A smart move
October 2008
Adrian Sargeant applies some strategic principles to fundraising planning...
A fundraising plan has three key dimensions at its core:
- Where are we now? A complete review of the organisation’s fundraising environment and the past performance of the fundraising function.
- Where do we want to be? The fundraising objectives that must be achieved over the duration of the plan.
- How are we going to get there? The strategy and tactics the organisation will adopt to achieve its objectives. The strategy specifies in general terms what the broad approach to fundraising will be, while the tactics supply the minutiae of exactly how each form of fundraising will be undertaken.
A simple fundraising planning process is illustrated in Figure 1. Many organisations find it helpful to begin by restating their vision, mission and organisational objectives. This helps to focus on the issues which are considered to be of paramount importance for the organisation as a whole. A non-profit vision is typically an expression of the kind of society the organisation would like to see, and a mission defines the role that the organisation will play in making that vision a reality.
The fundraising audit
A restatement of these components is followed by a fundraising audit or detailed review of any factors likely to impinge on the organisation, taking into account both those generated internally and those emanating from the external environment. The fundraising audit is thus a systematic attempt to gather as much information as possible that will help develop both appropriate objectives and the strategies/tactics to achieve them.
It is usual to begin the process by examining the wider or ‘macro’ environmental influences that might impact on an organisation. Often these may be factors over which the organisation itself has little control, but which will nevertheless affect the it at some stage during the period of the plan. This is typically referred to as a PEST analysis and the framework comprises the following elements:
- political (e.g. planned changes in legislation or regulation);
- economic (trends in the economy that will impinge on giving);
- socio-cultural (demographic or attitudinal changes taking place that will impact the ability to raise funds); and
- technological (new technologies or developments that have a bearing on fundraising).
In each case the aim is to note all the pertinent factors and indicate how these are expected to change over the planning period. For a small non-profit, this will probably be quite a short list, but the exercise is still a useful aid to planning. A similar analysis of ‘competitors’ (see Ian Williams and Tony Ellischer Viewpoint article on competition) should be done with a view to what can be learned from them. These organisations are typically grouped as follows:
- Those in your own causal area.
- Those of a similar size and same level of resource and experience.
- Those who happen to be doing something really creative and interesting – for example they might have won a sector award.
In each case the goal is to analyse their strategy/tactics and if possible their performance to determine whether you can learn anything from their activities.
Equally, some organisations can find it helpful to collaborate with others to raise funds. As part of the audit it is important that these opportunities be explored and delineated. Finally, in the external component of the audit it is necessary to conduct a review of each of the donor markets the non-profit wishes to address (e.g. major gift, medium and low-value individual giving, corporate giving, trust/foundation giving). The organisation should look at the current trends and issues in each market and anticipate needs and interests of each target audience. The goal is to build up a picture of the likely future behavior of each group and the factors that will shape this.
Fundraising portfolio analysis
Once the external environment has been assessed the next stage is to review the internal fundraising activity. The aim here is to scrutinise past fundraising performance and to assess what has worked well in the past and what has not. Current fundraising activities, trends in performance, and the current structure and support systems that underpin fundraising activity should be considered along with the overall health of the organisation’s fundraising portfolio.
See figure 3 for an example of the many models and frameworks available for portfolio reviews. With this one, the goal is to position each fundraising activity somewhere in the matrix. If we consider first the question of external attractiveness, this relates to how attractive an activity might be to the target audience. Is it something that many people or organisations will want to engage with? The extent to which this is true determines the position on this axis. Turning now to the question of internal appropriateness, this relates to the extent to which the form of fundraising ‘fits’ the profile of the organisation providing it. In other words, is it appropriate for the organisation to be engaged in each form of fundraising given the skills, expertise and past performance it has been able to achieve? Again, each activity can be placed on the relevant axis and then positioned in the matrix.
As a final step you may wish to draw a circle around each activity, the diameter of which is proportional to the revenue (gross or net) that the activity is able to generate. Activities falling in the top left-hand corner of the matrix are clearly those that are worthy of continuing investment. The organisation is well placed to continue a form of fundraising appealing to the target audience. Activities falling in the bottom right-hand corner, however, are activities which could be causing an unnecessary drain on resources and should be questioned. The organisation is not particularly good at forms of fundraising that are clearly unattractive to the target audience. These can be divested. Any activities falling in the central diagonal should be subject to further scrutiny before forming a final view.
SWOT analysis
At this stage the output from the fundraising audit may be regarded as little more than a collection of data, and in this format it is of limited value for planning purposes. For this reason, it is usual to conduct a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis on the data gathered during the audit. By definition opportunities and threats are external and thus draw on the ‘external’ components of the audit. Strengths and weaknesses are internal and thus draw on the final component of the audit. The SWOT should then provide the planner with a detailed idea of ‘where the organisations stands now’.
From here the planners can proceed to derive their fundraising objectives which should be:
- Specific. Objectives should be related to one particular aspect of fundraising activity – those which relate simultaneously to diverse aspects of fundraising activity are difficult to assess since they may require different techniques of measurement and a perspective across different planning horizons. Attempting to combine activities might therefore lead to confusion, or at best a lack of focus.
- Measurable. Adjectives such as ‘maximise’ or ‘increase’ are not particularly helpful when it later becomes necessary to assess the effectiveness of fundraising activity. To be useful, objectives should avoid these terms and be capable of measurement.
- Achievable. Fundraising objectives should be derived from a thorough analysis of the content of the fundraising audit and not creative thinking on the part of managers. Objectives which have no possibility of accomplishment will only serve to demoralise those responsible for their achievement and serve to deplete resources that could have had a greater potential impact elsewhere.
- Relevant. Fundraising objectives should be consistent with the objectives of the organisation as a whole. They should merely supply the detail of what the fundraising function will have to achieve to move the non-profit in the desired direction.
- Timescaled. Good objectives should clearly specify the duration over which they are to be achieved. Not only does this help to plan the strategies and tactics by which they will be accomplished, but it also assists in permitting the organisation to set in place control procedures to ensure that the stated targets will indeed be met.
Fundraising strategy
Having specified the objectives it is intended that the plan will achieve, it is then possible to address the means by which these will be accomplished. The overall approach to their attainment is termed ‘fundraising strategy’. Strategy deals with the major issues that will impact on the whole organisation’s approach to its markets (or subject). This different from tactics which supply the minutiae of exactly what will be done, when, and by whom. Thus it may be a strategy to continue to build major donor support, but the specifics of how this will be accomplished will be left to the tactical component of the plan to follow.
What comprises the general approach to meeting an organisation’s objectives will clearly vary from one situation to another, and it is thus impossible to develop a definitive list of what might be regarded as strategic fundraising issues. As a broad guide, however, the following issues are typical of those that need to be addressed:
- Overall direction – how will growth be achieved? By market penetration, market development, service development or diversification?
- Segmentation strategy – how will each of the donor markets be segmented?
- Positioning strategy – what will the organisation say to each segment about how it differs from other non-profits?
- Branding strategy – what personality and values must be reflected in communications. It is unlikely that branding will just be a fundraising issue, but research tells us that to be successful, an organisation’s fundraising should be carefully integrated with other forms of communication the non-profit might initiate. The brand must be consistently communicated.
The order of this list offers a logical flow of fundraising ideas and each section to some extent will build on the preceding one. That said, after many years experience of writing fundraising plans, I have found that the order in which these should most helpfully be considered does vary by context and in most cases an element of iteration will be necessary. While these appear neat headings, the reality is that they are all closely inter-related facets of strategy and it will normally be necessary to revise the draft of some strategies as others parts of the plan begin to come together.
Fundraising tactics
The next section of the plan details the specific tactics that will be employed. All the actions that will be taken with each form of fundraising are mapped out. This is typically followed by a schedule that indicates when each activity will take place and a section on responsibilities that indicates the staff member who will implement them.
Monitoring and control
Finally, plans should include a section on monitoring and control. The aim here is to be clear about how the progress of the plan will be monitored. This may be as simple as setting monthly targets that are one twelfth of the overall goal. Equally these may be tailored to reflect likely seasonal variations or the outcome from planned bursts of activity.
This framework or one like it can be used to improve the quality of fundraising performance. While changes in the environment will inevitably mean that the plan will evolve as it is implemented, the process outlined above ensures that an organisation takes full account of its environment and develops a considered response. This will almost always be more effective than ad hoc fundraising undertaken based only on the whims of those responsible for the function.
Author: Adrian Sargeant
Adrian Sargeant is the Robert F Hartsook Professor of Fundraising at Indiana University. He is also Professor of Nonprofit Marketing and Fundraising at Bristol Business School in the U.K and a Visiting Professor of Philanthropy at Queensland University of Technology, Brisbane, Australia.
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