A topic on many nonprofit Executive Director’s minds these days is how to find more money. With foundation and individual donors poised to decrease their giving, governments strapped for cash, and corporate earnings, and thus their philanthropic giving programs, falling, it is difficult to figure out how to make fundraising programs already in place continue to meet their goals.
But there is a solution. Strategic fundraising, or comprehensive revenue-generating activities that are based in strategy, can find dramatic results, even in a tough economy.
Strategic fundraising always starts with a plan. In order to raise more money, you need a game plan to get there. Many nonprofit organizations don’t have a comprehensive fundraising plan that details exactly what the goals are and how and when they will be met. A fundraising plan should have 3 to 5 broad goals. For example:
- Raise $XX from philanthropic sources
- Raise $XX from earned-income or fee for service sources
- Create or refine the infrastructure (technology, staffing, marketing, etc.) to meet these goals
With your goals determined you can then delineate the various deliverables, people responsible and timeline that will get you to each goal. Such a plan drives your strategy for the entire year and tells you where to allocate resources most effectively.
Speaking of resources, strategic fundraising also necessitates that you look at each fundraising activity and determine its return on investment. What does it cost to put on your annual fundraising gala? Not only the direct costs (food, decorations, etc.) but also the financial value of the staff time that goes into it. When you factor all costs in, how much do you really raise? Are there better ways to spend staff time that could raise more money? For example, a major gifts campaign has the highest return on investment of any philanthropic fundraising activity.
You also want to look at your entire revenue picture and the sources of each piece. If you are heavily dependent on one or two revenue sources (government funding, foundation grants) you could be hit harder when that source changes. Diversifying your revenue strategically, for example launching an annual fund campaign to increase individual investments, looking at corporate sponsorship opportunities, getting your board of directors to invest time and money in fundraising, can strengthen your organization and cushion you from difficult periods.
And as you diversify revenue you want to look beyond typical philanthropic sources. Earned revenue, fee-for-service, social enterprise, are all different names for the same thing: selling a product or service to generate unrestricted income. Nonprofits have found success in generating revenue by selling something. Museums (entrance fees) and schools (tuition) have been doing this for a long time, but other nonprofits are moving into the arena as well. Job training nonprofits use their workforce to staff a restaurant, bakery, ice cream store. Public broadcasting stations sell their television and radio programs on CDs and DVDs. The list goes on. Nonprofits have assets that they can turn into saleable products or services. And the unrestricted revenue that successful earned income businesses generate can get them further along the path to financial sustainability.
There is an answer to a down economy. It means thinking strategically, exploring new opportunities and being open to change.