Developing a Fundraising Strategy That Works | 6 Steps

Many nonprofits earn a significant portion of their revenue through individual donors. True, grants and government funds are also essential, and many organizations rely on them as a primary source of funding. However, how you engage with individual donors is the initiative you have the most control over, allowing you to most effectively pilot your organization’s growth and development. Your fundraising plan should reflect that.

Therefore, if your nonprofit is striving toward growth, you’ll need to be sure your fundraising plan is designed to expand your donor base, retain current support, and raise additional funds. 

In this guide, we’ll walk through the essential steps to develop a sound fundraising strategy, including: 

1. Define your goals. 
2. Determine your audience. 
3. Choose your campaigns. 
4. Write a case for support. 
5. Develop a marketing plan.  
6. Steward your supporters. 

After you’ve developed a fundraising plan, you’ll be able to better reach your audience with a targeted message, encouraging them to continue contributing to any and all campaigns. Plus, you might expand other opportunities like your volunteer program. 

1. Define your goals. 

The first step to creating an effective fundraising plan is to set your goals. If you don’t have goals, you won’t have a direction to head in or metrics to review to measure your success, which would inform your next steps. 

The goals you set for your development strategy should tie directly into what you want to accomplish in your strategic plan. For example, if part of your strategic plan involves your nonprofit developing a new program, you need to have the fundraising capacity and built-in plans to fund this new project. 

When you set goals, write them using specific, finite phrases. For example, if you set a goal to “Raise more donations next year,” there’s no real finality to the idea of more donations. You could raise one more donation from the previous year or see an increase of $10,000 over the previous year’s revenue and still have technically achieved your goal.

Instead, set finite and measurable goals so you know precisely when you reach and hopefully exceed them. For example, rather than the previous goal, you might set one that says, “Raise $50,000 more in individual donations by the year’s end than what was raised in the previous year.” This is specific, measurable, and time-based, making it a well-defined goal for an organization. 

Setting concrete goals like this not only encourages you to raise additional funds, but it encourages your team to push themselves and develop new strategies to work toward these goals moving forward. They form the basis of a true fund development strategy. 

2. Determine your audience. 

Too many nonprofits tend to think about fundraising as simply pulling money out of an ATM, forgetting that there’s another person on the other side of the equation. Determining and understanding your audience is the next essential step to developing an effective fundraising strategy. 

Your nonprofit likely has a wide range of people you contact to raise funds on a regular basis. Maybe your volunteer base is primarily college students while donors range from middle-aged women to elderly men. No matter what your supporter base looks like, you can define a specific number of audience personas; these are the types of people who tend to give to your organization. This generalizes your audience and provides an overview of who gives to your mission. 

Consider audience demographics and markers such as the following when defining your personas: 

• Gender
• Age
• Location (where they live)
• Profession
• Interests
• Motivations

For example, one of your audience personas might be: 

Retired elderly men in Vermont who are interested in supporting your educational initiatives for the next generation. 

Of course, this won’t describe every elderly man in Vermont or every person who supports your educational initiative. However, it does give you some insight into the types of people who support your cause. 

After you’ve developed your personas, you can use the past engagement supporters have had with your nonprofit to create segments in your donor database. 

For example, you may create segments for your: 

• First-time donors
• Major supporters
• Mid-tier supporters
• Volunteers who have not yet donated
• Volunteers who have donated
• Lapsed supporters
• LYBUNTs (people who gave last year but unfortunately not this year)
• SYBUNTs (people who gave some year but unfortunately not this year)

These segments will help you determine the language and style that will best appeal to each of your nonprofit’s supporters as you ask for their help. When discussing how to leverage this resource, Bloomerang’s donor segmentation guide explains that nonprofits like yours should “consider the segments you’ve made in your donor database and create rough templates that work for various types of audiences.” Then, you can customize and configure the templates according to each supporter and campaign. 

For example, if you send a message to your volunteers, you might consider the fact that they’re primarily college students and write a message specifically tailored to them. However, if you’re writing a message specifically for your mid-tier supporters, you may recognize them to be middle-aged women, requiring that you use a different tone and message than you would when appealing to college students. 

This information also becomes helpful when it’s time to choose your campaign ideas and craft your case for support. 

3. Choose your campaigns. 

There are thousands of nonprofit fundraising ideas available to your organization. The ones that will work best for your nonprofit are the ones that are chosen with your audience in mind. They should be engaging for your particular supporter personas and segments.

Keeping in mind what you know about your supporters and what you’ve learned about determining your audience and consider how your audience would respond to the following potential fundraising campaign ideas from CallHub’s online fundraising ideas list:

• Online auctions. Auctions are a classic addition to any in-person gala fundraiser. However, they can also be conducted more frequently and less formally when you have an online platform to host the opportunities. 
• Peer-to-peer fundraising. Peer-to-peer fundraising (sometimes shortened to P2P fundraising) allows your nonprofit to recruit supporters to raise money on behalf of your organization. These campaigns are often used leading up to events, but they can also be leveraged as independent initiatives. 
• Virtual run/walk. 5Ks and walk-a-thons are classic examples of the events that your organization can host to raise money and engage supporters. They also have fairly low overhead expenses. If you’re wary about offering in-person activities like this, host your next race virtually instead. 
• Ecommerce. Often, nonprofits sell items like branded t-shirts, hats, and mugs to make a little additional income. You can either sell these items at an event or through an online ecommerce site. Get creative! You can also sell digital assets like sponsorship packages for events, allowing your event sponsors some additional marketing resources through co-branded advertisements. 

Of course, these ideas are all online fundraising options, but you can adapt your ideas to in-person events as well. This tends to be most important for communicating a case of support and garnering contributions for larger initiatives such as capital and capacity-building campaigns. 

Choose the campaigns you want to leverage throughout the coming year as a part of your fundraising strategy. Then, develop the promotional resources you’ll need and start planning for each campaign. 

4. Write a case for support. 

While many of your campaigns like hosting 5Ks and selling merchandise encourage smaller donations, much of your fundraising revenue will come from major donations and larger campaigns like capital or capacity-building campaigns. 

To attain this support, you’ll need to communicate the importance of your mission and your campaign to your prospects to show them why their donation is so crucial. Your case for support is the document that makes this happen. 

According to Capital Campaign Toolkit’s guide, your case for support is “a clear and compelling set of ideas that literally makes the case for why donors should give to your campaign.”

In this important document, be sure to include the following elements:

• The title of the campaign. This sets the tone for what your campaign will achieve. 
• The challenge you’re facing (why your nonprofit exists). This defines the problem the campaign will attempt to resolve. 
• The solution itself. State the program or activities your campaign will fund to solve the problem. 
• The reason they should donate to your organization rather than another organization with a similar mission. When you proactively address these potential roadblocks, you do the work for the potential donors. 
• The urgency for the campaign. Explain why they should contribute now. 
• The amount you want to raise. Share what total donation amount is necessary to fund the solution and your plan to raise those funds. 
• The importance of the campaign. This once again reinforces why it matters and should be a top priority. 
• How the donor can help you achieve your goals. Explain how—making a donation, sharing the campaign on social media, etc.—they can take concrete actions to help you achieve your goals.

Write a case for support to explain the importance of your major campaigns to prospective supporters. Determine what major contributions you’ll need to fund your development strategy and preemptively start creating this important document. This will enable you to enter these conversations with confidence and specificity. 

5. Develop a marketing plan.

No matter if you’re reaching out to major supporters or to your average donor, you’ll need to develop an effective marketing plan to attract their attention, inform them about upcoming campaigns, and raise donations. 

Develop marketing plans for each of your campaigns, determining your goals for each one, the platforms on which you’ll reach out to supporters, and how you’ll attract each segment of donors. 

For example, you might determine that you’ll need to use email, Facebook, text messages, and your website to spread the word about your 5K race. After determining these channels, break down the types of messages you’ll send according to segments and personas in your audience. 

6. Steward your supporters. 

Raising money is only half of the equation when it comes to securing a donation. The other half is encouraging your supporters to give again and again in the future. This boosts your retention rate and helps you raise more money over time. 

After all, as philanthropic expert and academic Adrian Sargeant claims,

“It typically costs around five times as much to solicit a new customer as it does to do business with an existing one.”

That means you’ll save money by retaining your supporters over the long haul while also raising additional revenue because you’re not trying to constantly replenish your donor base. It allows your organization to grow and make a bigger impact. 

This is why you should also get a jump start on your stewardship plans and incorporate them as a part of your nonprofit’s fundraising strategy. 

Little tokens of appreciation can make a big difference in showing your supporters that you care. Plan to show gratitude and develop relationships with supporters by: 

• Calling them to thank them for their latest contribution
• Sending thank you emails and letters
• Sending branded merchandise like t-shirts, stickers, and more
• Giving tours of your facilities and work sites
• Sending your most recent newsletters to supporters
• Asking questions and requesting feedback in a survey

Get a jump-start on developing your stewardship plan as you’re creating a fundraising strategy. This way, you can show your appreciation for donations in a timely manner and begin building strong, long-lasting relationships sooner. 

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Fundraising is essential to fostering growth for your nonprofit. It provides the fastest path to expansion and additional funding. Therefore, as the new year approaches, start thinking about your organization’s next fundraising plan and strategizing the ways that you’ll better reach your supporters, make your case for support, ask for donations, and follow up after each campaign. Happy fundraising! 

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Author: Jay Love