Starting a Charity? Fund Development Planning

We have been exploring the area of the nonprofit board's work and responsibilities, its interactions and performance evaluation. This has been good preparation for a new nonprofit organization's first steps in fundraising, since the foundation for asking the public for financial support starts at the top of the leadership pyramid of the new charity. Let's turn now from governance and get right to the heart of the fundraising process, which is the creation og a fund development plan.

We're going to be talking about a Fund Development Plan that the founder, board and executive director can use as a guide to having a more intentional, reasoned and systematic approach to raising voluntary contributions from the public in support of our new charity’s mission.

It may well have been hoped by the organization’s leadership that this plan would consist of a simple timetable by which a consultant or staff would be approaching specifically named donors for contributions. And, in fact, the Fund Development Plan will include these kinds of specifics when we're done. But there is a great deal more involved in the planning process than that.

The very first steps that must be taken by the new charity start-up, if it expects to raise voluntarily contributed funds on a consistent basis for the fulfillment of its mission, are the following:

1. Strategic Plan -- The organization must develop for itself a written strategic plan that sets forth clearly and completely the direction that our new charity is going to move in the next 5 to 7 years. This plan will contain not only a description of the organization’s direction, but a series of specific strategies by which it will accomplish the social aims it sets out to achieve, accompanied in each instance by the series of tactics that are intended to be employed as staff and volunteers pursue each strategy.

2. Selection of Project -- Only when that basic groundwork is complete can the organization move on to the next step, which is to select one or more projects around which to mount specific fundraising efforts. The reasoning behind this and the procedure to follow is further discussed in the section below on “Projects”

3. Case for Support -- When the strategic plan has been completed, the next step will be to develop a written document called a "case for support," which comprises the reasons why anyone should or would give money to our organization. This is discussed more completely in section we will see later on the “Case for Support.”

4. Pool of Prospects -- Upon completion of the selection of project(s), the next step will be to look at developing a pool of prospective donors, delineated by type, such as individuals, foundations, corporate grants, corporate sponsorships and government grants or contracts. This strategy is also further explained in its own section.

5. Enlistment of Volunteers for Cultivation and Solicitation -- At the point where a substantial pool of prospects has been identified, the next step will be to create a plan, policy and procedures whereby volunteers, especially the Board of Directors, will become involved and invested in the fundraising process.

Volunteers are vitally and strategically necessary to the fundraising effort for three compelling reasons:
1. Existing staff, particularly in a brand new nonprofit organization, cannot carry the fundraising load alone, and it is unreasonable and unproductive to expect that they should do this. THere are too many other issues and concerns that need attention on a daily basis.

2. Volunteers have networks of relationships with friends, colleagues and associates throughout the community. These have been developed and cultivated over many years. These relationships are key to identifying, cultivating and soliciting prospective donors whose contributions are so urgently needed. If the organization is deprived of the ability to use these relationships, there is, quite literally, no hope of mounting a successful fundraising effort that will supply enough revenue to effectively carry out the organization’s mission long term.

3. Volunteers are much more effective than staff in cultivating and soliciting the people they know. With a little training and coaching, most if not all the Board of Directors can be effectively brought into the fundraising effort.

6. Cultivation and Solicitation -- It is at this point that cultivation and solicitation of specific donor prospects can be discussed and decided. This is the step that will match specific strategies of approach with each donor prospect and give each strategy a person who is responsible and a timeline or schedule on which the approach will be made. This is further discussed under the section on “Cultivation and Solicitation.”

7. Thanks and Recognition -- Finally, but no less important than the strategic plan and the case for support, considerable thought must be given to deciding and codifying a system for giving donors appropriate and abundant thanks and recognition.

Particularly as we are engaging the Baby Boomers and Gen X cohorts, this step can be delayed or omitted only at great peril to the organization’s fundraising efforts. The reason for this is that research demonstrates that, even more than their “Ike Generation” forbears, the Baby Boomer and Gen X cohorts desire and need thanks and recognition for their philanthropy as a prelude to their next gift. This work is further delineated in the section below on “Giving Thanks and Recognition.”

Having prefaced our plan with this summary of its content, let us move on, in the next post, to setting forth the contents of each step of the plan.