Why You Need a Long-Term Fundraising Plan: 7 Compelling Reasons
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While fundraising plans are always a good idea, they can be especially helpful during challenging times like these as nonprofits grapple with Covid-19 and the recession set in motion by the pandemic.
A fundraising plan outlines organizational goals and provides a roadmap that explains how to pay for those goals; which programs and activities will take place; and how to stay on course when distractions or setbacks occur. This last aspect will be especially important in 2021.
If your organization is working to diversify its revenue, a written plan identifies which new fundraising efforts it will invest in and estimates the amount of time before those investments show a return.
Heather Yandow of Third Space Studio conducted years of research showing that nonprofits with a formal plan raise more money than those without and that multi-year plans are vital to sustained growth.
If you've never created a fundraising plan, crafting an annual plan is a good place to start. However, a one-year plan alone limits a nonprofit to incremental growth because all efforts are focused on producing a return within a single fiscal year.
Ideally, organizations should map out a multi-year plan that includes investments in expanding fundraising activities. This could mean hiring more fundraisers, engaging a consultant, or investing in an upgraded database.
Decisions about these types of investments must be driven by their potential to bear fruit — and the time needed to produce a return. A three- to five-year plan gives this perspective and serves as a roadmap to track those investments and their returns over time.
7 Benefits That Go Beyond Increased Revenue
The benefits of a strong multi-year fundraising plan go beyond increased revenue. It can increase efficiency, motivate staff, support growth, and make your nonprofit a more attractive investment. A strong multi-year plan can:
Help clarify organizational goals. A fundraising plan is not created in a vacuum. It must align with the organization's goals and strategies. These goals may be linked to programs, such as expanding into new service areas, or tied to organizational needs, such as technology upgrades. Incorporating goals into a realistic plan will require that goals be clear, measurable, financially feasible in relation to known resources, and appealing to donors.
Lay the foundation for future investments and growth. Many investments should only occur after certain requirements are met. For example, hiring a gift officer may be triggered by qualifying a certain number of major donor prospects. A solid plan lays out these requirements, and when they are met, an organization knows it's the right time to invest in a particular area.
Increase buy-in among leaders. Fundraising isn't a dark art, but even the most seasoned board members and program experts may find it mysterious. A plan provides clarity by sharing:
- Analysis that justifies income-growth goals
- Short- and long-term investments that are needed to expand fundraising activities and an expected timeline for seeing a return on those investments
- Benchmarks and milestones to evaluate progress toward goals
Educating decision makers will help maintain their commitment and enthusiasm over the life of the plan. A formal plan also helps maintain momentum through changes in executive leadership, board, and staff.
Show everyone where they fit and even highlight a need for reinforcements. Fundraising is a team sport, and a good fundraising plan informs everyone in an organization where they need to be on the field. Moreover, a strong multi-year plan illuminates the strengths and weakness of current staff and board members and guides decisions related to staffing needs and board recruitment.
Help decision makers weigh opportunities and challenges. A plan that accurately projects anticipated returns on investments can help people stay the course and avoid pursuing a "shiny new object" to the detriment of long-term goals. Likewise, when faced with an unexpected challenge, the plan can help inform decisions about the effects of short-term resource allocation.
Provide a blueprint for accountability. A smart plan identifies benchmarks to track besides the amount of money raised. Many factors influence fundraising results, so measuring improvements in click-through rates for digital fundraising, or qualification of 100 percent of prospective major donors, can help impatient board members see progress and stay supportive.
Meet a demand from high-net-worth donors and foundations. More than ever before, those who can make transformational gifts want two things: a vision for exceptional change that excites them and a belief in an organization's sustainability.
From foundations, the demand for a fundraising plan will likely be explicit. The same is true for high-net-worth individuals, especially if they come from the business world. Major-gift fundraising is no longer just a "feel good" enterprise; it's a venture-capital investment, and donors are looking for measurable results and a plan for sustainable growth.
For all of these reasons, developing a multi-year fundraising plan is essential for any organization that seeks to grow consistently and keep everyone in the organization working toward a common vision.