Sunday, September 09, 2012

What's The Trick Nonprofits Successfully Raising Funds, Even In This Economy Use to Create Their Success? Planning. All About The Development Plan That Works...

A Development Plan, Fund Development Plan, or Fundraising Plan is the same thing and enables nonprofits to raise funds in order to ensure cash flow for operations - to fund their missions and programs.  In order to raise funds effectively and operate efficiently (especially in this economy) nonprofits plan out their coming fundraising or development work.  I will refer to this plan, herein, as a development plan.

You and I know that the key to a nonprofit's effectiveness is its ability to successfully deliver its mission goal to the community, through its programs and services, and to achieve positive outcomes based on the current as yet (mission-related) unmet needs of the organization's beneficiaries.  Part of that success, deep in a nonprofit's operations, is a nonprofit's ability to raise funds today and also tomorrow effectively in order to afford the programs, services, and overhead.  As I caution organizations to save, budget, and spend less in this blog, I've written "especially in this economy" or "especially today" a lot since 2007 and the economic downturn, but the fact is a nonprofit (like any business) is never in the clear to spend money unwisely, of course - so the real key to whether a nonprofit succeeds and survives to serve another day isn't just its programs achievements; its leadership's experience, knowledge, and oversight; but too, its ability to operate tomorrow is also based on the organization leaders' ability to be efficient in its budgeting, spending, and savings (today or in any economy).

The number one tool any nonprofit leader has to accomplish true efficiency is planning and that includes planning out the nonprofit's fundraising for the coming year or two (depending on the organization's preference). 

An effective development plan raises the necessary funds to cover all expenses or anticipated necessary cash for the coming year (or two, depending on what amount of time the organization wishes the development plan to cover).  An excellent development plan will plan to raise funds for the time period's anticipated expenses, savings goals, an unforeseen possible financial emergency, etc.  All of this is based on finalized organizational planning and budgeting having already been completed before the development plan (for the coming time period) is begun.  If an organization takes the time to have planned programs, services, and overhead (including staffing, rent, utilities, etc.) and their budgets, this will allow leadership to plan for the most realistic future.  Less money will be spent, less time will be wasted and so the more realistic the information is that the plan is based on, the more efficient the spending, and time taken.

Like any operational planning, development plans come in all different styles, formats, and frankly abilities to serve a nonprofit well or not. Formats, styles, and even implementations may vary, nonprofit to nonprofit, but the effective development plan (no matter differences) contain certain common features.

Effective development plans are born out of real data.  For the time period outlined by the organization (i.e. a one or two year development plan) the best data to inform a successful development plan comes from:
__ Organizational strategic plan,

__ Anticipated programs' and services' plans or designs and budgets,

__ Overhead planning and budgeting (or forecasted organizational operating budgets) including the fundraising plan (or fundraising volunteers', staff, and department's budget),

__ A reasonable sense of the coming regional and national economies (using reputable recent regional and national studies or forecasts),

__ The organization's donors' track record and preferences (look for local donors studies' outcomes such as feasibility studies conducted by similar organizations and analyze your organization's own donors' responses and preferences over the past year),

__ The organization's own fundraisers' skill and knowledge (it's alright to have novice or inexperienced board members but they must be trained and expected to become effective leaders in a relatively quick manner, alongside the rest of the board),

__ The staffing plan, the timeline or schedule (including anticipated benchmarks and expected accomplishments by each),

__ And the 'on the ground' logistics (locations as pertinent).

A lot of this may sound like rushing out to the local library's Reference Desk for recent studies, or sticking one's finger up in the wind to take a temperature and it is a bit of both but a development plan that really works well is more.

The more quantifiable defensible data that goes into a development plan and the process of creating the plan the better the plan will be.  What do I mean with such mathematical gibberish?  I mean - you either inform your organization's plan to raise funds successfully for tomorrow, the next month, and during the course of the next year with garbage or factual information, likely patterns, and pretty damn on-point educated guesses.  One gets your organization there successfully and without unnecessary expense and the other might result in a stapled pile of papers or a *.doc file but will be worthless and frankly, a waste of your volunteers' or staff's time.  We know that no one is a swami or able to see the future.   No nonprofit's leadership is.  But some nonprofits - many nonprofits - are pretty damn good at raising funds, even in this tight and harsh economy.  How do they do it?  Through planning but too, in using realistic and real information to inform their organization future operations, like fundraising among others.

Each nonprofit is its own unique 'being' with its own unique donors, clients, and communities.  So, some of the best sources of quantifiable data (whatever is being claimed in the data can actually be measured by another party should they wish to check your organization's claims or the data you're using to assert that claim) and defensible data (the data being used is based on real need or your nonprofit's clients actual demographics and service statistics which will demonstrate the actual need in the community that your organization is providing a solution for) is at your organization's fingertips. It goes without saying that the more current or recent the data sets, the better.

Evaluation methods built in to each of your organization's programs and services are not only excellent tools to help raise more funds and retain donors - evaluation methods' tabulated responses happen to also be excellent sets of data for a nonprofit's strategic planning, for example, but too - its development plan!  Right there you have information not about some people in your organization's region or some subset of the local community but rather YOUR ORGANIZATION'S own beneficiaries - its clients and their specific demographics, needs, and experiences.

Similarly, donor/donations analysis is actual real data about your organization's lifeblood - its support, its donors.

Your nearby public library, some government agencies (from federal to state, local, and even nearby Tribal governments) and certainly other nonprofits often provide recent studies' findings (and sometimes even their raw data sets) for free.  Always be sure to keep relevant and also succinct when reporting or selecting data to use.  These agencies may providing any of the following pertinent information: economic forecasts, the donor climate, communities' needs, communities' demographics, regional politics, trends, population growth, etc.

The development plan should also include the following information after the pertinent data is used to inform the plan:

The timeline should be clearly defined and then throughout the plan, it should be accounted for entirely.

Build a process for the development plan to be carried out through.  This may include: regular meetings, reports, follow up meetings at the end of major benchmarks, trainings, and even the utilization of online cloud solutions such as Google, Wikis, allow for trainings, meetings, communication, documentation, etc. as deemed necessary.

Identify viable fundraising methods including those conducted annually and new ones.  Make a plan for each (staff, necessary infrastructure or software, printing, event planning, intended participants, how it will be funded, etc.).  If your organization conducts special events, then create a unique individual plan for each special event, too.  State the amount anticipated to be raised by each method, into each fundraising method's plan.  Plan outreach, solicitation, networking, marketing, ongoing donor relations, donor retention, and public relations into each fundraising method's plan.  Create a budget for each. Build an evaluation method and process into each.  New fundraising methods should include a long term plan as it often takes them three to five years of consecutively being held before one breaks even or turns a profit.  Research any new fundraising methods to be sure your organization understands what they typically cost, who typically attends them, what they raise from the first year through the time they begin to break even or raise more funds than they cost and when that is, etc.

Plan out, for each fundraising method, who will be targeted as potential donors (current and new).  It is not necessary, for instance, that you have a complete list of all of the foundations your organization will approach for its fundraising for next year (your grant writer will do that and the more current the prospecting for a grant donor is the more likely your organization's chances of success).  It is effective to list, though, how donors will be targeted or identified for each specific unique fundraising method.  For example: Grant Writing - traditional best practices prospecting; Major Donors - individual donor analysis and research; Special Events - continuing X, Y, and Z annual events and adding Q, and R new events raising funds from: corporate sponsors, participants' registration fees, and get the venue and meals donated and/or sponsored.  Whatever the targeted donors are - they must be realistic and actually viable contributors.  In other words - don't list potential donors that you hope or think will contribute.  If necessary, conduct your own feasibility studies to determine what the current economy and thinking will actually produce for a newly implemented fundraising method.  Knowledge based in facts is the best insurance for the organization's future.

All staff and teams or committees should be clear about what their specific tasks and responsibilities are, what their timeline and benchmarks are, and what resources are available to them.  Everyone should understand who they report to, what they need to report, how they report to them, and how often they report.  They should be supported and enabled rather than micromanaged.  Trust talented, expert, successful volunteers and staff.  Allow people to be successful by delegating responsibilities to them, educating, and trusting them, and providing them with what they need in order to be successful.

As with all other organizational programs, the development plan should have an evaluation method built into it to assess what is working, what is going well, and what needs improvement based (yes... you guessed it) on real actual outcomes (i.e. donations analysis, various methods' success rates and response rates, donors' feedback such as anonymous donor surveys, major donors' suggestions or comments, etc.). Remember, always, that identifying proactively where improvements are needed is your organization's responsibility, is cheaper, is better off discovered by your own organization than by the press or public (for your organization's reputation), is less expensive in the long run, and an opportunity.  Finding where improvements are needed should not result in a punishment or fuming.  Rather, it should be expected.  Anticipate that at a minimum, things change and your organization will need to adapt.  But too, people make mistakes and that's just how it is.  That's not to be faulted but rather anticipated and keeping a proactive eye out for them is cost effective.  Expect them and allow the organization to be nimble enough to make improvements.  There is no organization that operates perfectly.  What the lessons that have been that have been recently learned is actually something that forward thinking grant donors, for instance, often ask for at the end of grants from grant recipients, not to condemn or berate them (!) but to learn lessons themselves (for future grant recipients' benefit) but too, to ascertain how well the grant recipient monitors its own programs and evaluations and what it does about what it finds (such as where improvements are needed).  They ascertain which grant recipients operate their organizations such that they would want to give to that nonprofit again.

Finally, build into the development plan where and how any of the planned fundraising methods, anticipated amounts raised for each, and anticipated expenses.  In other words, if some fundraisers are actual formal events - these require in their event planning renting perhaps a restaurant, a ballroom, or a specific venue.  That will require booking it, etc.  Too, obviously, it will involve either having the location's rental cost donated to your organization, paid for by one of the event's sponsors, or your organization paying for the location.  I am using the venue as an example here to discuss event planning, and venues are only one small part of event planning.  But, it demonstrates my point.

To learn more about what a development plan is, how to create an effective one, or to answer any questions you may have I strongly recommend:

The Foundation Center's free, interactive, online training Introduction to Fundraising Planning course (which allows you to go at your own pace)

6 Steps To A Fundraising Plan For A New Nonprofit by Joanne Fritz, PhD Guide to Nonprofit Charitable Orgs

Nonprofit Quarterly's What Should Your Fund Development Plan Include?

My Amazon Store (in the middle right hand side of this blog) lists books considered standards in the profession, and have been hand selected by me, as such.  If you locate a book that looks helpful but can't afford it, note its title and author and see if your local public library has it.  If it doesn't, ask a librarian for it through either the library's purchasing program or its inter-library loan program.

And as always, please feel free to comment on this post with questions or suggestions that I have missed herein.

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