In honour of Charity Village®’s anniversary celebrations, this month’s article will outline 15 points you should consider when developing your organization’s Fundraising Plan. Canada Revenue Agency’s Fundraising Guidance directs charities to fully disclose expenditures to revenue so you need to be very strategic in order to capitalize on your efforts and ensure the best returns on your investment.
I’m keeping CRA’s Prohibited Fundraising Conduct, Best Practices, and Areas of Concern in mind as I write this column and have provided pertinent links. If you’d like more information about this Guidance you can also check these previous Charity Village® articles:
- What Do I Need to Know About CRA’s Fundraising Guidance
- Help – I’m still confused about the new CRA Fundraising Guidance!
Your organization’s Fundraising Plan — like any plan — is a process. The time you invest to explore your options from an informed and objective perspective will pay off. There are distinct advantages to opening the dialogue necessary to be strategic. Your team’s ownership in seeing activities through is the most important benefit of the conversation that ensues. Plans that are dictated from above are destined for failure.
Another benefit of your planning process is understanding different fundraising methods and each one’s effectiveness. Many charities, particularly those that are new to fund development, don’t recognize the true costs of running a special event or the returns gained by strengthening your relationship and commitment with existing donors.
In order to adequately allocate the time and money to fundraise efficiently, you should outline a 12-15 month plan. The following headings are purely a guideline for thinking through your plan. Review the information and determine what best suits you to include in your document and communicate your strategy to the board and fundraising team.
1. Mission Statement
Remember your mission “roots” your organization — programs (and subsequent fundraising) grow from there — make sure it’s succinct, pervasive through your charity and in your public documents, then ask people to invest in your good work.
2. Strategic Plan
Identifies the organization’s top 3-5 strategic directions over the long term. Give donors the vision of your charity’s future. Demonstrate that there is a direct correlation between these organizational priorities and those of your fundraising strategy. Then, ensure you are choosing the most cost effective methods to raise the necessary funds for your work. CRA includes “prudent planning processes” as the first of the Guidance’s “Best Practices”.
3. Readiness
This section should outline your organization’s fundraising readiness and accounts for the resources available to you. There are factors that will influence your success and therefore, your fundraising costs. These include the charity’s age, reputation, location, leadership consensus by the board and chief executive, the cause, type of campaign, track record, competition for funds, and what other human and financial resources are available. Under “Evaluation of Fundraising Activities” CRA acknowledges some of these variables when examining fundraising costs.
4. The Case
Your charity’s Case for Support articulates the priorities identified in the strategic plan. Sometimes there is more than one case depending on the level of sophistication and organizational priorities. The cost of delivering on your mission is determined, the existing resources outlined, the financial goal is stated, and the request for support is made. The needs statement is defined in a compelling way that helps prospective donors understand how they can make a difference.
5. Human Resources
The cost of fundraising varies broadly depending on whether there is a development department or one-person show. Identify who is responsible for the ongoing management and supervision of the charity’s fundraising practices. It’s only in the last quarter century that this profession has really evolved and the value of deeply committed and well-trained volunteers is still the key to success. These individuals open doors and make introductions to others who are moved by your cause. According to CRA, “recruitment of volunteers is not considered a solicitation of support”.
6. Donor History
You need to know your organization’s key donors. How much have they given and how long have they supported your charity? If you don’t have fundraising software to run these reports, review your records/receipts for at least three years, particularly for those who’ve donated $100 or more in a single gift. Donations at that level or more are a reasonable indication of ability and interest. This is important information when determining your organization’s potential and understanding where your effort is best directed.
Renewing and upgrading your existing donors — perhaps encouraging their monthly support — is a cost-effective way to strengthen your revenues, so don’t overlook this strategy. After years of support it offsets the initial investment made in acquiring that donor.
7. Prospecting
This is the expensive part of fundraising so try to qualify individuals first because they represent the largest portion of private sector donations. Start with those closest to your organization (the people who know the most about your charity’s good work) — board members, volunteers, staff, donors, and clients. (Some charities do not canvass their clients so double check for policies). Next, consider people who may not have direct contact but know about your organization. For instance, client’s family members, former-board, volunteers, or staff and even vendors with whom you do business. Whatever you do, build relationships with those closest to you before you try the “shotgun” approach. Having said that, and provided it’s within your budget, you may choose to use Direct Mail for donor acquisition. Just remember that it will cost more than $1 to get the same donated so be sure your board understands that reality.
Proposals to other registered charities including charitable foundations do not count as “fundraising”, according to CRA’s Guidance. This means that neither the expense nor the revenue would be included in lines 4500 (receipted), 4630 (fundraising) or 5020 (expenditures) on your T3010.
8. Fundraising Goal
How much do you need to fill the gap between income and expenditures? Where will the difference come from? Whom will you approach and how? Identify your income projections and from what methods (e.g. special event; letter writing; face to face visit etc.), and sources (e.g. individuals, foundations, businesses — local or corporate, etc.) Now that you have defined your target audiences you must project goals from each source and what method or technique will have the greatest probability of success.
9. Stewardship
Outline your charity’s strategy to use funds in the way the donor intended, thank them and get tax receipts sent promptly; there is a direct correlation between the agency’s ability to respond quickly to gifts and a donor’s tendency to renew their support. Considering the most expensive part of fundraising is donor acquisition, be sure to devote adequate resources to keeping your existing donors informed and happy. Stewardship includes ongoing communication as you cultivate the relationship. According to CRA these activities fall within your fundraising costs (covered in “What is Fundraising?“)
10. Budget
It’s important that everyone within the organization recognizes there is a cost to fundraising — particularly in the area of donor acquisition. You also may require computer hardware or software to help you accomplish your goals — these will need to be researched and factored into your figures.
11. External forces and trends
Understand your organization’s potential for success by acknowledging the current economic climate, sectoral issues and individual perceptions about your charity. If there is a chance that the impact of any of these factors will be negative, it’s best to anticipate the consequences and include them in your plan (e.g.) a major capital campaign has been kicked off in your small community or a downturn in the economy will undoubtedly have an influence on your fundraising efforts.
12. Suggested Timetable
Be sure to outline (at least) a 12 to (ideally) 15 month schedule so there is a visual overview of all fundraising activities within the agency. (Try months across the top and methods down the side). Include start dates, activity deadlines and end dates to help everyone understand the necessary coordination of their efforts. If you are a United Way member agency, you need to respect their campaign schedule and not solicit funds during that window.
13. Fundraising Policies
The chief executive or fundraising committee may recommend certain policy areas to the board for consideration. Include reference to these in your plan each year so they are not overlooked. An example of this is a Gift Acceptance policy that outlines what your charity will and will not allow. For instance, it’s quite typical that those serving children don’t take funds from tobacco or alcohol producers. Here are some samples that AFP has collected.
14. Disclosure and Accountability
CRA defines disclosure as the “sharing of information about a charity’s fundraising and/or finances”. Their expectations need to be acknowledged and respected by your board and staff. Specifically, they identify “Disclosure of fundraising costs, revenues, and practice” (including cause-related or social marketing arrangements) and under Concerns, possible misrepresentation.
15. Evaluation
You won’t know if you’ve been successful if you don’t set your benchmarks before you start and measure your success against them (e.g.) — was the goal of your special event to raise awareness or money or both? What are the measurable indicators that help you know if your efforts paid off? Reflecting on successes and failures informs our decisions. All Canadian registered charities now need to refer to CRA’s Fundraising Guidance when assessing their activities.
For more information on CRA’s Fundraising Guidance go to previous Q & A articles and: www.capacitybuilders.ca/clip.
Here are some helpful resources on Fundraising Plans:
Cynthia Armour is a freelance specialist in fundraising and governance. A Certified FundRaising Executive (CFRE) since 1995, she volunteers as a subject matter expert with CFRE International. She works with boards and senior staff to ensure that strong leadership will enhance organizational capacity to govern and fundraise effectively. Contact Cynthia directly at 705-799-0636, e-mail answers@elderstone.ca, or visit www.elderstone.ca for more information about her services.
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