When I ask nonprofit professionals why they got into this work, the answers are almost always deeply personal. I hear stories of transformative volunteer experiences or pivotal moments that sparked a deep-seated drive to help others. These stories are about compassion, service, and making a difference.
Do you want to know what I DON’T hear when I ask this question? I never hear about the allure of fundraising strategy.
For many nonprofit professionals, fundraising begins as a way to support the real work they care about—providing the revenue to fund staff and resources for programs. Most executive directors learn fundraising on the job without formal training. This leads to a lack of confidence and enjoyment in the process. Viewed through this lens, fundraising might even be viewed as a necessary evil instead of a beautiful way of inspiring others to be a part of your mission. In other words, it’s stressful.
However, fundraising is a skill you can learn, and the better you get at it, the more fulfilling it becomes. There’s real satisfaction in inspiring others to support your work. That’s why developing effective fundraising strategies can be rewarding. For starters, they work, generating the revenue that pays the bills and even expands the work you do. They reduce the stress involved in hitting a fundraising goal. And they might even spark joy. (Yep, I said it!)
A lack of strategy causes systemic issues, depletes resources, tanks morale, and makes everything harder. On the other hand, a thoughtful strategy enables you to hit your revenue goal, builds long-lasting relationships, and ignites passion for your mission. Maybe it’s not the typical nonprofit origin story, but I’ve seen people fall in love with fundraising because of what it accomplishes.
Whether fundraising is your passion or simply a tool to advance your nonprofit’s mission, this article will teach you everything you need to know about fundraising strategy. You’ll learn the basics of a fundraising strategy, the steps to create one, and real-world examples that showcase how strategy can drive successful results. You’ll gain exactly what you need to know to customize your fundraising strategies to fit your nonprofit’s needs.
Whether you are just starting, refining your existing plan, or attempting to reach a bold, new revenue goal, this guide will help you build a sustainable fundraising strategy that aligns your team, engages your board, and optimizes your donor relationships. Oh, and grow your revenue….let’s get strategizing!
What is a nonprofit fundraising strategy?
How do you develop a fundraising strategy for nonprofits?
9 steps to create your fundraising strategy
Fundraising strategy examples
What Is A Nonprofit Fundraising Strategy?
Think of fundraising like cultivating a thriving garden. You don’t toss seeds in the soil and hope for the best. You learn what to plant, where to plant, and how to give each plant the sun exposure they need. Then, you pair your plant knowledge with the right tools, so you can mulch, fertilize, and prune as you go.
It requires consistent and thoughtful care to get the best results from every plant in your yard. And that’s what your fundraising strategy provides. Your strategy is the master plan that will improve your entire ecosystem.
A nonprofit fundraising strategy is NOT a magic potion that will sprout growth all at once. It’s a year-round playbook designed to generate sustainable, long-term growth. Even if we could bottle the viral potential of the 2014 ALS Ice Bucket Challenge into our next TikTok video or tap a board member’s cousin who was once a Hollywood-something to speak at our upcoming gala, these are short-term hits.
A nonprofit fundraising strategy is a roadmap that builds lasting success for your organization. Digital marketing campaigns and fundraising events are great, but only when they fit into the greater fundraising strategy puzzle that a seasoned fundraising expert knows how to solve.
What Are The Benefits Of A Nonprofit Fundraising Strategy?
Most nonprofits already know that a fundraising strategy will help them, well, raise funds. Still, you may not feel like you have the luxury of stepping back to assess your fundraising landscape. Alternatively, it may not seem worth the risk of un-doing the current workflow, adding new tasks, or learning new skills.
Change is hard, particularly in a resource-constrained environment. Totally valid. But my response to this hesitancy is simple: once you understand how a fundraising strategy can help you grow your revenue, you’ll see that the effort to implement it is absolutely worth it. Here are just some of the benefits of having the right fundraising strategy.
Team Unity And Focus
A well-developed fundraising strategy is a powerful tool that unites your staff, board, and even volunteers around a common goal. It tells you exactly what you will be doing (and won’t be doing) to grow your revenue.
This encourages total engagement and creates a sense of accountability because it defines everyone’s roles and what they must do to contribute to the organization’s overall success.
A strategy can be especially useful for engaging board members in fundraising, which is often a struggle for nonprofits. A committed and informed board that is grounded in your fundraising strategy can open doors to new donors and cultivate the relationships that will result in major gifts.
Better Donor Experiences
This article will emphasize the importance of building a better donor experience through stewardship because it’s crucial to your success.
Stewardship is about building a relationship between your donors and your organization and is the spark that ignites generosity around your mission. That’s why it’s a large part of any fundraising strategy.
‘Big Picture’ Perspective For Long-term Planning
“Building the plane while flying it” is an all-too-common saying in the nonprofit world. We laugh when we say it, but it’s the reality for nonprofits with limited resources.
This is why some of the nonprofits I work with are surprised when I start discussing using a multi-year fundraising plan to make their three-year strategic plan a reality.
But this is exactly what a fundraising strategy makes possible. It is your roadmap to stability, allowing you to build reserves, deepen your programs, or hire more staff. With a big-picture perspective, your organization can create a sustainable funding model that supports your mission for years.
Efficient Use Of Your Nonprofit Resources
Speaking of limited resources, your strategic fundraising plan will actually streamline your operations.
For example, if you’ve noticed that you’re not retaining your hard-earned new donors, you can develop a plan to enhance the new donor experience and increase engagement. You may engage your development committee to welcome each new donor, assign your marketing communications staff to create a welcome packet, or task your development staff with identifying five high-potential donors to take out to coffee.
All three of these efforts will result in a spectacular new donor experience. And your organization will invest its resources in retaining new donors instead of attracting new donors that fade away. You’ll see the most efficient use of your resources when everyone is marching in the same direction to achieve a strategic goal.
What Are The Fundraising Strategy Basics?
Many of my clients knock on our door ready to jump into the deep end of fundraising strategy development but realize they might need to back up a bit and invest in Donor Boom’s Fundraising Fundamentals package first. That’s because fundraising basics are the most important part of your strategy.
Even if you’re an experienced fundraiser, a quick refresh of the basics can clarify what you may intuitively know and help you align your team around the foundational skills of fundraising. So let’s jump in with a few basics.
Fundraising Cycle
The fundraising cycle, or the development cycle, is the framework around which every strategic fundraising plan is built. There are six phases to this continuous cycle. Become familiar with these phases to verify you’ve covered all the bases when creating your strategic fundraising plan.
Evaluate
The first step in the fundraising cycle is to evaluate your current position. This means assessing your organization’s needs, operating budget, financial goals, and the health and potential of your revenue streams. Most, if not all, of this information is stored in your donor data.
Identify
This step involves visualizing the types of donors who might give to your organization and their motivation for doing so. For example, a nonprofit that provides specialized training to public defenders may appeal to practicing attorneys, local firms, or the regional bar association.
Consider these donor types as individuals, corporate sponsors, or grant funders. Use your donor history as a starting point to create donor personas, and then think outside the box! What kinds of people who would resonate with your mission still need to be added to your database?
Qualify
Once you’ve identified prospective donors, it’s important to research their capacity and their interest in your mission. Believe it or not, a donor’s alignment with your mission is a better qualifier than financial capacity alone. You’re qualifying for “propensity” – when a donor has both the ability and the inclination to give – more than “capacity.” That’s your fundraising gold.
Begin your research by evaluating their interest level: review their engagement with your communications, charitable giving history, priorities, connections within your organization, and involvement in your sector or community.
Finally, assess their financial capacity. Use tools like online research, your donor database, wealth screening, and insights from board members, volunteers, or the prospects themselves.
Cultivation
This is getting to know prospective donors and familiarizing them with your organization. You should do this BEFORE asking for support.
Investing in this important relationship-building step dramatically increases your likelihood of fundraising success. It may involve hosting intimate events, giving tours of your facility, sharing impact stories, or sending personalized communications to build connections. Whatever you do, don’t skimp on this step.
Solicitation
Once you’ve cultivated a warm relationship, it’s time to ask for support. If you’re investing in all the phases above, solicitation should be a snap because you’ve primed your prospects for this moment!
And if you ask the right kinds of donors and understand why and how they are connected to your mission, why wouldn’t they want to support your organization? Invite them in!
Solicitation can take many forms, such as direct mail, digital campaigns, personalized email, or a face-to-face meeting. (And yes, a fundraising gala.) Take the time to segment prospective donors with similar characteristics and then tailor your ask. You don’t want to approach a longtime volunteer for a gift the same way as a first-time donor.
Stewardship
The first donation is only the beginning of a long, happy relationship with a donor. Stewardship involves three ingredients: personal acknowledgment, public recognition, and updates on the impact of their donation.
This includes thank-you letters, impact reports, recognition on your website, etc. And whatever you do, continue to engage them with the organization’s mission. Good stewardship is the key to donor retention and future growth.
Donor Stewardship Revisited
Donor stewardship is an important part of the fundraising cycle that merits revisiting. Donor stewardship is the key to donor retention and donation growth. It is a huge part of the donor experience.
So…what is donor stewardship? It’s about building relationships with your donors that foster trust, loyalty, relevance, donor advocacy, and emotional connection. See why stewardship is so important?
The best fundraising strategies for nonprofits are anchored in stewardship. That’s right. Not solicitation, but stewardship. Solicitation is the moment in time when you ask, while stewardship rewards you with long-term financial stability.
Get stewardship right, and engaged donors are more likely to increase their contributions, volunteer their time, advocate for your cause, and help attract new supporters.
Plus, if and when your nonprofit experiences darker days, it’s your long-time, well-stewarded donors who will come through for you. A 2022 study found that loyal donors are twice as likely to increase their donations year-over-year compared to passive donors, and the average loyal donor can be expected to give 4x the donation amount of a passive donor (Classy).
And good news– everyone in your organization can get excited about playing a role in thanking, recognizing, and informing your donors about your organization’s impact. Make sure that your strategic fundraising plan carves out stewardship roles for everyone. More on stewardship later!
How Do You Develop A Fundraising Strategy For Nonprofits?
So now that you know the basics of the fundraising cycle and you’re convinced of the benefits of developing a fundraising strategy for your nonprofit, let’s talk about how to develop this strategy.
What Should You Have In Place Before Developing Your Fundraising Strategy?
Have you ever started cooking a recipe without verifying that you have all the ingredients in the house? Trust me, there is no glory in sprinting through a grocery store in a sauce-covered outfit.
Preparation for any task is key, and fundraising is no different. Here’s what you need to do before you create your fundraising strategy.
Strategic Focus
Having a clear focus is the foundation of any successful fundraising strategy. This focus comes from a three-year strategic plan or, at a minimum, a clearly articulated set of your nonprofit’s programs and services. This plan should answer the question: if you want to raise more money, how will you put these funds to work?
This gives your fundraising clarity of purpose. Whether raising money to support your general operations, a specific program, or a capital campaign, a strategic focus allows you to craft a strong case for support that will inspire donors to give.
Plus, this strategic focus provides your team with momentum to navigate the transition while implementing your new strategy. That can be uncomfortable, so don’t underestimate the value of strategic focus before laying out plans for a new fundraising strategy!
An Enthusiastic Team
An enthusiastic team is essential for the success of your fundraising efforts. This team includes not only your staff but also your board members and volunteers. Of course, nonprofits have an advantage as a sector. You are mission-driven. When your team internalizes the connection between your mission and the revenue that fuels it – your fundraising – it creates a contagious energy that donors can feel.
Board members, as mentioned earlier, play a big role in your fundraising strategy. They bring connections, insights, and influence that can open doors to major gifts and sponsorships.
Engaging your Board’s development committee in the fundraising strategy builds a collective sense of ownership. It’s this enthusiastic team, paired with a great plan, that increases the likelihood of reaching your goal.
Case for Support
Your case for support anchors your fundraising strategy. It’s so important to every aspect of fundraising that I require my nonprofit clients to have one before we jump into fundraising strategy.
Why do you need a strong case for support before developing your strategic fundraising plan?
A case for support is the clearest, most persuasive case you make to donors as to why your nonprofit deserves support. This document identifies the problem your nonprofit is tackling, explains how your programs are well-positioned to solve it, details how a donor’s funds will be invested in the mission, and invites donors to give. It is an essential tool in establishing trust and transparency with your prospective donors.
It also standardizes the language your nonprofit uses to explain your purpose across all mediums. The language you craft here will be used everywhere in all your communications. It’s worth taking the time to prepare it with care.
Data
Data is a powerful tool for developing and refining your nonprofit’s fundraising strategy. Accurate and up-to-date donor data is the basis for quality analysis that allows you to make data-informed decisions, recognize donor patterns, and identify growth opportunities that can shape your fundraising efforts.
You can track key performance indicators such as donor retention rates, average gift size, and conversion rates. Good data enables you to segment your donor base by donor history and engagement, which translates into great behavioral insights. If you’re doing the donor data analysis right, your fundraising strategy practically writes itself. It’s all right there in the data.
One of my favorite things about donor data is that, whether or not you’re using it to its full potential, you likely have everything you need to create your strategic fundraising plan at your fingertips! So make sure you take the time to clean up your database so it is as accurate as possible. Flawed data will undermine your entire fundraising plan.
Website That Is Optimized For Fundraising
Your website is the hardest-working fundraiser in your organization. It must inspire a donor’s trust, financial transparency, and confidence in your nonprofit. It needs to align with your case for support. It needs to inspire generosity and make donating as easy as possible.
This means having a user-friendly design that makes it easy for visitors to navigate and find information about who you are, why they should give, and how to give. That includes:
a well-placed “Donate” button clearly visible on every page
a simple and streamlined donation process
as few clicks as possible to complete a transaction
It doesn’t need to be fancy but should illustrate the real-world difference your nonprofit is making.
Fundraising Expertise
Expert guidance from a fundraising consultant can provide your nonprofit with the specialized knowledge and skills necessary to create and implement a successful fundraising strategy.
Investing in external resources can also free up your staff to focus on mission-critical tasks, keeping things moving smoothly while you improve your fundraising.
Do your research and find someone you feel confident in. Whether you choose Donor Boom or another firm in your network, make sure your fundraising consultant is committed to building your team’s internal capacity, helping you become more effective, confident fundraisers of your own.
Becoming a fantastic fundraiser is why you’re reading this article, isn’t it? Well, your external consultant should be a key part of that journey.
What Are The Various Types Of Nonprofit Fundraising Strategies?
There are so many different types of strategies that can improve your fundraising, each of which is designed to target specific goals. Your ideal strategic fundraising plan will likely combine nonprofit fundraising strategies that work together. Let’s dive into the different types of fundraising strategies for nonprofits and how they work.
Donor Retention
Donor retention is one of the most important parts of a fundraising strategy, now more than ever. In its Q1 2024 report, the AFP’s Fundraising Effectiveness Project reported a year-over-year decrease in donor numbers, with a -3.0% decline in the last quarter alone (afpglobal).
Simply put, if you can’t retain your donors, you can’t grow your revenue. If existing donors are disappearing as fast as new donors are arriving, it will show up in your total revenue numbers. Poor donor retention is why nonprofits struggle with flat or even negative growth.
Donor retention is even more important than attracting new donors. Why? It costs 5-10 times more to attract a new donor than to retain a current one.
Think of the resources you pour into marketing, outreach, and staff time to attract new donors. Now, think of the lower ongoing costs associated with maintaining relationships with existing ones. Retention is not just an easy choice; it’s also an effective choice. Loyal donors tend to give more over time.
Donor retention strategies include regular communication, personalized outreach, and a year-round campaign that shows donors how their contributions are being put to use and making a difference. Stewardship is essential: consistent follow-ups, thank-you notes, and two-way conversations build relationships.
And personalization makes a huge difference. Research from Campaign Monitor revealed that fundraisers who segmented email recipients and personalized messaging saw a 760% increase in revenue compared to those who didn’t utilize segmentation or personalization (neonone).
A well-executed donor retention plan can increase lifetime donor value, ensuring that supporters continue to give year after year. Plus, loyal donors are more likely to become advocates for your mission, bringing in new donors and spreading the word. By prioritizing donor retention, you build a stable foundation for your nonprofit’s long-term financial health.
Major Donors
Growing your Major donors involves concerted resources because they can, and often do, have the biggest impact on your revenue. It is highly likely that 20% of your donors (or less) contribute 80% (or more!) of your fundraising revenue. That’s why a major donor effort is always a core fundraising strategy for nonprofits.
These donors also represent your most loyal, stable base. These donors are no more or less important than any other donors – we celebrate every donor! – but making sure that you’ve secured the loyalty of your base provides your organization with stability. THEN, you can turn towards developing new donors, modest monthly donors, and the like. Combine this all together, and you’ll see big revenue growth!
Identifying, cultivating, and stewarding major donors requires a dedicated and personalized approach. Think one-on-one meetings, intimate events, and communications tailored to each donor’s connection to your mission. It’s ideal to involve your board members in this stage.
Putting a year-round stewarding campaign in place for these donors ensures long-term support, which will help your organization weather the ever-changing economic environment…and perhaps one day, be essential to a future capital campaign or large-scale initiative.
New Donors
Nonprofits should always hang the welcome sign for new donors, especially with great donor retention and stewardship plans in place.
To attract new donors, your nonprofit needs to present a compelling case for support, have a functional website that inspires generosity, and build trust by being transparent about how contributions are used.
New donor acquisition involves outreach, and you’ve got a lot of options – social media campaigns, email marketing, live or virtual events, and partnership programs to name a few. This is another opportunity to engage your board by asking them to host intimate gatherings of friends or filling a table with new faces at your gala.
Follow-up is a critical part of new donor acquisition. Once a new donor makes a gift, it’s essential to begin the stewardship process immediately. This can include a timely thank-you note, an introductory call from a staff or board member, or a welcome packet that comprehensively explains your mission.
Trust me, this extra bit of work does a lot in the long run. The average retention rate for first-time donors is 19% but increases to 38% if the donor receives a handwritten thank-you note within 48 hours (donorperfect).
Engaging new donors early on increases the likelihood that they will continue to support your cause in the future. A solid fundraising strategy can help you create this content, plan your execution of outreach, and even automate the process.
Volunteer Engagement
A 2020 report found that 85% of volunteers donate to the nonprofits they volunteer for (Global Trends in Giving). Your highest potential donor segment is right under your nose!
Volunteers know your mission well because they are part of making it happen. They also trust your organization and likely have deep connections to the people inside your nonprofit organization whose values they share.
However, these prospective donors require a VIP approach, so they need a tailored fundraising strategy specifically designed for them. They are already giving you their most valuable resource – their time – which you must acknowledge frequently throughout the year. Once that is established, you can take a personalized approach to soliciting them for a donation.
Because volunteer engagement is a great fundraising strategy to familiarize prospective donors with your mission, create with intention various on-ramp opportunities for prospectives to volunteer. You can enlist them for one-time gigs like day-off event support, volunteer at your clinic’s welcome desk, and engage their professional skills either ongoing or as part of a task force to tackle a specific issue.
And don’t forget advisory board opportunities. These are your future board members, all of whom are also volunteers!
Want more ideas on approaching your volunteers for donations? Watch this video.
By providing meaningful opportunities for volunteers to get closer to your mission, you create a pipeline for deeper engagement and financial support. But don’t forget, first and foremost, to recognize and appreciate these people as your volunteers who give you their precious time. That’s great stewardship – see, we’re talking about how important stewardship is again!
Sponsorship
Sponsorships from local businesses or large corporations provide a terrific fundraising opportunity for nonprofits. Corporate sponsors can offer financial support, in-kind donations, or media exposure that helps your nonprofit reach a broader audience.
It takes some thoughtful planning to find a strong sponsorship. First, think of companies whose values align with your mission. For example, a local garden store that might support your environmental nonprofit or a women-led fintech firm that might support your domestic abuse prevention organization. Use your board’s connections to create a list of potential sponsors.
Next, demonstrate how partnering with your nonprofit increases its visibility and reputation, benefiting your brand, employee retention, and recruiting. Show them how this will be a mutually beneficial partnership because sponsorships are altruistically oriented transactions rather than purely philanthropic. You have to demonstrate how they will benefit too.
How do you demonstrate this value? That’s where the strategy comes in. Your sponsorship strategy will likely include a benefits grid that offers transactional value (brand exposure, for example) that appeals to corporate sponsors. This can include prominent logo placement at events, ongoing recognition in your marketing materials, or the opportunity for employees to engage in volunteer activities.
Board Activation
70% of nonprofits cite board involvement in fundraising as a significant challenge (Donorbox). However, if you can bring board members into the process in a way they enjoy and feel productive, they can become one of your biggest assets.
So how do you bring your board members on board? Here are a few of my go-to suggestions:
Give board members specific tasks AND the tools required to complete the task. Focus their time and energy.
Connect board members with donors so they can talk about their passion for your mission and values.
Start board members on stewardship rather than solicitation.
Your board members bring a wealth of resources, expertise, and networks that can enhance your nonprofit’s efforts.
Fundraising Events
Fundraising events! These events typically require an enormous amount of focus and resources from your team, which can dampen your ROI. That’s why, when planning your next fundraising event, think about it as a cultivation-solicitation-stewardship event instead. Check all the boxes.
Events enable you to meet donors in person, so engage donors, teach them about your mission, deepen their connection by introducing them around, and for goodness sake, thank them. AND also raise significant funds in a single day or evening.
Events are also a great way to recognize existing donors in special ways and attract new supporters. After the event, following up with attendees to thank them and provide updates on the impact of their contribution is critical for retaining their support in the future.
Events can range from galas to community 5ks to a panel of experts at a cocktail hour. Successful events require careful planning, from securing sponsors to organizing logistics and promoting the event through various channels.
This pays out when your events offer opportunities for donors to connect with your cause on a personal level, often resulting in larger donations and long-term support.
Our fundraising event doesn’t need to be a cocktail hour or gala. It can be anything, as long as it fits with your mission. For example, here’s some info on how and why to make your fundraising events family-friendly.
Employer Matching
Employer matching programs are a highly effective way to double the impact of individual donations. It must have a fundraising strategy to support it to have a material impact on your revenue.
A 2024 report found that 11% of total corporate cash contributions to nonprofits are made through matching gift programs, for an estimated average of $2.86 billion donated each year (doublethedonation). That’s some serious revenue, and you want some of it to your nonprofit.
However, this option can be more elusive than others because it requires a donor to take extra steps to secure this benefit for your nonprofit. An additional $4 – $7 billion in matching gift funds is estimated to go unclaimed yearly (doublethedonation).
Building awareness is a key part of this fundraising strategy. Your first step is to encourage your donors to check if their employer offers such a program before, during, and after their donation.
Don’t stop there. Use your donor data history to identify who is already using this benefit, then reach out to each donor personally to ask them to use this benefit on your behalf again. You can also identify which donors work at nearby companies with an established matching program (which you can look up on Double the Donation) and then ask the donors to use this resource.
Most people do not have this employee benefit top of mind. It is your job to make it top of mind, and make your organization the grateful recipient. One of our clients generates 15% of their revenue from matching donations because they have a best-in-class fundraising strategy that they consistently execute.
Building a targeted matching gift fundraising strategy can lead to a substantial revenue increase with a low conversion cost. Make this one a priority if you’re looking for growth.
Monthly Donations
Monthly donations are among the most impactful ways your donors can contribute to a nonprofit's sustainability.
By signing up for a recurring gift, donors provide a steady, predictable income stream that allows nonprofits to plan and allocate resources more efficiently. This reliable funding helps organizations focus more on delivering services and less on constant fundraising efforts.
For donors, monthly giving offers an easy and budget-friendly way to make a difference. A smaller donation given consistently over time can often have a bigger impact than one-time gifts. Donor Direct says, “While any of their donations might not be a substantial amount, over time, the amount of money they donated can add up. A donor that makes a $25 donation four times a year for six years is just as important as someone who provides a $600 one-time donation.”
Many donors also appreciate the convenience of automatic contributions, enabling them to support the cause they care about with minimal effort consistently. Speaking of convenience, setting up monthly donations is a fairly easy task on your end! You must mention it on your website and provide this option on your donation transaction page.
Of course, there are additional ways to incentivize monthly donations. You can offer special benefits, such as exclusive updates, invitations to special events, or personalized messages from the people impacted by the donations. All of this you can decide in your fundraising strategy.
Asset-based Contributions
Asset-based contributions are a high growth-potential way for your nonprofit to enlist support from your donors beyond cash-based donations. What is an asset-based donation? It is a gift of stock, a required minimum distribution (RMD) from an IRA, or a donation from a donor-advised fund (DAF). (It also includes real estate, artwork, and other valuable assets, but those are complicated transactions that we will set aside here.)
Why should you build a fundraising strategy to attract asset-based contributions? The first reason is that donating assets offers extra tax benefits compared to donating by credit card. And that helps inspire generosity from your donors.
Many donors aren’t aware of this option or aren’t taking a moment to consider it when they are at your donation transaction page, ready to give. Pay more taxes or donate more to a nonprofit you love? Donors would joyfully prefer to give to your organization!
The second reason is that when you ask for an asset-based donation, you’re asking a donor to donate from a much larger pool of funds, their wealth. This contrasts with a credit card-based donation from a smaller pool of funds, the monthly budget.
Professor Russell James at Texas Tech University has done conclusive research on how much more generous donors are when donating assets. According to Professor James, “Less than 3% of household wealth is held in cash or checking accounts!” In his five-year 990 study from 2010-2015, he concluded that nonprofits exclusively receiving cash donations grew 11% while nonprofits receiving any asset-based donations grew 50%. These findings should make you sit up straight and get on this fundraising strategy pronto.
That’s why seeking asset-based gifts should be a core fundraising strategy for nonprofits. Ensure your website features clear instructions that enable donors to make this kind of donation and provide a way for donors to notify you so you can follow up.
By accepting asset-based contributions, your nonprofit puts itself in a better position to receive larger gifts than would be possible through cash-based donations alone.
Earned Revenue
Earned revenue provides a diversified and often more sustainable source of income. If you can identify ways to generate earned revenue while advancing your mission, we highly recommend this as a fundraising strategy for nonprofits.
Earned revenue might seem paradoxical at first, but many precedents exist in the nonprofit sector. For example, a museum charges admission fees and features an annual membership.
One of our clients charges a modest fee for the hot meals they prepare to be distributed through their foodbank partners to ensure that the food makes it into people’s homes and does not go to waste. Another one of our clients offers fee-based leadership training that aligns with their core work.
Earned revenue is an increasingly popular strategy for nonprofits to generate funds through activities related to their mission. This can include membership fees, fees for services, licensing fees, and even product sales. You might find that your clients value your services even more if they have to pay a modest amount.
By diversifying your revenue streams, you create a more stable financial foundation and deepen engagement with your supporters by offering them additional value through services or experiences. The key to success with earned revenue is ensuring that these activities complement your mission and provide a reliable, ongoing source of funds.
9 Steps To Create Your Fundraising Strategy
It’s possible that you skimmed the earlier part of this article to get to this section. Understandable- you want to know what it takes to create a fundraising strategy! Well, I want to share some of Donor Boom’s services that will set you up to accomplish these steps. You can also use it as a DIY Guide. It’s a win-win.
Build Up Your Fundraising Basics
Step one is to return to fundraising basics, which we reviewed earlier in this article. Understanding the Fundraising Cycle and core ideas of donor stewardship are going to support your entire strategy. Take the time to update your infrastructure, refresh your knowledge, and ensure your team is on the same page.
The ‘basics,’ to refresh your memory, should include a strong Case for Support, a fundraising-optimized website, and high-quality data.
By returning to the basics, we helped quadruple the fundraising revenue of a nonprofit client who had had limited success with fundraising. It turned out that, although this organization was well-known in their area, many people didn’t quite realize they were a 501(c)(3) nonprofit.
We went back to the basics and built their case for support, underlining their value to the community and their need for donor support. They also had members paying modest fees who had never been approached specifically to donate. As members, these were their most mission-engaged individuals, and their data allowed us to segment this group and begin talking to them as such.
All this to say, the basics matter.
Assess Your Current Fundraising Donor Behavior
To create a fundraising strategy that gets donors to give generously and more consistently, assess your current donors’ behaviors first. The great news is that the key to understanding your donors’ behavior is hidden in plain sight in your donor database.
Assuming you have clean data in your database, you must pull reports and then analyze that information. We recommend reviewing the last three years of giving because it gives you the context to spot trends and insights. Pull one year’s worth of data to analyze and you really don’t know if these metrics are good, bad, or ugly if you don’t compare them to the prior year.
Then, list your burning donor behavior questions and identify the key performance indicators (KPIs) that will provide you with answers. Donor Boom has built a proprietary model that helps us tell our clients their donor behavior story through data. We modify the model depending on what questions need answers. You may need to ask questions like:
Who are our best donors?
What percentage of our volunteers donate?
How many new donors do we attract annually and does this change over time?
Why isn’t our revenue growing? Where are we underperforming?
We run a donor data analysis every year for numerous clients. It is remarkable how sharp their fundraising strategies are at seizing growth opportunities now that they can identify and track them using data. It’s also a motivating way to prove that fundraising strategies for nonprofits work!
Forecast Your Fundraising Goals
Once you’ve assessed your current donor behavior, the next step is setting realistic fundraising goals. Setting reasonable goals that are grounded in data is important for team morale and critical to the budget planning process. However, setting these goals can be tricky.
If you approach this task by adding 5% to last year’s revenue, you risk not aiming high enough and miss out on the chance to implement the proper fundraising strategies. Alternatively, if your revenue has been declining, simply adding 5% to your topline might set your development team up for failure. Forecasting your fundraising goals is a more precise way to set your fundraising goals and paves the way for the best fundraising strategies for nonprofits.
Watch this video for a step-by-step guide to forecasting.
Forecasting involves the donor data you’ve already pulled to analyze your donor behavior. Your donor history gives you a starting point for setting a desirable gift size. Then you apply your familiarity with donors to assign a probability of them donating at that level again. The process of forecasting highlights what needs to be done to improve the probability of giving. And that’s why forecasting improves your outcomes.
Forecasting will give you a conservative, target, and stretch goal, producing a healthy range. Then, the enthusiasm level of your hardworking team can execute the fundraising strategies and drive your results upward. A range can be far more motivating than just a number!
Forecasting is not so straightforward for newcomers to the concept, but it makes a huge impact. That is why I host webinars and create learning resources on the topic.
Even if you are CFRE certified, you may have limited exposure to both analytics and forecasting. That may be why our last Association for Fundraising Professionals webinar on the topic was the highest performer of the year. We encourage you to hone these skills and contact Donor Boom’s resources for more assistance.
Develop Your Fundraising Strategy
This is the heart of the process, but if you’ve already done everything we’ve recommended above, you know exactly what needs to be in your plan. A good fundraising strategy for nonprofits highlights the initiatives that will drive the most growth that your organization can implement well. That’s how you get the strongest ROI.
It is not an exhaustive list, but rather select methods and tactics tailored to help you reach your goals based on insights from your donor data. It will likely include a mix of individual giving, major gifts, events, and corporate partnerships. Alternatively, you might continue all your previous fundraising efforts and add strategic focus to the one area that can have the biggest impact.
I’m thinking of the incredible results we got for a client by just focusing on converting their volunteers to donors. And another client who went all in on corporate sponsorship and built a broad plan to make it happen….and they did!
Your strategic fundraising plan should also include roles and a timeline of campaign activities (being attentive to all six phases of the fundraising cycle) and identify all your donor segments, your core personas, and their motivations. Clarify the resources and budget you’ll need to accomplish your plan.
Cite the key findings from your preparation work (see basics above), which will help persuade your stakeholders – your staff and your board – of the soundness of your plan. Those same stakeholders will ultimately help you implement your plan, so be aware of this audience.
If you’re just not fully resourced internally or don’t have the fundraising expertise, consider hiring a fundraising consultant who knows all the best fundraising strategies for nonprofits to help refine your strategy and maximize your potential for success.
Share Your Fundraising Strategy With Your Board
Your board plays a critical role in the success of your fundraising strategy, and it’s essential to get their buy-in early in the process. Present your strategy to the board, clearly outlining the goals, tactics, and their role in achieving success.
As mentioned above, we highly recommend you share your data findings and implications before presenting your plan. Everyone needs a shared understanding of your fundraising health to align on strategies that will capture the biggest growth opportunities.
Board members can provide valuable feedback, offer connections to potential donors, and help open doors for corporate partnerships. Lean into your board’s development committee for these specifics. Engaging the board in this way strengthens your strategy and fosters a sense of shared responsibility for fundraising outcomes.
Presenting the strategic fundraising plan is also a great way to spark excitement and align everyone around new initiatives. An enthusiastic, committed team is one of the crucial ingredients you need (see Basics above) for fundraising success.
Watch your board members’ faces light up when you present them with your strategic fundraising plan and the data to support it. They want your organization to succeed and want to be useful. That’s why they are volunteering their valuable time. Your strategic fundraising plan will check both these boxes. And you’ll have their gratitude for leading your organization to fundraising success.
Implement Your Fundraising Strategy
Once your strategy is finalized and your board is on board, it’s time to put your plan into action.
Confirm your team is clear on their roles and responsibilities to ensure smooth execution. Whether you’re running a solicitation campaign or fortifying your donor stewardship efforts, the implementation phase is where all the planning pays off.
Your board’s development committee is a key implementation resource. Their priorities should be 100% aligned with the plan so that your team gets the support they need throughout the year.
You may also be recruiting non-board members to be a part of the steering committee of your next event and broadening the responsibilities of your staff. It’s all hands on deck during implementation time.
Take another look at your timeline of activities as well. Load-balancing the year with development activities will improve your implementation outcomes. For example, the last two months of the year are not ideal for the board to hold their staff-supported board retreat. It's a critical time to be focused on solicitation efforts. The same holds true for your gala… make sure it’s at a different time of year than #GivingTuesday.
Create A Marketing Plan For Your Fundraising Strategy
You have a brand new strategy…the world should know about it! A comprehensive fundraising strategy needs a strong marketing plan to promote your initiatives and engage donors.
Your email campaigns, social media outreach, direct mail, website updates, and public relations efforts should be 100% aligned with your fundraising strategies.
Additionally, confirm your marketing team is actively using your case for support in execution. Their top job is to create consistency of message and lifting sentences and whole paragraphs from your case for support will enable them to do that across mediums.
They should also know how to leverage your database to pull the right donor segments to receive targeting messaging aligned with your plan. The more effectively you can align yourself with your marketing team, the more successful your fundraising efforts will be.
Incorporate Donor Stewardship Into Your Fundraising Strategy
There’s our favorite term again! The strongest fundraising strategies for nonprofits lead with stewardship. While this word gets a lot of playtime inside the nonprofit sector, it isn’t necessarily part of our daily language.
Stewardship is taking care of someone, and it is also taking care of your mission. You can see why, as I’ve made my case throughout this article, stewardship should be an integral part of your fundraising strategy.
Remember the three ingredients – personal gratitude, public recognition, and ongoing demonstration of impact (a.k.a how you put their gift to work). Your plan should address how your organization will address these three efforts with as much rigor and detail as your end-of-year solicitation campaign or the logistics behind your gala event.
You have automated tools in your fundraising platform that can support stewardship that can then be paired with a more personal touch. Every aspect of your donor stewardship plan should be warm, sincere, and mission-centered.
We here at Donor Boom are big fans of donor celebration events. They are not solicitation events but rather an annual gathering of your most loyal supporters to mingle and collectively celebrate what they have helped your organization accomplish. However, you’d be surprised how many donors finish the night by saying, “What an inspiring evening. I’d like to give you a check!” Our executive director clients tell us this is their favorite day of the year. Why? They are surrounded by all the people who believe in the mission as much as they do.
There is nothing more exciting than inspiring others to support your mission....and having them respond to you with their belief in the work you're doing. That's fundraising.
Monitor And Adjust Your Fundraising Strategy As Needed
Fundraising is dynamic, and your strategy may need adjustments as circumstances – budget, the economy, staffing – change. That’s why you need to monitor your progress regularly using your KPIs.
Set up a dashboard that tracks your progress monthly and discuss it with your development board committee, marketing team, and development staff to assess performance and make adjustments.
Stay informed and be flexible. The ‘hope and pray’ strategy doesn’t work nearly as well as smart fundraising strategies. Be willing to make adjustments to optimize results. If you find certain aspects of your strategy aren’t working as expected, consider hiring a fundraising consultant to help fine-tune your approach.
Plan to review your strategic fundraising plan annually. From year to year, you’ll need to make adjustments—sometimes tweaks, other times complete overhauls. Let your data play a lead role in determining your next moves. We recommend an annual donor data analysis to keep your fundraising strategies sharp.
What Is A Fundraising Strategy Example?
You’ve now explored every part of the process to create a solid fundraising strategy. Sometimes, it helps to see it in action. So here are a few examples of fundraising strategies:
Fundraising Strategy Case Study #1
An animal rights organization had few major donors and needed a fundraising strategy to attract more.
Problem
This nonprofit had many donors and prospects in its database, giving modest amounts. However, the organization needed major donors. They just didn’t know where to apply their resources to find and cultivate them.
Strategy
Donor Boom recommended creating a Leadership Circle for major donors. Using donor data, they set a realistic giving level to establish the Circle.
The nonprofit then heavily promoted the program, which included a donor celebration event and special recognition, allowing individuals from their extensive database to self-identify as major donors.
Results
Once donors learned about the opportunity, many increased their financial support. They also became more involved in creating financial stability for this nonprofit. Every aspect of this organization has thrived! This new Leadership Circle has been a motivating source of inspiration for the staff and board alike.
Fundraising Strategy Case Study #2
An environmental organization relied heavily on corporate sponsorships from a few key businesses but noticed their revenue fluctuated wildly with the local economy, leaving their operating budget vulnerable.
Problem
The organization’s founder, who also served as executive director, relied on her personal network for most business sponsors. She was shouldering the responsibility of all the connections and had exhausted her resources.
Strategy
Donor Boom recommended strategically expanding the nonprofit’s board with industry veterans while setting clear expectations that they would introduce the nonprofit to new prospective corporate sponsors.
This approach worked so well that the organization hired an executive director who could engage the nonprofit’s expansive advisory board, build deeper relationships, and enlist their help.
Results
Within the executive director’s first 90 days, the nonprofit secured a $500,000 corporate sponsor and capitalized on numerous opportunities to network and build relationships with prospective corporate partners. Their latest operating budget is more ambitious, enabling them to expand their program offerings and reach.
Create Your Fundraising Strategy Today
The best fundraising strategies for nonprofits drive your nonprofit’s revenue and create financial sustainability.
You now understand the fundraising strategy basics and are familiar with the importance of donor stewardship, board engagement, and using your data to create a roadmap that meets your immediate fundraising needs and supports your long-term vision.
Ready to take the next step? Contact Donor Boom today to learn more about our fundraising strategy package and discover how we can help you achieve your fundraising goals.
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