Peter Drucker is famous for saying: “Management is doing things right; leadership is doing the right things,” in his book - The Essential Drucker. While I agree with that, I also believe that success in fundraising is doing the right things, the right way, consistently. There really are best practices, that when applied, will result in improved financial outcomes for your organization. In this blog I’m going to pick out just a few that we should employ as a part of our game plan.
OK, you have all the right players in place, based on your organization’s size and budget - see previous blog: How to Improve Fundraising for a Nonprofit Organization – Part 1: The Players. The next step is to ensure we have the right plan in place – and that we’re following it.
Get a Good Handle on Your Fundraising Data
The first step is to get a good handle on your donors and how they support your organization from a fundraising standpoint. And that begins with good Data. A flaw I often run into in this area is the lack of comprehensive data entry procedures.
When you have multiple individuals entering donor information into your database, from multiple sources, the lack of strict guidelines can create all kinds of errors:
- multiple mailings to the same individual or family
- inaccurate wealth screening outcomes
- multiple instances of the same donor in your database
- unlinked spouses
- missing data points
Before you enter one more name, stop and script out a highly detailed set of instructions. Then make sure everyone who might enter data into your database has a copy. As a failsafe, periodically export your donor list into a spreadsheet and sort the data by the fields where mistakes are most often made. Errors can usually be spotted easily.
Run Critical Fundraising Reports
Secondly, now that we have a clean, and accurate donor database, we can begin to run some critical fundraising reports.
One of the most important reports is a monthly giving report. This monthly report should be broken down by each funding category and compare current income to the previous year. This is not only a critical report for the development team, but also executive leadership. As an offshoot of the monthly giving report, I’d recommend that you have a separate report for direct mail, by donor segment. And for this report I’d want to see every month for the last 2 years, so I can be alerted of any changing trends.
Another valuable report is a Year-to-Year Giving Report that lists the donor, their giving amount last year, their giving this year, and the number of touches or cultivation activities with that donor. The results from this report should show that cultivation is increasing the number and amount of gifts - or at least that it’s impacting retention. There are reports necessary to development, executive leadership and the board. If you haven’t done it recently, plan a meeting with each area now and then generate the reporting that enables each department to make the wisest decisions possible.
Run a Complete ROI Analysis of Donors
Your next step is to run a complete ROI Analysis. You should know the ROI for each of your different development efforts. You can’t afford to waste time and valuable resources on marketing, or fundraising that is ineffective, or worse, losing money. And don’t forget to count the real cost of any fundraising activity you do. And that includes all staff hours worked, and the time put in by volunteers. I can’t tell you how many times I’ve walked through all the hidden costs of an event, only to find that the ministry didn’t really make $20,000, they lost $10,000. Use an accurate and inclusive formula, and if you can’t make it an automatic function, then apply it at least quarterly.
Find the Gap Between Operating Budget and Funding Goal
You’re almost ready to nail down your game plan, but first we need to know the gap between your operating budget and your total funding goal – by month and by year. I like budgets, and I like goals - they help me to keep my focus on the important things. But goals must be realistic and based on good data. Schedule a meeting with your executive director, development director, chief financial officer and your accountant – and bring a copy of each of your funding reports.
During this meeting make sure that each person agrees that all your numbers are accurate. Then discuss how both expenses and income fluctuate from month to month – and why. Make a list of possible internal and external events and occurrences that might impact those numbers either positively or negatively. We’re not planning yet, we’re just getting a good handle on reality. This is also not budgeting, this is creating a list of “what ifs”. Some of them you can control, some you can’t. Note: this collaborative work will then design your monthly dashboard. Everyone is on the same page on the ups and downs of income and operating expenses per month.
Create Your Fundraising Game Plan
OK, we’re ready for the final step. We have our donor information, we know the actual cash flow that our various fundraising and marketing efforts can really generate, and we have a good handle on how much we need to generate and the factors that might impact our ministry.
Now we’re ready to walk through a realistic game plan to get there. Always begin any plan with the same bedrock foundation: your organization’s Mission, Vision, and Values statements. These are the guideposts that every decision must be held up against.
Next, begin writing out the individual goals, by department/area. List out every missing element that you would need to accomplish each goal (this could be personnel, materials, space, etc.). Make a list of the tasks and activities that would need to be done in order to accomplish that goal. Research, or estimate the total cost to complete the goal. Discuss who on the team can best do what needs to be done. (That person may not be the one currently tasked with that job/function).
Then, estimate a reasonable timeline to start, do, and complete that goal. You now have a list of specific goals you want to accomplish; existing and missing resources you have or need; a list of existing or missing personnel (which may need to be trained, moved or hired); What funding you would need, and where the needed funding could potentially come from. Begin using this very basic outline to craft your own game plan.
I don’t want to make the process of strategizing your fundraising game plan to sound easy, it’s not – it requires a lot of careful research, planning and decision making. Let’s be honest, I’m a consultant, but I don’t just believe in the value in bringing in outside professionals to provide added experience and depth of expertise because that’s how I make my living.
I was successful in my careers before becoming a consultant partly because I routinely hired coaches and consultants who could bring wisdom and experience to the issues I was dealing with that I just didn’t have at the time. You may be able to craft your organization’s game plan on your own, but at least check out who might be able to provide you with the expertise to do it right. (I’d love to talk with you about a crafting a game plan for your organization – you can schedule a free coaching call here >>)
In my next blog we’ll look at what it takes to successfully execute a successful fundraising plan.