5 Steps to Create a Strong Annual
                                    Fund Development Plan

5 Steps to Create a Strong Annual Fund Development Plan

February 13, 2017

For many nonprofits, the beginning of a new calendar year ushers in a period of reflection and planning. A strong annual development plan, informed by the previous year’s activities and performance, can be an essential tool in keeping organized and on track throughout the coming year. Below are five important steps to consider, and you can also download this template to help you build your annual plan.

1. Reflect & Check Metrics

If your nonprofit has specific goals and key metrics in place to measure the effectiveness of fundraising efforts, now is the time to look at your organization’s performance against these goals and metrics. If you don’t have specific development goals or metrics yet, that’s okay! You can still take a look at some of the following, using the data you have from the previous year:

  • Donor retention and attrition rates.
  • Return on investment for direct mail pieces and digital campaigns that may have an associated cost.
  • Return on investment for donor recognition programs. Correlations between recognition programs and increased gifts/donor engagement can be a little tricky to measure but you should still ask yourself, “How much time and resources are we spending to properly recognize and steward our donors? Do we have room to spend more, or do we need to scale back?”
  • Donor feedback. You should absolutely take anecdotal feedback from donors into consideration (i.e. “Your holiday thank you video warmed my heart”), as well as less personal feedback (i.e. donors unsubscribing from email lists or opting not to be contacted).
  • Donor demographics. Is your donor base changing? Do you have more younger or older donors, or more donors from a new geography? This information will definitely impact how you develop your strategies and tactics as your donor base evolves.

Additionally, if your organization has a strategic plan, it most likely has a component related to fund development, so now would be the right time to make sure those high level development goals are in alignment with current fundraising efforts. Before you move on to the next step, if your organization has established specific goals around development, you should consider whether or not those goals are still relevant. Organizational priorities can absolutely shift due to external factors, so it is important to ensure that fundraising goals are also adjusted to accommodate these changes.

2. Set Goals

After you’ve reflected on whether or not your fundraising goals from the previous year are still relevant, and you’ve made any needed adjustments, it’s time to set some new goals! Some things to consider when setting goals:

  • Make them SMART! SMART stands for Specific, Measureable, Agreed Upon, Realistic and Time Bound. Creating SMART goals is a fairly common practice among many nonprofits, and is as helpful as it is simple to do.
  • For monetary goals, consider creating “low, middle, high” scenarios, where you identify the minimum amount needed to support your organization’s financial needs (low), a slightly higher goal that seems achievable (middle) and a “stretch” goal (high).
  • Think of one Big Hairy Audacious Goal (BHAG) to add to your plan if your organization doesn’t already have one! Give yourself one deeply optimistic, challenging and “out-of-the-box” goal to work toward, rooted in your organization’s mission. This can really help bolster the spirit of innovation and ongoing improvement in your fundraising efforts.

3. Define Strategy and Tactics

Now that you have goals, you must develop strategies and tactics to achieve them. As you work on strategies and tactics for achieving your goals, reflect upon the previous year’s activities. For instance, was your six piece direct mail campaign too costly with little return? Try a new tactic! Think about changing the format of your mailing to a postcard, or scrap direct mail altogether in favor of a digital campaign. Once you’ve thought about adjustments in strategy and tactics from the previous year, ask yourself the following questions, the answers to which should be included in your plan:

  • What are the inputs (activities, efforts, time and resources) that I need in order to get the desired fundraising outcomes?
  • What are the channels and mediums that will be used to engage donors with specific fundraising efforts? Social media? Direct mail? Peer to peer fundraising? Events?
  • What will the role of staff and volunteers (including your board) be in deploying your strategies and tactics?

Some organizations find it helpful to organize strategies and tactics by broad revenue “buckets” (i.e. foundations, individuals, corporate, events). While it is important that your strategies and tactics are well organized and defined, I encourage you to think about all of the ways that you can represent this information–an annual development plan does not need to be a lengthy, dry document, so get creative! An annual development plan should be thorough and clear, but can also be energizing and inspiring.

4. Coordinate for Cohesion

As you develop your strategies and tactics, it is important to confer with other staff to ensure that everyone is on the same page about how your organization will achieve its fundraising goals. If you’re a small organization, there’s a good chance you’re working collaboratively to develop strategies and tactics, but in larger or more decentralized organizations, more coordination is required. Staff who have a “fundraising-adjacent” role, like communications or volunteer coordination, should be consulted and given the opportunity to provide input on strategies and tactics. This is not only out of courtesy, but also because they could have ideas you may not have thought of.

It is also important to ensure that senior leaders within your organization are on board with your annual plan’s strategies and tactics. Most importantly, your organization’s board of directors, especially the development committee chair, should understand and endorse the strategies and tactics of your plan. While not necessarily required at every organization, it can sometimes help with buy-in to have the board development committee vote to approve the annual development plan.

5. Get Out of Your Silo and Share

Once you’ve translated your goals, strategies and tactics into a fully fleshed out plan, don’t let it languish on your hard drive or in a filing cabinet! If it ends up being a longer narrative-style document, think about making a jargon-free, simplified version to share with all staff or keep posted in your work space for daily motivation. Bring it to meetings and reference it as you work with your team. Talk with program staff about how exchanging information on goals and progress with one another is mutually beneficial and can strengthen your organization’s culture of philanthropy.

Miquette Thompson, CFRE is a guest blogger for LiveImpact, and has been working with the Bay Area nonprofit community for over a decade in both fundraising and direct services. Miquette is a graduate of University of San Francisco’s Master of Nonprofit Administration program, and has dedicated her career to supporting organizations that serve marginalized communities.



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