Fundraising: The process of securing the financial resources necessary for achieving the organization's mission.
Did you know that your board has a legal responsibility to come up with a plan for raising money for your nonprofit?
A common question I get from nonprofit founders is How do I get my board involved in helping my organization raise money?
When I am asked this question, I begin by reminding the founder that the board member is legally responsible for doing this. As a caretaker of the nonprofit's mission, it's up to the board to make sure there is enough money to provide successful programs and services.
If a board is not successfully doing this, it's usually because the members don't know where to start. If that's the case for your board, then I have a framework I'd like to share so that your members can feel more empowered when it comes to your organization's finances.
In general, there are 3 steps that your board should take in ensuring your nonprofit makes enough money to achieve its mission:
- Formulate a fundraising plan
- Evaluate the fundraising plan to determine its effectiveness (i.e., is the plan allowing the nonprofit to meet its targets?)
- Set the tone for fundraising by making a donation and soliciting donations (In fact, this is a 'must' for any nonprofit that desires to secure grant funding. If the members of a board aren't willing to give money to an organization, a grant foundation is less likely to believe that the nonprofit's mission is a good one).
So how does a board formulate a fundraising plan?
First, it's important to understand the nonprofit's financial needs for the year. How much money does your organization need in 2017 to achieve its objectives?
If your nonprofit is new this can be hard to do, so think in a "ballpark" sense. Roughly, how much do you sense your organization needs to do what it needs to do? If a year feels too long, think through the next 6 months and ask yourself:
- What do I want to proudly say that my nonprofit has achieved in 6 months?
- How much money does the nonprofit need to make it happen?
Once you have your number, immediately let your board know what this number is. They can then get to work on developing a fundraising plan. They can do this by acting on the following questions:
1. How much money is needed, and when does the nonprofit need it by?
The first step your board should take is to formalize exactly how much the nonprofit needs, and when it needs the funds by. Th entire board should agree to a timeframe so that everyone involved in fundraising is working towards the same objective.
2. Where will the funding come from?
Once the funding goal and timeline are set, the board can then focus on where the money should come from. In thinking through this, the board should consider the following fundraising sources:
- donations from the public
- fundraisers (e.g., galas, walkathons, etc.)
- public campaigns (e.g., Go Fund Me, Facebook campaigns, etc.)
- major donors (e.g., legacy gifts, inheritances, etc.)
- board member donations
- government (e.g., grants, contracts)
- foundation grants
- corporate sponsors and donors
- for profit activities
In thinking through these various sources, your board should come up with targets for each specific group. In other words: How much money should the nonprofit raise from the general public? How much should it raise from corporate donors? And so on.
3. How should the nonprofit win funding from these various sources?
Once the targets within each funding group are clearly established, the board should develop a plan for how it will raise money from each group. For example, the board will answer the following questions:
- How should we best engage corporate sponsors?
- How should we solicit money from the general public (e.g., Should we launch a Go Fund Me campaign? Should we solicit donations on the street?)
4. Develop an evaluation mechanism
Once the plan for raising money within each channel is underway, the board should regularly evaluate the effectiveness of the plan. This is crucial as the last thing you or your board want is to come to your deadline and discover that you are very far away from your fundraising goal. As such, your board should regularly check in to determine if it is ahead of, on, or behind schedule. This will allow your board to tweak and improve the fundraising plan as time goes along.
I hope this framework helps your board get off to a productive start in raising money for your nonprofit in 2017! If you need any assistance, Bea and I are an email away!