By Charmaine Farrugia
Fundraising strategy and why you can’t be without one
Fundraising strategy and why you can’t be without one
Charity consultants often criticise clients for their reactive approach to fundraising. But most charities are set up to react and respond to a problem; they exist to be responsive. The problem is, this reactive mindset can often translate into fundraising.
Charities have many reasons for being reactive rather than proactive: Funding constraints, understaffing, lack of experience and the age-old ‘but we’ve never needed this before.’
As a charity consultant I totally get this. Our team of fundraising consultants understand the challenges fundraisers face. We have all worked at the coal face. We know what it’s like to be a fundraising director, manager, team member, trustee and volunteer. We get it.
But we also know that a great fundraising strategy can be transformational. Working to a strategy will change the way you think about, plan and deliver your fundraising. It will save you limitless time and frustration. And it will help push you from reactive to proactive fundraising.
A fundraising strategy will also keep you focused on those activities that will generate the greatest returns. In short, it will enable you to fundraise more effectively and efficiently and raise more funds for your charity. It really is as simple as that.
Charity consultant or in house?
So you know you need a fundraising strategy. Should you use a charity consultant to help develop this? Or is this better done in house? That’s entirely up to you.
Bringing in some external expertise can be hugely valuable and will (and should) pay for itself many times over. And this is why many charities go down the consultancy route. It’s an area we do a lot of work in; in fact, strategy development is our most popular / in demand service we offer. Over half the enquiries we receive are from charities wanting help to create a fundraising strategy.
But if bringing in a fundraising consultant isn’t an option, you really can do this yourself.
There are lots of good online resources out there to help you get started with developing your strategy. The Charities Aid Foundation is a good place to start. And there are thousands of other blogs, resources and toolkits out there to help you. There are also lots of training courses and books about fundraising strategy. I particularly like the Directory of Social Change and SOFII.
How to create a killer fundraising strategy
So, what does a great strategy look like? This is one of the most common questions charities ask our team of fundraising consultants. The short answer is there is no proforma for a great fundraising strategy. And I know many other charity consultants who will say the same.
1) Situational analysis. Any decent charity consultant will tell you how important it is to assess your fundraising. What areas of fundraising are you investing in currently? How well is each one performing? What are your fundraising strengths, weaknesses, opportunities and threats? And what organisational barriers are hindering your fundraising success? There are many tools and resources to help you assess and analyse your performance. The simplest and best-known one is probably the SWOT analysis.
2) Fundraising targets: What income do we need to raise? In many smaller charities, the Finance Director sets these targets. And all too often, fundraisers have little or no input into this process. There is something fundamentally wrong with this approach. And sadly, this isn’t all that uncommon. Target setting needs to take into account your pipeline of funders and supporters. It also needs to reflect what you plan to do. Which donors and funders could make a first gift or grant to your charity next year? Plucking figures out of the air isn’t helpful for anyone. Mapping out your ‘universe’ of funders, donors and prospects is essential.
3) Budget: Fundraising targets tie in with the all-important question of budget? How much money is available to achieve your income targets? Where will you be targeting your fundraising expenditure? And what areas may you have to drop if the budget is too tight? To raise money, you need to spend money. It’s simple enough. But all too often we see ambitious (and sometimes ridiculous) fundraising targets set. And, at the same time, fundraisers are expected to achieve this with little or no budget.
4) Performance metrics, including non-financial ones: Defining and measuring success is key. Your strategy needs to outline what you will measure and how and why. The obvious way to measure fundraising performance is of course income. But non-financial performance indicators are also crucial. Relationship building being one of the most important non-financial measures of success. Fundraising is all about relationships. We all know that. So, why don’t we measure our donor relationships? Nurturing those who support our charities isn’t just the right thing to do; research from the Institute for Sustainable Philanthropy shows that strong donor relationships equals an increase in income.
5) Tactical plan: Without a tactical plan, many fundraising strategies end up on a shelf gathering dust. As both a charity consultant and an inhouse fundraiser, I’ve seen time and time again how important it is to keep the strategy real. A practical, tactical plan is crucial. This can be something as simple as a spreadsheet that maps out month by month key activities, events, mailings and meetings. This ‘roadmap’ will help keep you focused and will help shift you and your team towards a more proactive way of working.
Your fundraising strategy needs to include a clear, tactical plan for the year.
The bottom line
The bottom line is that fundraising strategy isn’t an optional extra. It’s essential. And in today’s climate, having a fundraising strategy is more important than ever. It will help you focus on the right activities, enabling you to fundraise more effectively and efficiently. And, most crucially of all, it will help improve your bottom line.
For help and advice with fundraising strategy for your organisation, please get in touch.