinds of companies that help nonprofits do fundraising online? (See Elementary E-Philanthropy.)

2. What are at least 6 of the 10 things that nonprofits should think about if they're going to do online fundraising? (See Online Fundraising: A Startup Guide.)

Donor Recognition

1. What is the best way to thank a donor? (See The Art of Recognizing and Thanking Donors.)

2. What are at least 3 things that donors want to hear about how their money was spent? (See The Art of Recognizing and Thanking Donors.)

Fundraising Planning (Tying It All Together)

1. What are 5 of the 6 steps to a Fundraising Plan? (See 6 Steps to a Fundraising Plan for a New Nonprofit.)

Hiring Fundraisers and Paid Solicitors

1. What are 2 reasons why a grantwriter should not be hired based on a contingency fee, that is, based on how much money he or she will raise? (See Do's and Don't's of Hiring a Grantwriter.)

2. What should you look for when hiring a fundraiser or grantwriter -- what are at least 3 of the 5 reasons to hire a fundraising consultant? (See Hiring a Consultant.)

3. What are at least 5 benefits of hiring a fundraising consultant? (See Hiring a Consultant.)

4. What are at least 4 of the 5 things to consider when selecting a fundraising consultant? (See Hiring a Consultant.)



ACTIVITIES TO BUILD SYSTEMS AND PRACTICES

  • Learners are strongly encouraged to complete the following activities, and share and discuss results with peers, board members, management and staff, as appropriate.
  • As you proceed through the following activities, be sure to note any incomplete actions in the Action Item Planning List.
  • Write down your answers to the following questions -- those answers can be compiled into your Fundraising Plan.

1. Fundraising Preparation

1. Is your organization really ready for fundraising? How do you know?

2. How will the Board be involved? Remember that Board members should be very involved -- it's not just the CEO's job to raise funds.

3. What will be the role of the Fundraising Committee?

4. Who else will be involved and how?

2. What Are Your Fundraising Goals? How Much Should You Ask For? By When?

1. How much money will your organization ask for? Is it for operating costs or a capital campaign? How did you determine this amount?

2. How much will go to programs, that is, to directly serving clients? How much will go to indirect costs, that is, to administrative overhead?

3. How much will the fundraising activities cost, for example, office supplies, if you hire a fundraising consultant, etc.?

4. By when will you need the money?

3. What Sources Will You Approach? How? When? Who Will Approach Them?

1. What specific funders will you approach and how? Among individuals? Foundations? Corporations? Government?

2. Who will approach each source? It should not just be the CEO who always takes the lead. Perhaps the Board members need to be trained about fundraising -- who will do that training?

3. How will you approach each source? Remember that each might prefer to be approached differently -- see their guidelines for solicitation. Also remember that startup nonprofits rarely receive grants -- they usually get funding from individuals.

4. When will each source be approached?

4. Should You Hire a Fundraiser -- and If So

1. Should you hire a fundraiser? If so, then why? If not, they why not?

2. If you decide to approach a fundraiser, what might he/she want to know about your organization?

3. If you hire a fundraiser, how should they be paid? How do you know?

5. How Will You Monitor That Donor Requirements Are Being Met?

1. Major funders, such as foundations and corporations and the government, will want reports about the status of meeting their requirements. How will you ensure those requirements are being met?

2. Who will provide regular reports to the donors?

3. Who will provide donor recognition letters or other forms of communication?

6. Fundraising Software

1. What software might you need to better manage your fundraising efforts? What must you consider when getting this software?

7. Draft Your Fundraising Plan

1. By now, you have already developed the basic components of a broad fundraising plan. You can compile your plan by collecting your answers to the above questions.

2. Obtain board approval of your fundraising plan. (If you have been working with a board committee to answer the questions and conduct the activities suggested in this module, then board approval should be fairly straightforward at this point.)



ASSESSMENTS

1. Answer the questions about "Fundraising Indicators" in the Checklist of Nonprofit Organizational Indicators. List an action plan to complete items suggested by the audit, but not done by your organization.

2. Also see Campaign Assessment and Review: What Was Accomplished and What Was Learned.

3. Also see Evaluating Your Fundraising Knowledge and Practices



REMINDERS FOR THOSE IN THE ON-LINE DEVELOPMENT PROGRAM

1. Are you exchanging feedback with others about what you're learning in this program?

2. Are you sticking to your study schedule for this program?

3. Are you practicing your basic skills in management and leadership, including in problem solving and decision making, planning and meeting management?

4. Are you communicating throughout your organization by using your skills in internal communications?

5. Are you managing yourself? How many hours a week are you working? Are you noticing any signs of stress? If so, what are you doing about it?

6. One of the ways you might be able to tell if you're stressed out and/or losing perspective might be whether you're tracking details or not. Are you using the action item list referenced above?

7. Are you reflecting on learnings from past modules and how they build on the learning in this module? For example, are you seeing your organization from a systems view, as explained in the module "Starting and Understanding Your Nonprofit?"



TRACKING OPEN ACTION ITEMS

1. One of the first indicators that an organization or a person is struggling is that open action items are not tracked and reviewed. (Open action items are required actions that have not yet been completed.) Instead, people only see and react to the latest "fires" in their workplaces or their lives. Whether open action items are critical to address now or not, they should not entirely be forgotten. Therefore, update and regularly review a list of open action items (identified while proceeding through this program) that includes listing each open action item, who is responsible to complete it, when it should be completed and any associated comments. When updating the list, consider action items as identified during discussions, learning activities and assessments in this module. Share and regularly review this action item list with the appropriate peers, board, management and employees in your organization. You can use the following Action Item Planning List. (At that Web address, a box might open, asking you which software application to open the document.)

2. If you have questions, consider posing them in the national, free, online discussion group HRNET, which is attended by many human resource and organization development experts.



(Learners in the nonprofit organization development program can return to the nonprofit organization development program.)


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For the Category of Fundraising (Nonprofit):

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

Fundraising Basics, Overviews and Planning

Fundraising Proposals and Grantwriting

Fundraising Events

Major Gifts and Planning Giving

Capital Campaigns

The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click on the title of the book in that bubble to get more information, too.



Fundraising Basics, Overviews and Planning

The following books will give you a sound understanding of the most important principles and practices for successful fundraising. Books in the following sections go into more detail about the most common, major forms of fundraising. Before proceeding to those other sections, it would be wise to understand the fundamentals in fundraising as explained in the books in this section.

Nonprofit Program Design, Marketing and Evaluation - Book Cover Field Guide to Nonprofit Program Design, Marketing and Evaluation
by Carter McNamara, published by Authenticity Consulting, LLC. There are few books, if any, that explain how to carefully plan, organize and develop a nonprofit program to appeal to funders. Also, too many books completely separate the highly integrated activities of planning, marketing and evaluating programs. This book integrates all three into a comprehensive, straightforward approach that anyone can follow in order to provide high-quality programs with strong appeal to funders. Includes many online forms that can be downloaded. Many materials in this Library topic are adapted from this book.

Fundraising Proposals and Grantwriting

Grants are often viewed as the most common form of fundraising, although individual appeals (in the form of direct appeals and events) are just as -- or more common -- than grants. Before reading more about grants, be sure to understand the most important principles in fundraising as provided in the books in the above section "Fundraising Basics, Overviews and Planning."


Fundraising Events

Fundraising events are a very common form of fundraising, although they often require extensive time and effort. Before reading more about events, be sure to understand the most important principles in fundraising as provided in the books in the above section "Fundraising Basics, Overviews and Planning."


Major Gifts and Planning Giving

Pursuing major gifts and planned giving (for example, donations from major estates) can seem like an approach to get significant contributions. However, these forms of fundraising usually require significant time and effort, as well. Before reading more about major gifts and planning giving, be sure to understand the most important principles in fundraising as provided in the books in the above section "Fundraising Basics, Overviews and Planning."

Capital Campaigns

Capital campaigns are undertaken when an organization needs to raise substantial sums, usually to develop or procure a major asset, such as land or a building. Before reading more about capital campaigns, be sure to understand the most important principles in fundraising as provided in the books in the above section "Fundraising Basics, Overviews and Planning."

Also See for Nonprofits

Strategic Planning -- Recommended Books

Social Entrepreneurship (Nonprofit) -- Recommended Books

Capacity Building (Nonprofit) -- Recommended Books

Financial Management (Nonprofit) -- Recommended Books

Program Management -- Recommended Books

Planning and Project Management -- Recommended Books

Volunteers -- Recommended Books




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