Ten top tips for creating an effective fundraising strategy

This blog is based on one of seven free fundraising helpsheets for small charities published by Lime Green Consulting in May 2015. Click here to access the helpsheets.

Strategy. It's a word that gets some people very excited and causes others to glaze over.

I've worked with many small charities to help them to develop a fundraising strategy. My aim is to ensure that they have a solid foundation to build upon, a clear picture of the resources required and the confidence to know which fundraising opportunities they're backing and why.

While every charity is different, a number of common problems and questions tend to pop up.

Charities often approach me once they have already had multiple meetings and discussions that have gone round in circles. They're faced with many fundraising opportunities and find it difficult to decide between them, yet are fed up of trying to do everything well and failing. Trustees and senior staff tend to be very passionate about their organisations, which can occasionally be a barrier to balanced and objective discussion.

Frequently somebody will make the valid point that "we put a lot of effort into developing a fundraising strategy a few years ago but couldn't follow it because <insert reason here> - why should we spend time doing it again?"

Invariably it's not the concept of devising a strategy that was wrong, but the way that it was done. I'm a firm believer that having a good fundraising strategy is of paramount importance, even if changing circumstances force you to tweak it later. In the words of former US president Dwight Eisenhower: “In preparing for battle I have always found that plans are useless, but planning is indispensable.”

Having spent much of the past 18 months supporting small charities to develop a fundraising strategy, I wanted to share my top ten tips for doing this effectively:

1. Involve the right people – be clear about who needs to be involved in the process. Varied expertise is important but too many voices can confuse or derail progress. The full Board may wish to delegate most of the work to a sub-committee. Senior staff should be able to input and take ownership. You might decide that you need external expertise from a fundraising consultant.

2. Establish a timescale - trustees and senior management are busy people and the strategic process can involve a lot of research and discussion, so things can drag on. Provide all-important focus by setting deadlines along the way – for instance at the research stage, drafting and final sign-off. Be clear about when you need to have a finished strategy but also be realistic – unworkable deadlines force you to rush critical work, demotivate those involved and tend to be ignored.

3. Consider the context – you can’t make sound strategic decisions without it. It’s vital to consider factors which are both internal and external to your organisation before devising a strategy. If done properly, a SWOT analysis is the bedrock on which a robust, resilient and highly effective strategy is developed. See our helpsheet ‘The SWOT Analysis’ for more information.

4. Identify some figures – what’s the absolute minimum income needed in the coming financial year to sustain your charity’s activities? Are there any co-funding gaps and unfunded core activities or overheads which you need to be aware of? What do you hope your turnover will be in 3-5 years’ time? Fundraising always works better when it’s target-driven so start thinking about the numbers, even if you have to adjust the more long-term, aspirational figures later in the process.

5. Know your fundraising activities – before deciding what’s right for you, you need to understand the general characteristics of different activities. Research the expected return on investment, time required to achieve it, resources you need to put in and level of risk involved – there are various guides out there that will give you a useful starting point.

6. Aim for balance – the ideal fundraising portfolio balances high-risk and low-risk options; quick wins and slow burners. Invest in several activities which take many years to bear fruit and you’ll run out of money before success arrives. Focus only on stable options with little growth potential and you’ll never be able to take the charity to the next level and will probably hit problems later.

7. Play to your strengths – if you’ve done a proper SWOT analysis then a clear picture should be emerging which will inform your final decisions. Be clear on what your ‘unfair advantages’ are – does your charity have strong links with big companies, in-house experience in events fundraising or trustees who are well connected with trusts and foundations? An effective fundraising strategy must play to these strengths – don’t make your job harder than it needs to be.

8. Be prepared to discard options – many charities make the mistake of overcommitting themselves. If you try to do too much, you’ll end up doing a lot of things badly. Be clear on the limitation of your resources and don’t be tempted to pursue every opportunity – the ideas which you discard are as important as those which you choose to invest in.

9. Set realistic targets – aim low and you might just achieve it, but with little reward. Aiming high is important but being completely unrealistic is a sure-fire way to demoralise staff. Use your general fundraising knowledge (see 5. above) to set realistic targets. Crucially, think about outputs as well as outcomes – there’s little point in measuring trust income in the early months, but knowing how many carefully targeted applications are being sent each month is important.

10. Commit to a plan – the worst type of fundraising strategy is one which is re-written every year. Commit to a plan and give staff the time and space to execute it – nothing erodes confidence like suddenly switching focus to a new idea just because another charity has had some success with it, or giving up on something before it’s had time to bear fruit. Establish a clear timeframe, monitor progress, and don’t deviate unless there’s a really compelling reason to do so.

What do you think of these tips? Do you have any of your own advice to add? Please comment below and let us know!