Creating a Fundraising Strategy

"Luck is what happens when preparation meets opportunity." - Seneca

Planning is a key part to running any successful business. It is a best practice to create a plan for how your organization will acquire funds to operate its programs. There are different types of ways to raise funds for your organization. For a brief overview check out my blog on fundraising mix Don't Put All Your Eggs in One Basket. 

Knowing the different types of fundraising methods is only part of it. Not all methods fit every organization. You have to discover what methods work best for your organization. In other words, how will you combine the different funding sources into a strategy to raise funds for your organization? There are many ways to do this. Below is a list with a few pointers to get you started on creating a fundraising plan.

1. Establish Goals - how much money do you need to operate your nonprofit? How many new donors would you like to attract? How many events will you host?

2. Conduct an Asset Inventory:

• Board Asset Inventory- what do your board members have to offer? Do they offer connections and networks to major businesses or individuals? Do they have marketable skills that are related to your mission? 

• Organizational Asset Inventory - what resources are already present within your organization? If earned income was considered as part of the strategy, can the organization structure support running an enterprise along with its programs? 

3. Analyze History - what activities were successful for your organization in the past? What grants were you qualified for that you can apply for in the upcoming year? What are other nonprofit organizations similar to your organization doing that is successful? Are they soliciting a lot of individual donations? Are they successful with obtaining a lot of grants? What are some of the foundations that support their work? 

 
4. Create a Plan - The plan does not have to be a long narrative, but it does need to be clear as to who is responsible for what activity, when is each activity, and what is the projected income from each activity. One way is to create a calendar. The calendar should include each month, a list of activities, the person responsible and the projected income from each activity. 

See an example of a fundraising calendar: 

Here are a few samples of fundraising plans:
North Sky Nonprofit Network Fundraising Plan

People Powered Movement Fundraising Plan

Don't Put All Your Eggs in One Basket

Many have heard the saying, "Don't put all your eggs in one basket." This is a good rule to apply to fundraising. To the degree that your organization is able to, it should incorporate at least two or three types of funding sources in its fundraising strategy. 

Many start-up nonprofits think of soliciting grants first to fund their organization. Grants are a great source of support, but they have limitations. Most funders give grants for a specific purpose so grants are many times considered a restricted source of funds.  Also, most foundations want to see a track record of your work. So you will have to do something before they give you money. Some will only give you money once, so you will have to find another funding source to replace them when their funding term is complete.

Again, grants are a great source of funding, but you have to diversify. In fact, many foundations will ask about the sustainability of your project exclusive of their funding. Diversity of funds will provide a more sustainable flow of income for your organization. 

During a class at the foundation center in Atlanta, the instructor gave a great illustration of the funding mix. Picture a stool with three or four legs. The seat of the stool is your organization's

programs and the legs of the stool are the different funding sources that support your programs.

Below are different sources of funding to incorporate into your fundraising strategy.

Earned Income -
Earned income is when you sell goods or services that are directly related to the mission of the organization.  An example of this would be a nonprofit theater organization that sells tickets for its plays. Putting together a theater production is the mission of the organization and they sell tickets for the patrons to see it. There are several things to consider before embarking on an earned income strategy.  Nevertheless,  it is still a viable income source to consider.

Grants -
Grants are a free source of income that usually covers the cost for a specific purpose of the organization. Usually they are called restricted funds on financial statements.  Organizations need to meet specific criteria to qualify and usually have to submit an application. Many times grants provide large sums of money versus individual donations.

Events -
Events are a great way to let people know about your cause. They can be fun, but costly.  Know that to consider an event a success it has to bring in more than you spent to have the event.  Make sure to solicit as many gifts - in - kind to decrease the costs.

Individual Contributions -
This is a great way to raise funds. When you have a lot of individuals giving to your organization it helps broaden the risk. This is especially true when the economy is bad. The hope is that not all of your individual donors fall into economic hardship at the same time. Attracting individual donors does take a lot of marketing,  public relations,  and cultivating.

Corporate Sponsors -
Sometimes corporations will give funds to an organization to help spread goodwill and as a means for marketing their companies. Check out company websites and look for information regarding corporate social responsibility or call the marketing department as a start to reach the right person at some companies. Some companies have forms on their websites to complete.  

Gifts - in - Kind Donations -
As much as cash is needed and wanted, gifts - in - kind are also very valuable. Sometimes they can be more valuable than cash. Types of gifts-in-kind donations include free space, free items you need to carry out your programs, free office equipment, free food for a fundraising event,  to name a few. Some organizations list needed gifts-in-kind donations on their websites.

So there are various types of funding sources.  Let me know if there are any more that you know about. 

Before you Write the Grant

For many new nonprofit organizations, their first thought when it comes to funding their organization is to seek grants. Grants are a great way to fund a nonprofit. Many times, they offer a larger lump sum of money than what an individual can give. However, securing a grant takes many preliminary steps.

I spent some time volunteering with a major foundation looking for a qualified nonprofit to receive funding. Notice that I said that the foundation was looking for a qualified nonprofit. There are many foundations who no longer receive solicitations from nonprofits. They do not have a posted grant application process. Many foundations are inundated with grant requests and so at times there are other ways an organization will need to attract a foundation.

While a team of us looked for a qualified organization, we discovered several issues which quickly eliminated some organizations. Two of the major problems were 1) websites that were confusing or did not clearly provide viewers with a clear sense of what the organization did; 2) the organization’s activities were ineffective at solving the problem. This was revealed while we did site visits and realized there was a gap between the problem and the organization’s proposed solution.

So before your organization decides to seek grants, I suggest you get your organization ready first. Below are some questions to consider in preparing your organization to write grants:

        1)      Are you a 501 (c) 3?

Most foundations will require your organization to be a 501 (c) 3 organization. They will request your 501 (c) 3 letter as part of the application.

         2)      Do you have a website and does it clearly tell the story of your organization?

Websites are crucial to business ownership today. If anyone wants to know more about your organization, they will look for your website to learn more.

Your website needs to actually inform people about your organization. Make the message clear and easy to find.

Key headings to include:

·         Home

·         About Us

·         Programs/Services

·         Contact Us

·         Donate

Following are some basic questions your website should answer:

·         When was the organization established?

·         Who are the key players, what are their roles and credentials?

·         Why was the organization established?

·         What are the key programs/services?

·         What is the call to action/how can people help?

·         How will donations be used?

·         What is a suggested donation and what will it accomplish?

·         How can the organization be contacted?

If possible, try to fit the basic information about your organization on a single web page. This will help people have a complete understanding of the organization without having to piece it together visiting different web pages. Succinctly summarize the purpose of the organization, its programs, key people and what a suggested donation is and accomplishes.

           3)      If a foundation was to approach you to give you money, are you really ready to receive it?

This may seem like a ridiculous question. However, you really need to think through it. If an organization looked at your website and decided they wanted give you $25,000 do you know what you would do with it? Here is where a strategic plan comes in handy (by the way some foundations will request a strategic plan). Do you need to hire someone first or can volunteers do the work initially? Write out the steps that it will take to get from point A to point B.

           4)      When someone calls your organization, how quickly will they get a response?

You may not always be able to answer your phone, especially if you work full time doing something else. Does your voicemail state the organization name? Does it sound professional? How long does it take you to respond to your voicemail? If someone else is answering calls for you, are they friendly? Are they equipped to answer questions regarding the organization? Do they know your schedule or alternative ways to contact you?

            5)      Is there evidence that your organization is addressing a real need?

Do your research and provide that research for potential donors. Donors want to address a real problem. Sometimes donors are not aware of certain needs. Your research will show there is a real need and why it needs to be addressed now.

          6)      Is there evidence that your organization offers an effective solution?

Donors want to give to organizations that are solving problems effectively. Do you have evidence that your proposed solution is effective? Will it actually solve the problem or help to solve the problem? Does your organization have the capacity to solve the problem?

          7)      Are you ready with an evaluation plan or monitoring system to provide a foundation?

Some foundations request an evaluation plan as part of the grant request others want to track your progress and may request periodic reports that detail your progress. Do you have the necessary tools in place to provide them with this information?

          8)      Do you have a budget that realistically reflects the organization’s/project’s need?

Do you know how much it costs to run your organization or the specified project? All grant requests ask for a budget. Write out all the necessary costs and think of the various methods you will seek to fund the organizations. Donors do not want you to be solely dependent on their funding.

          9)      Have you created a case statement for your organization?

A case statement clearly states the purpose of your organization. It describes the need, your solution, and the call to action for others to get involved. See the following articles about making a case statement:

Making the Case for your Organization Part 1

Making the Case for your Organization Part 2

          10)   Do you have a strategic plan?

Some donors will want to see a strategic plan. The plan is actually beneficial for you. Do you know the direction you want to see the organization grow? How do you plan to get the organization there? Donors want to see that you thought about this. It gives them greater hope that you will be around for the long-haul.

          11)   Do you have a fundraising plan?

One question that foundations ask is how you plan to fund your project. This is where having a fundraising plan is helpful. Foundations like to know that your organization is not solely relying on their support, that you have other sources of income, that your project is financially sustainable, and that you have a plan.

          12)   Do you have externally audited financial reports?

For start-up nonprofits, this part may not be necessary initially. However, you should consider hiring an accountant to review your financial statements annually. I have seen foundations request third-party audited financial reports. You must display to donors that you are a financially responsible and credible organization.

I certainly hope this list of questions is helpful as your organization prepares for to write grants. Please let me know if there are other questions I should to list. I would like to hear from you.

Making the Case for your Organization Part 2

In Making the Case for your Organization Part 1, I detailed the elements of the case statement. In Part 2, I will walk you through writing a case statement. For some people just listing the elements is enough, but if you are like me, having someone walk you through the process is very helpful.

I am creating an organization for this exercise. Most of the facts are fictional. Any similarities of this organization to a real one are purely coincidental.

Sample Organization: Eat to Think Organization is an organization that provides food for schools in developing countries.

Key Questions to Answer in Developing Your Case

To help guide the process of developing a case statement, below are key questions to answer in developing your case:

1. Why does your organization exist?

 Eat to Think was created to provide nutritious meals to students and teachers who would otherwise go hungry or eat malnourished meals as a result of their personal financial situation.

2. What is the compelling need?

Children around the world barely have the funds necessary to attend school. Many go to school hungry or malnourished because their families cannot afford to feed them properly. As a result, many students fall behind in their studies or are just simply unable to reach the aptitude necessary to grasp what is taught.

3. What evidence is there that this is a pressing need?

Studies show that there is a connection between proper nutrition and good cognition. Studies in school children show that children who eat breakfast are better able to focus and learn.  

4.  Is your organization uniquely qualified to tackle this need?

 Our organization is comprised of staff and board members with backgrounds in education, nutrition and agriculture. These members brainstorm together to create and evaluate programs that will lead to students’ academic success while helping the economy of their loc al community. Our agricultural members work with farmers to teach them sustainable practices to help them nurture the ground, crops and adequately provide for their local community in a manner that will not negatively harm the health of those who live near their farms.

5. What is your proposed solution or activity?

Our solution is to provide meal programs to schools so that students are able to focus and learn, as well as be healthy. Poor nutrition can lead to academic failure and poor health. In addition, by working with local farmers versus shipping food from other countries to provide the meals we are helping to improve the local economy helping people to be self –sufficient versus co-dependent.

6. How will you measure your progress of solving the problem?

 We will use existing tests within the schools to see if there is an increase in cognitive development within the student population. We will measure the crop yields over time to see increases year over year. Furthermore, when a natural disaster hits, we will continue to measure crop yields to see how the farms were able to sustain through the disaster.

7. What will the proposed solution or project cost? Over what period of time?

On average, each school we help has approximately 500 members (students and teachers). To provide breakfast and lunch to 500 members is approximately $5,000 per year. We hope to provide 10 more schools with meal programs over the next three years. The total cost is $50,000. The farming partnership program cost is $1,000 per farm. This includes tools, education, seeds, and irrigation. We hope to partner with 20 more farming co-ops in the next three years. The total cost is $20,000. Other project related expenses bring the total cost of the project to $270,000 per year.

Information to Include in a Case Statement

1.   Introduction

                  a.     Inspiring

b.     Emotional

c.     Focused on an individual when possible (the power of one)

Eight year-old Jean Claude was an energetic, smart, and funny third grader. He was very attentive in school and scored well on his exams. In March of 2013, Jean Claude’s teachers noticed a difference in his energy and focus. He was coming to school very lethargic, he was having a difficult time retaining information and his academic performance was starting to suffer. His alarming academic decline prompted Ms. Pierre, the school administrator, to talk to his parents. It was then that she learned that Jean Claude’s family of six was struggling to feed everyone with the increase of food prices following Hurricane Sandy. What was equally heartbreaking for her was that Jean Claude’s story was just one of many students at her school. Ms. Pierre decided to look for solutions. She started asking for suggestions and donations among her colleagues, family, civic and religious organizations in her community. In this process, she learned of the Eat to Think School Feeding program.  A year later, Ms. Pierre is happy to report that Jean Claude is back to his energetic, smart and funny self. His parents continually express gratitude to her for caring enough for their son to seek and find a solution.

2. Background Information

1. History of the institution
2. Reason for its founding
3. Its mission
4. Noteworthy accomplishments

Eat to Think Organization was created in 2013 to respond to the growing food security problem in many developing countries. It started in Haiti first, after Hurricane Sandy ruined many crops causing the cost of food to increase and further threaten the livelihoods of those who were already struggling. Parents do what they can to send their children to school and sometimes that means the students go to school hungry. In addition, teachers are paid a low salary and when food prices increase teachers are also affected. Therefore, Eat to Think was created to provide breakfast and lunch to students and teachers in need. The mission of Eat to Think is to provide nutritious and culturally relevant meals to students and teachers in economically challenged areas while working with local farmers to improve the local economy. Eat to Think has provided nutritious meals to more than 3,000 students and teachers in two different countries.

      3. The Current Situation

1. Current activities of the organization
2. Organization’s success among target audience
3. Special programs and/or services
4. Facts and figures regarding its operation

Since inception, Eat to Think has provided meal programs to five schools in Haiti and two schools in the Dominican Republic and has partnerships with over 10 farming coops in the local communities of the schools it serves. In the first year of operation, school administrators report that students are more focused in the classroom and are performing better on regional exams.  There are two specific programs that attribute to the success of Eat the Think. The Brain Food Meal Program is the signature program. Through this program, students and teachers are provided with a hot breakfast and lunch. If the school has the ability to prepare the food on-site with an in-house kitchen and cooking staff, then Eat to Think provides all the ingredients for meal preparation. If the school does not have the ability, Eat to Think prepares the food nearby and sends temperature-controlled vehicles to the schools. The second program is the Feed My People Farming Partnership Program. Through this program farmers learn sustainable farming practices to help weather natural disasters. They are provided with tools, seeds, and irrigation systems. In addition, Eat to Think purchases food from these co-ops at the regular price to ensure farmers stay in business and able to continue to provide food for their communities.  With a small staff of five people, Eat to Think is able coordinate with seven schools and ten local farmers to ensure the success of its programs. Two communities in the Jacmel area of Haiti have reported an increase of 30% in their crops and the price of food in those areas has stabilized helping residents to feed their families more adequately. Furthermore, in those same communities, schools have reported an increase of 50% in the students’ scores on regional exams.

    4. The Problem or Need

1. Description of the compelling need
2. Evidence of existence of compelling need
3. Opportunities to address the need

Studies show an increase in IQ levels of children who were once malnourished and who now receive a balanced and nutritious meal. The increase has been seen to be as much 20 points. Malnourished children comprise of more than 55% of the population of students who go to school in developing countries. Teachers and administrators alike have noticed an increase in behavioral problems in some of their students when they continually come to school hungry. Furthermore, they notice these students lack focus and have increased difficulty retaining information. Lack of success in school can lead to discouragement and eventually dropout. In order for developing countries to become more sustainable, they need educated citizens. Immediately following Hurricane Sandy in Haiti, kidnappings increased and the warnings for US citizens traveling there were discouraged by the US/Haiti embassy. Food security in the country was grim and people were desperate. A group of five individuals saw an opportunity to meet a critical need that would have an immediate impact. They brought their education and experience together to form Eat to Think.

5.  The Proposed Solution

1. The organization’s proposed solution
2. Evidence the proposed solution will work
3. Evaluation plan
4. Intended results of the plan

Eat to Think proposes to create meal programs in schools in economically challenged areas where food security is a major issue. Eat to Think is targeting countries where natural disaster or land exploitation are major threats to food security. Over time, Eat to Think wants to create self-sufficient communities. That is why it is working with the farming communities to educate them in farming methods that can withstand harsh weather conditions and providing these farms with the latest in farming technology that the farmers and the communities have the capacity to maintain. Eat to Think is directly impacting the food security issue. But Eat to Think does not stop there, realizing that malnourished children are at a disadvantage for academic success, it created a meal program to feed children and their teachers so that both will improve performance and eventually create healthier and better educated labor force. In the United States, the USDA has reported a connection between nutrition, behavior, and learning.  Their studies show there is a direct correlation between students receiving proper nutrition and their cognition. The World Food Programme, who engages in school feeding programs globally, site that students who receive meals stand a better chance of staying in school. To evaluate the success of the program, Eat to Think works directly with school administrators and receives exam scores from students involved in the meal programs. In addition, attendance records and basic health physical records are obtained for each student to assess their health. It is early in the organization’s history to see dramatic differences. However, in the first year students from the pilot school involved in the meal program were able to achieve and maintain their normal weight according to the World Health Organization’s standards and scored higher on regional exams than in the previous year. The goal is to continue to see healthier and more productive students who stay in school.

6.  Proposed Cost and Sources of Funding

1. Proposed budget for program/project
2. Current sources of funding available
3. Plan for obtaining the difference in funding

Over the course of the next three years, Eat to Think seeks to secure $270,000 per year to support its increased program offerings. Below is the annual project budget: Research including program budget vs operating budget

FY 2012 Eat to Think Operating Budget
	Budget Item	Total Amount	Project Amount
	Income:
	Government	$25,000
	Foundations	$40,000
	Corporations	$20,000
	Fundraising Events	$10,000
	Individual Contributions	$190,000
	Interest	$5,000
	In-Kind Donations	$100,000
	Total Income:	$390,000
	Expenses:
	Administrative Personnel
	Executive Director @ 50% for Programs	$60,000 x.5	$30,000
	Administrative Assistant @ 50% for Programs	$35,000 x.5	$17,500
	Bookkeeper @ 50% for Programs	$35,000 x.5	$17,500
	Total Administrative Personnel:	$130,000 x.5	$65,000
	Program Personnel
	School Partnerships Program Coordinator	$35,000	$35,000
	Farming Partnerships Program Coordinator	$35,000	$35,000
	Total Program Personnel:	$70,000	$70,000
	Fringe Benefits---25%	$50,000	$50,000
	Program Operations
	Brain Food Meal Program (10 schools)	$50,000	$50,000
	Feed My People Farming Partnership Program (20 farms)	$20,000	$20,000
	Total Program Operations:	$70,000	$70,000
	Other Than Personnel Services (OTPS):
	Rent	$24,000
	Utilities	$4,000
	Equipment/Software Purchase	$5,000
	Advertising/Marketing	$3,000
	Fundraising/Special Events	$3,000
	Liability Insurance	$3,000
	Telephone	$1,000
	Printing	$1,000
	Office Supplies	$5,000
	Postage/Delivery	$1,000
	Staff Development/Conferences	$5,000	$5,000
	Travel Expenses	$10,000	$10,000
	Payroll/Bank Charges	$1,000
	Total OTPS:	$66,000	$15,000
	Total Expenses:	$386,000	$270,000
	Surplus (Deficit)	$4,000

Currently, Eat to Think receives most of its funding from individual donors. There are fundraising plans in place to continue to market the organization to more people in order to increase donations as well as to penetrate the existing donor base to increase sponsorship levels. Other sources of funding come from corporate partnerships where corporations provide gifts in-kind donations to help with the Feed My People Farming Partnership Program.

7. The Ask

1. Proposed project/program goal
2. Tax-deductibility of gifts
3. Timing of fundraising project
4. Benefits of a successful fundraising project to the target audience

Eat to Think’s Program goal is $255,000 per year. To expand its programs to 10 more schools and 20 more farming coops in the course of the next three years, Eat to Think is requesting $270,000 per year or $810,000 over the course of the next three years. Eat to Think is a recognized 501(c)3 organization in the United States; therefore, your financial contribution is tax-deductible. With your help, the story of Jean Claude will be duplicated more than 5,000 times. Eat to Think will be able to provide nutritious meals to more than 5,000 students and teachers and improve food security for five more communities over the course of the next three years. Thank you so much for considering Eat to Think as a responsible and effective steward of your financial contribution. Your support is greatly appreciated.