‘If you don’t know where you are going you might wind up someplace else’
– Yogi Berra
As a charity your organisation will have a purpose and a direction. You will need income to deliver this effectively, and without a strategy to develop that income you will be constantly running just to catch up.
What is a Fundraising Strategy?
‘Everyone has a plan ‘till they get punched in the mouth’
• Mike Tyson
Basically, a fundraising strategy is a plan which sets out how you intend to fund your work – what you want to do, how you want to do it, with what resources and by when. It should grow out of your strategic and business plans.
Fundraising is about building relationships and developing a great case for support. The most cost effective fundraising is the proper management of your existing relationships.
These are the foundation of most fundraising;
They are straightforward to manage;
Provide a good return on investment;
Are low investment.
Businesses exist for profit, not philanthropy;
Less than 1% of top 100 businesses report any charitable giving;
Corporate fundraising can be really effective if you are prepared to consider other options than just financial donations – products, on pack promotion, resources, lending staff, employee fundraising, leadership, expert advice, financial support;
Use existing contacts, this is an area where trustees should be active developing their existing contacts.
Large amounts are often available;
Significant investment of time and resources required;
This is considered ‘restricted’ funding and will generally come with limitations;
It’s useful for core funding.
High Return on investment;
Trustees should be actively involved in this area of fundraising alongside CEO or Director;
Needs time and a carefully structured process – you can’t just jump straight in and ‘make the ask’;
This isn’t a short term solution;
The focus is on building relationships over time;
Can be tax efficient for donors.
Can be really useful at getting donors to buy in;
Can raise local profile and support;
Can create a tension and confusion with revenue income with multiple ‘asks’ being made;
Well managed it can increase long term revenue income.
High Profile Events:
Resource heavy, often with low returns;
Only effective if attendees are carefully targeted;
Always delegate to a committee.
Can attract new people to cause, but more often just people who are interested in event;
Donors expect support;
Potential to work if events are carefully planned and part of a wider strategy.
Volunteers often will prefer to support a specific activity and this can be restrictive;
It’s a popular form of fundraising;
Can be extremely time heavy with resources sucked into it, and a low return as a result.
Professionally designed sites/campaigns can be extremely effective;
Online and text donations;
A high web profile can bring more donations;
Need to invest to get it right, amateur websites are rarely effective;
New online crowdfunding platforms can be really successful but need careful planning and are not ‘easy wins’ requiring an investment of time.
Takes time to build effective database with useful accessible information;
High level of investment to do well;
This is a long term investment.
Lotteries and Raffles:
Still popular amongst charities but public are increasingly weary;
Can be resource heavy;
Can tap into new audiences;
Management can be contracted out – at a price.
Good potential for most charities;
Essential to invest in legacy marketing;
Long term investment – relationships need to be developed with potential donors over many years.
Can work really well for small charities with niche markets;
Careful planning required to avoid overstocking;
Tendency to stock with generic mass produced;
Think like a shop – who is your market, spend, stock levels, merchandising etc.
Good well thought through presentation and merchandising pays dividends.
Why Are You Fundraising?
Not as daft a question as you might think. If you can’t answer this question in a really compelling way, you’ll struggle to explain it to potential donors? You need to start with creating a case for support, why should someone give your cause money over and above something else? Think about:
What problem are you trying to solve?
How are you trying to solve it?
What are you doing that sets you apart, what’s your ‘unique selling point’?
The difference you want to make and what will happen if you fail?
When you can answer these questions you should be able to effectively describe your case for support in a simple, memorable, and emotional way. Make sure to remember to think about who your audience is, and don’t use jargon or acronyms.
Research, Research, Research
In a world where there is huge pressure on limited resources then you want to avoid having all your eggs in one basket. The best way to do this is by developing what’s called a ‘mixed portfolio’ so you’re not dependent on one income stream. We outlined the main fundraising methods above, each of these methods has pros and cons – resources, returns, professional input, time etc. and you’ll need to consider each carefully based on your museums needs and the resources you have available to you, It’s really important to be realistic, for example, planning a legacy strategy with returns on investment within a couple of years is likely to be unachievable.
It’s also important to do some naval gazing now – where’s your organisation at? Do you have the resources and skills to develop and deliver a fundraising strategy? Does your museum demonstrate best practice in all areas? Who is your competition? Are you fundraising ready? The best way to approach this is:
An external audit (STEEPLE) – Social, Technological, Economic, Environmental, Ethical, Legal and Political forces that influence your museum.
An internal audit – where have your successes and failures been in the past, governance & leadership, people, culture, policies & procedures, brand & reputation. Look at best practice guidance.
Competition – who are they, where are they, size etc.
Market – fundraising trends, new innovative ways of fundraising e.g. crowdfunding, fundraising that’s losing its shine e.g. sponsorship, legal, ethical and best practice guidance.
Pull all of this research together into a SWOT plan (Strengths Weaknesses Opportunities and Threats). Check that your analysis is based on evidence not assumptions, consider how important each factor is and which factors will most influence your plans.
Develop a Plan
Which methods of fundraising are you going to target and how? How are you going to reach these donors?
Make sure that your objectives are SMART – Specific Measurable Achievable Realistic Timely. Organisations often make the mistake of creating unrealistic goals that aren’t based on evidence, this can lead to demoralisation of staff, failed projects, and unsuccessful grant applications.
Ideally start close to home and map your potential donors. The trustees and senior management should be playing a major part in this process.
Consider direct and indirect costs
Fixed and variable costs
Your return on investment
Lifetime value of donor
Do you have a dedicated fundraising officer, unlikely in small organisations, so consider creating a committee or steering group?
Different audiences require different approaches. So for a trust or a foundation, you may need to explain how what you want meets their priorities and interests. For a major donor, you will have listened to what they have said and created a specific proposal that matches their needs and interests (that still meets your organisations goals). For a company, you will be able to explain how your proposal meets their CSR preferences. And for an individual, you need to address them personally.
Building successful long-term relationships takes time, resources and planning, so ensure you thank your donors effectively and genuinely, and keep the lines of communication open, for example, if you’ve not been in touch with a potential donor for a long time don’t start with a request for money. Similarly, don’t make all your communications about money, focus on engaging people and making them feel a sense of belonging.
On a practical level, make sure you are able to maintain and grow donor relationships by keeping an up to date database, this should include contact you’ve had and when, past donations etc.
Monitor and Evaluate
Constantly improve the effectiveness of your fundraising by monitoring and evaluating the success of projects.
Finally, why do plans fail:
The museum hasn’t created a strong case for support;
Strategy based on assumptions not facts;
Inappropriate fundraising methods chosen;
Unrealistic costs, timescales and returns;
Plan not followed through;
Weak risk assessment and controls;
Lack of buy in and support from trustees;
Plan does not follow best practice;
Lack of leadership.