Number 8
Developing a
Fundraising
Strategy
A fundraising strategy is a plan that sets out:
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what your organisation was set up to do and its main areas of work.
what your funding needs and priorities are over the coming period of time, say
over 1 to 3, or 1 to 5 years.
how you intend to raise that money.
where you will raise it from.
Before you can devise your strategy you need to set down some plans for your
organisation.
Organisational Planning
In order to plan fundraising effectively, and to avoid losing sight of your purpose, it
might help to break down your plans into the following different levels:
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long-term
strategic planning
your overall aims and mission.
medium-term
business planning
resources needed to achieve aims.
short-term
operational planning
detailed breakdown of specific pieces of work to fundraise for.
Strategic Planning
This means thinking through and spelling out what your organisation's broad purpose
and overall aims and values are; that is, why you exist and what you want to achieve.
You can express these in the form of what is often called a ‘mission statement’.
Try to write a statement in one or two sentences like this one for an estate based
housing advice project:
Our mission is to provide high quality advice and representation on housing matters
to all tenants on the Beaver Estate.
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In carrying out this mission we will ensure that the highest standards of advice are
maintained and that equal opportunities apply throughout the service.
Your mission statement can then be followed by a list of ‘strategic’ aims, that is, a list
of key work priorities for the future. These will be both short-term and long-term
ones.
For example, the following is a set of strategic aims for the Beaver Housing Advice
Project:
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To provide free and effective housing advice information and representation to all
tenants and residents on the estate.
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To provide an opportunity for local residents to become volunteer advisers,
through the provision of regular training and support.
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To monitor all enquiries as a basis for negotiating with the landlord for better
housing policies and practices.
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To make links and co-operate with other relevant advice providers in the
borough.
The reason to think about your fundraising strategy at this level is two-fold.
Firstly, it helps to remind you what your reasons for being are.
It is easy to lose sight of your overall purpose and depart from original aims once you
are caught up in the day-to-day work, or chasing new pots of money just because
they are there.
Secondly, it is a useful and concise way of explaining who you are and what you do
to prospective funders.
Everything your organisation does should relate back to your strategic aims.
Business Planning
This follows from the strategic plan and spells out in more detail how the aims you
have identified will be carried out and how much it will cost.
This plan will include a budget, with a forecast of income and expenditure.
As well as setting out how strategy will be implemented it should also demonstrate
the feasibility of what is proposed.
Funders often ask to see a business plan before making any commitments to fund,
especially if you are asking for a substantial amount of money.
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Business plans usually cover the coming 2 or 3 years, although they may need to be
adjusted annually.
Operational Planning
This is the level at which you set out in even further detail the specific objectives,
targets and tasks that you will carry out in order to meet your aims. It is more
immediate and short-term.
You need to think how each objective or target can be achieved; what activities will
be needed to achieve them; what resources will be required; and how the progress of
each will be measured.
You will need to decide on priorities and timescales.
An example of detailed objective planning for the Beaver Housing Advice Project
might be:
In order to meet our second aim (providing opportunities for local residents to
become volunteer advisers) we have agreed the following list of objectives that we
want to achieve in the next 12 months:
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2 recruitment drives at 6 monthly intervals. These will be achieved via door-todoor leafleting, giving talks to local groups, and holding 2 ‘open days’.
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Establishing a written selection policy and procedure, and a volunteer contract.
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Agree an expenses policy for volunteers (e.g. travel, childcare).
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Provide training in interview skills, equal opportunities, housing rights, and basic
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Welfare benefits. This will be provided both initially and on an ongoing basis.
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Provide regular support and supervision to volunteer advisers. The centre’s
organiser and her deputy will provide this.
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Appraisal of the scheme after the first 6 months and then again after 12 months.
From the appraisal we will make recommendations for any future changes deemed
necessary.
Check back to make sure your objectives meet your aims.
Consider each objective separately and work out what resources you need to find
and then draw up your budget.
Work out what sort of money you need - is it capital or revenue? One-off or ongoing?
A large or small amount?
Do not forget those hidden costs like insurance, repairs, heating and lighting.
And, remember, money isn't the only way to get something - you may be able to get
help in kind like gifts of equipment.
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It is often easier in terms of raising money to think in terms of projects.
So, go through your agreed list of prioritised objectives and see if you can package
them up into one whole or a number of distinct projects.
Project Thinking
Virtually all-new money now is for projects. It is far easier to raise money for
something specific, like a piece of equipment or a particular activity or project,
because funders want to feel their money is doing something and they want to be
able to see what their money is achieving.
This presents a problem for many groups. The main need is often for ongoing
revenue for things like rent and wages, yet many funders are not interested in this.
The shift away from funders granting money to support ongoing core costs to
contracting for services and funding for short term measurable pieces of work, has
meant that to attract funding now you too need to break your work down into specific
projects or services.
This means finding funding for the services you provide rather than for the running of
your organisation.
This may sound alarming initially. The way to overcome this is to ask funders to pay
for things, which contribute towards your general running costs but which are clearly
defined and specific.
You need to be able to think about your work in terms of ‘projects’ or ‘chunks’ or
‘pieces’ of work which an be clearly defined, costed and measured.
In this way you can package elements of your running costs into each project so that
funders will continue to fund those less attractive items like rent and photocopying.
What is a project?
A project is a discrete piece of work with clear aims and outcomes that can be
measured.
The work of your organisation could break down into projects, which might be new
pieces of work; or a development of an existing piece of work; or the repackaging of
existing work. Be as creative as you can in project thinking.
For example, the Beaver Estate Housing Advice Project could divide its work up into
chunks such as employing 2 advisers; running a volunteers scheme; research and
social policy work; and training provision.
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Each of these discrete projects would have to be carefully costed so that each of
them includes a financial contribution towards the general running costs of the whole
organisation.
A fundable project should be:
Specific - a clearly identifiable piece of work or equipment.
Meeting a need - you must be able to identify need and explain how your work will
address it.
Important - to you, to your users and potential funders.
Of benefit - the outcome should be effective and worthwhile.
Realistic - the project must be achievable.
Cost effective - it should demonstrate value for money, which doesn't have to mean
cheap.
Topical - if possible it should reflect current concerns and practices.
Relevant - to the funders concerned.
Bite-sized - it should be an appropriate size for the funder.
Large pieces of work can be broken down into smaller parts if necessary.
Project costing
There are a number of issues to bear in mind if you approach your fundraising in this
way:
When including an allocation of general costs or overheads into your project, make
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sure that allocation is made on a sensible and realistic basis which can be
explained.
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Do not just pluck figures out of the air. For instance, if the project represents 20%
of your total staff time then it would be reasonable to expect it to pay 20% of the
rent and other running costs.
Your budget will have to reflect your project thinking and shift away from a core
budget to cost or project centres.
In costing each project you need to include one-off start up and capital costs and
then divide your other costs into 3 categories - ‘direct’, ‘shared’, and ‘indirect’.
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Direct costs are those that apply exclusively to the project, such as salaries and
recruitment costs.
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Shared costs are those, which will be shared out proportionately between a
number of different projects, like rent and cleaning.
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Indirect costs are those, which are incurred by the organisation as a whole and
may include such items as insurance, audit fees, and management committee
expenses.
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As with shared costs these can be worked out on a percentage basis.
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If you already receive some core income from another source then that could
cover your general costs so that you need only approach new funders for the
interesting bits.
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Some problems and pitfalls with Project Thinking
Beware of fundability taking over from your original aims and objectives and
becoming the driving force of your group. You need to aim to strike a balance
between what you want to do and what funders will pay for.
Developing such a fundable project that you are offered too much money! If this
does happen you will need to ask some of the funders if they would be willing to let
you spend their money on another project or activity, or let you carry it over into the
next year.
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They will usually agree to some arrangement like this having already decided
they want to support you.
If a project is not fundable you may need to re-think it, re-design it or re-present it to
make it more fundable. If you cannot find a way of making it more attractive to
funders you may have to o something else that is and find alternative ways of
covering your original project. You may have to leave it for the time being - trends in
funding may change, allowing you to pick it up at a later date.
Exit Strategies
If you are applying for money for a project for a fixed term, say 1 to 3 years, then you
need to demonstrate what will happen at end of that time.
This is called your exit strategy, and it is something funders are increasingly asking
for.
You could opt for one of the following strategies:
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Another organisation will take over the work
Having demonstrated the need and success of the project it will be refunded
It is a one-off piece of work and will end with the expiry of the funding
A gradual wind-down. Whatever strategy you go for, it will need to be planned
early on in the life of the project.
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Where to raise money from
Now that you have worked out what you want money for and how much, the next
step is to identify likely funders.
The main sources are:
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Statutory bodies - the local authority or central government departments, the
health authority, European funds.
Charitable - trusts, foundations.
The Big Lottery Fund.
Private sector - donations, sponsorship, help in kind.
Earned income - selling services, charging fees etc.
Fundraising events - organising benefits, street collections, raffles etc.
One-off funding schemes - Co-op Community Awards Scheme,
Research funders' guidelines
Follow trends in local authority strategies such as their Community Care plans or
Anti-Poverty strategies.
Use networks.
Scan journals.
Talk to policy makers in your area - planning officers, councillors, grant-aid officers.
Discuss your future plans with your existing funders to sound out their ideas and
support.
Get involved in any voluntary sector partnerships, so that you can influence policy as
well as keeping alert to any changes.
Check Funder finder at Community Action.
How will you fundraise?
Consider the skills of individual members of your organisation and allocate tasks
accordingly.
You need people who can:
 write well
 prepare budgets
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speak to funders
persuade people of the value of your organisation and its work
keep files and records
organise events
The best way to proceed is to form a fundraising group where members can support
and learn from each other and make sure that things get done on time.
If you do not have people with the skills or experience in your organisation, check for
training course organised by Community Action.
The Funding Adviser can also provide guidance and some support once you have
set up your fundraising committee. In some cases, someone in your local authority
maybe able to offer you some advice and assistance as well.
However you decide to go about it remember that co-ordination is essential. Keep
everyone in your group or organisation regularly informed of progress and any
results.
Keep records
You need to keep written records of who you have asked for what, how much, when
you asked them, and what their response was. Keep copies of all correspondence.
These records will be helpful in the future. They will give some of idea of what
worked well, who responded positively, and what was a waste of time and effort.
If an organisation funds you once there's a good chance that they will do so again.
unless they have specifically said that they will not.
Relationships with funders
Developing a relationship with your funders is important as you may want to go back
to them for more money in the future.
Always acknowledge any communication from them swiftly. Have one or (at most)
two named contact people in your group whom funders can deal with so that they get
to know individuals and names.
Keep them regularly updated about progress in the area they have supported. Send
them examples of work, photos, annual reports, audited accounts, press releases,
whatever.
If it seem appropriate invite them to visit your project, or to special events like AGMs
or open days.
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Remember to acknowledge their support on documents relating to the project. By
doing this you are making them feel involved and giving them a sense of ownership
of your project.
Keep yourselves informed of any changes in their funding policies or personnel.
It is very easy to spend endless amounts of time and energy raising money and then
forget to say ‘thank you’ and keep in touch with those people who have made
financial or other contributions.
Get into networks
You need to know where to find out about funds and keep in touch with new
developments. That way, if a new pot of money comes up you'll be sure to hear
about it.
Whilst you do not want to be 'money-led' you do need to be able to exploit any
relevant funding sources as they appear.
Community Action organises a variety of networking events such as the Health and
Social Care & Self Help Forum’s, etc. Check our Reach Out e-bulletin for any update
or new policies.
Be realistic
You may think you really need 3 full-time workers, a purpose-built centre, and
£50,000 per year running expenses, but you are unlikely to get all of those
immediately. Nothing is more depressing than failure, so, within your strategy; make
sure your targets are realistic and achievable.
Go for small as well as large amounts of money. You may have to be prepared to
compromise - up to a point.
Do not get distracted and chase new pots of money that don't fit your overall aims
and strategy.
This is not to say you cannot be flexible if something comes along that looks relevant.
Set timescales and try to keep to them.
Review your plans
You should review your fundraising plans from time to time.
From your records you will be able to monitor progress and evaluate how successful
you have been.
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This evaluation will then inform your future fundraising strategies.
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Were you over-ambitious?
Do you need to revise your plans
Do you need to do more research into possible funders?
Do you need help or training in devising better budgets or writing better
applications?
Be imaginative, stay informed and stick to your agreed strategy and you will find that
fundraising isn't just a matter of good luck.
Useful books:
The Complete Fundraising Handbook by Sam Clarke and Michael Norton.
The Complete Guide to Business and Strategic Planning by Alan Lawrie.
Image Building and Money Raising for Hard to Sell Groups by Yasmin Prabhudas.
All published by the Directory of Social Change
24 Stephenson Way
London NW1 2DP
Tel: 020 7391 4800
Email: [email protected]
Community Action, 4 Charnwood Street, Derby DE1 2GT
Tel: (01332) 342722 Fax (01332) 205069
E-mail [email protected]
Website www.communityactionderby.org.uk
Updated April 2010