Fundraising Basics – Planning Continued

Last week we began this series and I focused on the benefits of planning that allow you to do the following:

  • Clarify your mission, vision, core values and strategies
  • Identify your critical planning issues
  • Establish your priorities
  • Focus your direction, decision-making and resources
  • Enhance your communication and teamwork
  • Increase your efficiency and effectiveness

Now today I want to cover what planning should include and what CEOs and Board members can expect from a planning process:

A review of the previous 3-year performance in specific source areas

In order to develop a realistic plan on where you’re going, it’s important first to know where you’ve been. When we help with nonprofit strategic planning, we normally review sources of funding, levels of giving, direct mail performance, donor retention, events and every other area that produces funds. We also review communication vehicles including social media, web site, marketing efforts and more because all of these are related to fundraising.

A statement of critical issues, and the creation of goals and a plan with strategies for each area

Once you review past performance, you can begin to develop a future plan. If you aren’t willing to do that kind of analysis, then you’re prone to setting unrealistic goals based solely on what you need.

For example, we worked with one institution in higher education that had not done any review at all before establishing some very unrealistic goals. In fact, the goals were created primarily by the CFO based solely on need with no input from the new Chief Development Officer. Specifically, they set a goal to raise their annual giving from $800,000 to $1,500,000 in a little less than 3 years. That’s an 87.5 % increase in a very short period of time and also at a time when giving to higher education was in decline nationally.

This also occurred at a time when the institution was moving into a capital campaign. The goal just wasn’t tied to reality and therefore, even though the Chief Development Officer made excellent progress by increasing donations, they failed to achieve the goal.

The creation of a budget to get there

Once you have a plan it should lend itself to creating a budget to fund the activities in your plan. We recommend zero-based budgeting, where you justify each line item annually. That forces people to really think about how to eliminate waste and increase productivity.

The development of a fresh statement of your case with your vision and areas of focus

The same old case tends not to excite people. When I was in higher education we had a few high net worth donors tell us that they were more interested in where we were going and what we might do than what our current needs were. Not that operational needs aren’t important, they are, but they can often be stated more specifically than the “annual fund.”

A call to action with accountability

Plans are nothing if there is not action attached to them. As I said last week, a good plan is one that prompts action, and that action increases efficiency and effectiveness. However, without people acting upon those plans, they simply represent some good ideas that we may implement one day. Also, not only should people act on those plans, but also they need to be held accountable for doing so.

Next week we will discuss more specifics on what exactly it is that we believe should be reviewed before developing your plan.