Strategy

Your strategy is the reason you know you can get where you are going, no matter how hard the road or high the mountain. A good strategy will not just tell you where you are going and provide a route map, but how you are going to get there in terms of the supplies you need, companions on your journey, the conduct you pledge to maintain and the emergency procedures you will adopt when things go wrong. A great strategy will also deal with the rewards and relationship building needed when this journey ends to prepare the way for your next journey.

A fundraising strategy is not unlike a business plan, though instead of investors keen to make a profit (if cautious not to lose their investment) you are more likely to be faced with a Board of Trustees keen to see a very healthy profit to spend on the organisation’s mission, and fearful of any loss that might occur. For those reasons your strategy will need to have clear and convincing reasons for the profits you estimate, and a realistic assessment of the difficulties you may face.

All fundraising requires investment, and the essence of a fundraising strategy is the case for investment in certain techniques, and the hire of staff, equipment and material to carry out those techniques. It should clearly set out the context for the investment, reasons for the techniques chosen, the resources required each year and the income and expenditure that it is logical to expect.
A good strategy does not merely add a few percent to income and expenditure each year, but seeks to set out and achieve investments which will provide sustainable profit flows to meet the organisation’s mission in the long term.

Developing a Fundraising Strategy

Fundraising is like the snow on Mount Fuji – it is often the most visible part of an organisation and the part that people notice first, but below the snow is the structure of the organisation carrying out its work. Holding the whole operation together over time is its strategy. Part and parcel of that overall strategy should be the fundraising strategy. This and related articles shows not only the process by which it is created, but also the planning and budgeting that follow closely from a good strategy and ensure that it succeeds.

Setting a strategy

To be efficient in the search for funds it is necessary to plan, and to plan efficiently it is essential to have a strategy. That strategy will consist of selecting the best combination of fundraising techniques for your organisation and deploying them in close combination with the activities of the rest of the organisation, such as promotional or campaigning work. This helps to ensure that the organisation works harmoniously towards its overall goals. Fundraising is often seen as an add-on extra to an organisations’s work, or as a necessary evil. Integrating the fundraising strategy into the overall work of the organisation will help change this attitude, reducing stress for the fundraisers and helping to maximise income generation.
An essential part of fundraising strategy is the allocation of resources to fundraising techniques to meet the organisations’s need for income over time. Different techniques are needed to meet immediate needs, mid-term (say three- to five- year) needs and long-term (say five- to ten-year needs). It is essential that short-term needs do not preclude investment in medium- or long-term strategies if income is to be maximised in the medium or long term. An important part of the benefits of appropriate investment ot those who allocate resources, so that the future needs of the organisation can be met as they occur.

Developing your strategy

Initially you should carry out a fundraising audit, the next step is to perform a gap analysis to discover which areas of fundraising are missing. From this information you can then start making projections.
Testing your strategy

In presenting a new stategy, particularly one involving increased investment or the introduction of new fundraising techniques into your organisation, you may well find that there is a strong tendency to think that it will only work for someone else. ‘It won’t work here’
It may work in London – but not in Wales, Scotland, or Rutland. It may work for Oxfam, Friends of the Earth and Save the Children but we are different. It may work in India, Japan and Chile – but it won’t work in Canada…
Phrases like these are so familiar to fundraisers that they have developed a stock response – test it!
Budgeting

Expenditure on fundraising is an essential part of any organisation’s outgoings and fundraisers, like any other employees, should have a reasonable and secure income. The lack of proper budgeting for this is quite common, and sadly, this means that organisations do not grow at the rate they should and their charitable work is therfore severely curtailed. It is a false economy in any sector of business to underinvest in marketing the products, or in the research and development of those products. More on budgeting.
Planning

A master plan can be quite simple; just a sheet of A4 paper with the months of the year across the top, the list of planned fundraising activities down the left-hand side, and a series of crosses in the squares under the months where you plan these activities.
There is however much more to planning than this.
It is very useful to indicate on the plan any other activities scheduled by the rest of your organisation that may affect your plans. For example, the dates when any newsletters are issued are important, because you will schedule your appeals to members at suitable intervals between them to avoid members feeling that you could have placed your appeal in the newsletter and saved the postage. (The popular press has trained the public to be eagle-eyed about unnecessary expenditure by charities, and to retain their confidence you should be one step ahead.) Incidentally, if you were to place your appeal in the newsletter the sharp fall in response would far outweigh the saving in postage. Or would it? If you are not sure, test!
Naturally, you will also need to work out exactly who is going to undertake each of these activities, when they should start, and the key stages at which you will need to monitor progress. Don’t try to do everything yourself.

 

Setting a Strategy

Strategic thinking: getting started If you have just started as a fundraiser in a charity, or if it is time to take stock of where your work is going, a good idea is to borrow a technique for strategic thinking from business management, called ‘re-engineering’. This has been called the blank page process. Take a blank page and write out where your organisation wants to be in three years time (or five years, or whatever time-span is appropriate) in terms of the income you will be required to generate. From that starting point calculate how you will generate that income as if you were starting from a greenfield site and not from the awful mess you may be confronted with at present. It is surprising what a salutary experience this exercise can be. Knowing where the organisation would like to be in terms of the work it does, and hence what kind of financial resources will be required, means you can work out how much investment is needed in various areas of fundraising to produce those resources. Naturally, the resources may not be currently available and you may have to trim your investment, thus limiting future income growth. To do all this professionally it is essential to have an overview of the range of fundraising techniques that could be employed to reach your goals. This wiki will give you that overview. Reviewing the techniques: where the money comes from Statistics from the Chronicle of Philanthropy, USA 1992 Charitable Giving by Source (in $ millions) Individuals 101,830 81.9% Bequests 8,150 6.6% Foundations 8,330 6.7% Corporations 6,000 4.8% Total 124,310 100.0% Sources of funds are limited in number. They can be roughly grouped into the following categories: funds from individuals, governments, companies, trusts and foundations, the National Lottery (in the UK), trading, interest, dividends and any fees or other earned income. Of course, funds from individual giving come via a huge number of routes. Many voluntary organisations’ core funding comes in relatively small donations from many supporters. In their book The emerging nonprofit sector – an overview Lester Salamon and Helmut Anheier draw a very wide net around the notion of non-profit organisations. They claim that most non-profit income is from private fees and sales (47% of income) followed by govenment giving (43% of income). Competitive and collaborative strategies The technique described below is fine to meet known future financial needs of the orgnaisation but in the real world other factors can play a strong part in strategy development. Your organisaion may have strong competitors against whom it may wish to either challenge by competing directly for market share by aggressively fundraising with the same techniques. For example, if their main recruitment technique is direct mail you may compete by producing better direct mail packs (or cover a wider variety of lists), or by being willing to endure smaller returns to ensure that you build a large base of supporters. This process was the one used by Japanese car manufacurers in challenging the US and UK car markets. Alternatively, you could look for a niche they may not be using or even aware of. For example, a cancer charity could steal a march on its competitors by opening up charity shops and buy the expertise necessary by advertising fo staff at a higher than usual rate of pay to draw in the best professionals from other organisations. On the other hand, it could be that as collaborative charities you may choose to avoid fundraising that clashed with others, and in collaboration with another charity you could divide up the market by agreement, each working in a different way to fund complementary work. For example, one charity coud look for government funds and fees to open up a new area of health work whereas a sister charity could concentrate on building a donor base of supporters so that it could engage in campaigning to challenge government policy. This could even involve setting up a non-charitable membership organisation to act as a pressure group. Emergent strategy Indeed strategy is rarely carried out exactly as planned. This may be due to the external environment causing significant shifts in the situation that governed the formation of the original strategy, or it may be caused by an internal force, such as senior managers who are not happy with the strategy, and subvert the process. If either of these forces is strong enough they can derail a strategy and prevent it reaching its objectives, or corrective action can be taken to stop an emergent strategy from taking place. In many organisations strategic planning is rarely carried out and strategies emerge from the day to day practical decisions that managers make or by the shifts in policy that the governing body agrees. In rapidly changing circumstances this degree of flexibility can be very effective if deliberately and properly managed but it is more usually a sign of poor management and results in the organisation being blown about one way then another without a clear goal in sight. Strategic drift Another danger is that once a strategy is set it is not monitored and corrections are not taken to keep it on course. In these circumstances the objectives can alter sublty and the course of activities drift away from the original target. If this process becomes deliberate than a new emergent strategy may develop along a new path which may or may not be appropriate for the organisation. References