The Dos and Don’ts of Building a Fundraising Strategy
A fundraising strategy is a blueprint for nonprofits to grow their audiences, expand their funding, and work more effectively toward their missions. It outlines the specific actions your organization will take to conduct activities such as outreach, gift collection, and donor stewardship.
You might create a fundraising strategy to complete a specific, major initiative, such as a capital campaign. You may also craft a more general strategy for the upcoming year. Either way, your organization will need an effective roadmap to stay on task and complete goals efficiently.
If your organization is new or growing, you’re probably looking for ways to build your fundraising strategy sustainably so that you can scale up your efforts as you grow. We’ve put together this guide to review fundraising do’s and don’ts to help provide parameters as you expand your efforts:
- Take a strategic approach to prospect research.
- Build genuine relationships based on trust.
- Plan your campaigns and initiatives well in advance.
- Track your progress.
- Expect your audience to know everything about your organization.
- Neglect the importance of corporate giving.
- Use outdated or ineffective tech and processes.
- Be afraid to reach out for help.
If you’re looking for a step-by-step guide to help build your fundraising strategy from the ground up, check out Donorly’s fundraising plan template. This resource will help you build a strategy that suits your organization’s needs. As you prepare your fundraising strategy, use the tips in this guide to ensure you’re creating a well-rounded, optimized game plan. Let’s dive in!
Take a strategic approach to prospect research.
To achieve a higher engagement rate for your fundraising initiatives, direct your fundraising efforts toward a group of individuals who are excited and willing to give to your cause. You can discover this ideal audience using prospect research.
Prospect research is the process of identifying potential major donors based on a variety of wealth and warmth indicators.
Wealth indicators, such as real estate holdings, stock ownership, and a higher-up job title, indicate that a prospect has the capacity to contribute a larger donation. Warmth indicators, such as a past relationship with your organization or similar nonprofits, indicate that a prospect has a personal connection and affinity for your cause or organization.
Depending on the size of your organization, you may choose to perform in-house prospect research or reach out to a prospect research consultant for assistance.
If you choose to conduct in-house research, you can use a variety of accessible resources such as your organization’s CRM, nonprofit databases like GuideStar, and federal records of stock transactions or political contributions. If you choose to hire a consultant, these professionals will lead the charge in conducting targeted research and driving your strategy forward.
No matter how you choose to pursue prospect research, ensure your investigation doesn’t go to waste by adopting proper data hygiene procedures and reaching out to your prospects with a timely, relevant communication strategy.
Build genuine relationships based on trust.
Even if your fundraising strategy is for a single campaign or initiative, you should always be thinking of ways to build and sustain long-term relationships with your audience members. You can gain stronger, long-lasting support with a balanced, comprehensive communication approach.
Make sure your fundraising strategy includes a communication plan with these elements:
- Craft a communication cadence that keeps supporters informed without overwhelming them. You should reach out to supporters on various platforms so that you avoid overwhelming them on just one platform. Don’t flood their inboxes with daily messages, but send enough appeals so that your organization stays on their radar.
- Let supporters know the impact of their support. Your donors, volunteers, and advocates want and deserve to know how their actions help further your organization’s mission. Provide specific updates on the progress of your campaigns and projects to demonstrate the impact of their support and encourage them to stay involved.
- Provide a wide variety of ways to get involved. Don’t just reach out to donors with donation opportunities or volunteers with volunteer opportunities. Offer all supporters multiple ways to get involved. This helps strengthen ties with your supporters and maintain their interest in your organization’s activities.
These communication strategies can help your organization improve its supporter retention rates. When supporters see that your organization has taken the time to form meaningful, personal connections with them, they’ll be more likely to continue their support over the long term.
Plan your campaigns and initiatives well in advance.
The best time to start planning your fundraising initiatives is always as soon as possible. Whether you’re planning a Giving Day event, peer-to-peer fundraising push, or annual gala, you’ll want to give your team as much prep time as possible. This ensures every aspect of your initiative is optimized to drive more fundraising.
Ensure your fundraising plans include concrete timelines for when you must complete each task associated with your goals. Create a shared calendar for your team that lists these benchmarks and includes the name of each person or team who’s in charge of each task.
This instills accountability throughout the fundraising process and allows you to stay on target to complete your goals on time.
Track your progress.
As you carry out each aspect of your fundraising strategy, you’ll need a way to measure your progress. Otherwise, it becomes challenging to assess your successes and failures and figure out the best way to move forward.
DonorSearch recommends tracking a variety of fundraising metrics, including:
- General nonprofit fundraising metrics such as cost per dollar raised (CPDR), fundraising return on investment (ROI), and gifts secured.
- Donor metrics such as donor retention rate, donor lifetime value, and donor acquisition cost.
- Online engagement metrics such as online gift percentage, email click-through rate, and landing page conversion rate.
Tracking your progress using metrics ensures that when it comes time to build a new fundraising strategy or start a new campaign, you’ll be able to incorporate what you learned from your previous efforts. You’ll be able to achieve a higher ROI by investing more heavily into what works and avoiding any unnecessary or unhelpful ideas.
Don’t expect your audience to know everything about your organization.
Don’t assume that your audience is completely familiar with every aspect of your organization and its mission. No matter if you’re marketing to a wider range of prospective supporters or your local audience, each group requires its own careful marketing approach.
Infuse a strong marketing strategy into each aspect of your fundraising plan with the following tips:
- Take a multichannel approach to marketing. Share updates, organizational history, donor shout-outs, and more using a variety of marketing channels. This includes email, social media, your website, and direct mail. This ensures that you’re reaching a wide pool of current and potential supporters, no matter their preferred communication platform.
- Segment your supporters to send relevant messages to each group. Segmentation is the process of grouping supporters based on shared characteristics. For instance, you might create segments of new donors, long-time donors, major donors, and volunteers. Then, you can send each group messages that are tailored to their engagement type and level of involvement with your cause.
A strategic marketing approach allows you to connect your audience members with the resources and information they need to learn more about your nonprofit and get involved. This also establishes a foundation on which your supporters can receive personalized fundraising requests that feel more community-based than transactional.
Don’t neglect the importance of corporate giving.
According to this nonprofit fundraising statistics page, an estimated $4-10 billion goes unclaimed in matching gifts every year. However, over 18 million individuals work for companies that offer matching gift programs.
This represents a major untapped fundraising source for nonprofits like yours. As you move through the steps of your fundraising strategy, don’t underestimate the impact that your corporate partners and match-eligible donors can have on your organization.
You can increase awareness of these programs using your marketing efforts. Let prospective donors know about the impact that matching gifts can have on your organization’s fundraising efforts.
Be sure to also carry out targeted stewardship efforts to acquire and retain the support of corporate sponsors throughout your various fundraising initiatives. Plenty of corporations are interested in pursuing social responsibility programs and enhancing their positive community impact. Use this sentiment to your advantage by developing and maintaining relationships with corporate donors.
Don’t use outdated or ineffective tech and processes.
Fundraising best practices continuously evolve. It’s important to stay ahead of the curve to incorporate new strategies and tools into your organization’s toolbox.
For instance, keep an eye out for evolving trends and best practices regarding:
- Software tools: Nonprofit technology solutions are constantly advancing, from CRM databases to matching gift tools and prospect research processes.
- Supporter communications: As communication platforms evolve, so do communication best practices. From social media trends to email data analytics tools, pay attention to how nonprofits are successfully staying connected to their supporters.
- Fundraising events: The COVID-19 pandemic caused most fundraising to move into the virtual realm. Even with in-person events becoming an option again, be mindful of the various options your organization has for events in your area. This might include online, in-person, or hybrid events.
Adjusting to fundraising best practices allows your organization to benefit from the best advice, strategies, and tools available. It also shows your supporters that your organization is thriving, flexible, and willing to take into account shifting preferences.
Don’t be afraid to reach out for help.
Your organization doesn’t have to tackle developing a new fundraising strategy all on its own. If you hit any roadblocks or feel like you need a helping hand along the way, a fundraising consultant can provide the experience and knowledge you need to right the course.
These consultants typically offer the following fundraising strategy services:
- Campaign strategy development
- Wealth screening
- Prospect research
- Fundraising best-practices training
- Ongoing campaign support and guidance
If your organization doesn’t have the time or in-house expertise needed to develop an effective fundraising strategy, a consultant might be the right partner to help push your efforts forward. Before hiring a consultant, be sure to vet them thoroughly to ensure they’ll mesh with your organization’s culture and priorities.
Adapt each of these fundraising dos and don’ts to your organization’s unique needs and goals. This way, you’ll be able to assess the success of each initiative using campaign or donor data. If something’s not working for you, don’t be afraid to try new strategies (remember that your fundraising plan should be flexible). Happy fundraising!