How to develop a successful fundraising strategy for your charity

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Fundraising strategy

In what is currently a very challenging time for charities across the UK, it is more important than ever to have a clear and effective fundraising strategy.

Having a good fundraising strategy is crucial. If you are not targeting the right funding avenues with your current strategy then you are wasting your resources. If you haven’t set targets then you are unable to measure your progress. If your team are not given clear direction then they risk not achieving their potential.

Below we will take you through a few steps to help you develop an effective and actionable fundraising strategy.

Developing your fundraising strategy

A good starting point when putting together your strategy is to prioritise your goals and activities to ensure you make maximum use of the resources available to you.

There is no set fundraising template to use, as all charities and organisations are different, but answering the following questions can give you a good base to develop your plans:

What is your current position?

What fundraising activities or campaigns have you done so far? How successful were they? What can you learn from both the successful and unsuccessful ones?

It’s important to include every form of fundraising you take part in here to give yourself a good overall view of exactly where you are – so include events and crowdfunding campaigns as well as grants and partnerships.

Where do you need to get to?

What services do you want to offer and deliver today? How might this change over the next few months/years?

What do you need to put in place and what extra funding might you need to make sure your charity/organisation is able to respond to changing circumstances and new opportunities?

You want to ensure that your fundraising aligns with your organisation’s strategy and future goals, rather than your strategy and goals aligning with, and being limited by, your fundraising.

How much can you afford to invest in fundraising?

Fundraising should always be seen as an investment – whether that’s of time, money or both. Not all fundraising is expensive, but make sure you factor in the time and/or money available to you when developing your strategy.

Do you have any deadlines for your fundraising?

You may have time limits to raise funds, so your strategy should take into account the time it will take to build relationships and develop campaigns.

For example, if you have six months to raise £75,000, designing a strategy to reach major donors who your organisation currently doesn’t have a relationship with will be challenging, as these types of relationships can take a long time to develop.

Therefore your strategy should be more focused on realistic methods of raising the funds. This is where using past experiences and learnings from old campaigns can be useful.

Are there any rules and regulations you need to be aware of?

Always be aware of the rules and regulations that apply to your planned fundraising activities as well as the way you market and promote them.

To find out more, see the Code of Fundraising Practice and General Data Protection Regulation (GDPR).

Full guide to developing your fundraising strategy

Once you have considered the above questions, it’s time to develop an actionable and effective charity fundraising strategy.

Defining your funding channels

Funding channels are the different categories of income stream that your organisation is either already using, or might expect to use in the future.

Defining these categories in your strategy will help you to take a consistent approach to measuring past and present results, as well as comparing your progress with other charities and organisations.

An example of some fundraising channels could be:

  • Individual giving
  • Trusts and foundations
  • Community fundraising
  • Corporate partners
  • Public sector funding
  • Grants
  • Earned income

As well as defining your top-level categories, it is also important to further break them down into sub-categories. For example, community fundraising could include sub-categories from your work with other local organisations (schools, businesses etc.) as well as bake sales or fete’s you run in your community.

Smaller charities may only require a simple and straightforward breakdown of channels, whereas larger organisations may need multiple levels beneath the top-level categories to make sure everything is recorded and measured accurately.

Competitor and sector analysis

It is also useful to assess the external environment, which includes looking at what other similar charities are doing as well as any bench-marking data from voluntary sector studies and reports.

It is important to get a full picture of what others are doing and how the rest of the sector is performing, as this will enable you to see what fundraising opportunities could be available to you to utilise. It can be common for fundraisers to have pre-conceived ideas about what works and what they should be focusing their resources on. Sometimes these are correct, but carrying out an external review offers more insight into different approaches and opportunities you may be missing.

There are a number of different ways you can access and analyse sector-specific data. Some sources of data include:

NCVO Civil Society Almanac – this is an annual publication which analyses the income and expenditure data for more than 160,000 voluntary organisations across the UK. Drawing on a range of sources, the UK Civil Society Almanac provides a snapshot of what voluntary organisations do, their income and spending, workforce, volunteering and its impact.

Fundratios – Instutute of Fundraising (IoF) – In partnership with the Centre for Interfirm Comparison this report by the IoF aims to provide a comparison of performance levels and methods, giving an overview of fundraising performance. The project has devised a set of benchmarks to assess and compare all major aspects of fundraising performance.

Charities Aid Foundation – CAF publish an annual report into UK giving, which looks at the frequency of giving and the average donation size. This is useful data which you can use to benchmark the results of your fundraising strategy.

Identify your targets

A good strategy needs targets to help you measure your success. There are two ways you can set your targets:

  • Research-led target identification
  • Organisation-led target identification

Below we explain each option so you can decide which method is best for your organisation:

Research-led target identification

With this approach you let the research guide your targets. For example, let’s assume your sector analysis has identified that individual giving has increased by 12% year on year over the last three years. However, your organisation has not seen anywhere near that level of annual increase. Is there a problem with your donor stewardship or general communications that needs to be improved?

By analysing your research data you can identify areas in your fundraising that may need extra focus and additional resources. Your fundraising strategy will therefore be focused on identifying the channels that need improving as well as which ones have the potential for further growth.

Organisation-led target identification

This could be where the Senior Management Team or Board of Trustees set a specific target. This could be based on the financial needs of the organisation or on a particular growth target e.g. to double the charity’s income over the next three years.

Your fundraising strategy will therefore be focused on:

  • How feasible it is to achieve the target
  • What resources are required to meet the target
  • The growth rate for each funding channel that is required each year to reach the target

Turning your fundraising strategy into an action plan

The final, and perhaps the most important, element of your charity fundraising strategy is the action plan – turning your final strategy into a set of individual tasks for you and/or your team to action.

The action plan should be a live, ever-changing and updated document that tracks the tasks, who is carrying out the task and the progress of each task.

The more organised your action plan is, the better decisions you will be able to make as you work your way through your fundraising strategy e.g. issues with delivery, management of resources etc.

It is therefore important to arrange regular reviews of your action plan so you, your team and all relevant stakeholders remain focused on the required actions and organisational targets.

About BHIB Charities Insurance

BHIB Charities Insurance specialise in providing tailored cover for community groups, clubs, societies, voluntary organisations and hobby or special interest groups. We offer more than just insurance and we are passionate about supporting local communities.

To find out how we can help your charity or not-for-profit organisation, email us on or call 0330 013 0036 to speak to our friendly, expert team.

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