Creating an annual fundraising plan is one of the most important parts of nonprofit strategy, management, and, of course, fundraising. But fundraising planning can also feel overwhelming, as there are many elements to consider—and many people counting on your success.
To make fundraising planning easier, in this article, we walk step-by-step through the process we’ve used to help hundreds of organizations develop realistic annual fundraising goals and successful strategies to achieve them.
We also include fundraising plan examples and further resources to make things easier.
What Is an Annual Fundraising Plan?
At its core, an annual fundraising plan includes two elements:
- Projections for your nonprofit’s annual revenue by income stream (more on that below, but in simple terms, think grants vs major donors vs annual appeals).
- The planned strategies and activities you will use to bring in the projected revenue for each income stream.
Creating realistic annual fundraising projections and plans is vital because they form the basis of your nonprofit’s annual budget.
From salaried staff members to the communities who rely on your services, many people are counting on your ability to accurately assess how much you can fundraise and from what sources.
It can feel high-pressure, but the good news is that successful fundraising planning is a data-based process. If you work from the data, as we explain below, you can develop accurate and achievable projections.
Step 1: Gather the Data Needed for Your Fundraising Plan
Your first step in fundraising planning is to gather current and historical data about your organization’s income. This includes:
- Budget vs actuals for revenue for the last three completed fiscal years. Note that your accounting software should provide information about your income by type, which is often referred to in fundraising planning as “income stream.” For example, common income streams include individual donations, foundation grants, corporate grants, board giving, special events, etc.
- Current year-to-date budget with actuals for revenue. This will come from your accounting software.
- Initial budget expense projections for the coming year. This will come from your leadership team, but program planning and fundraising planning often overlap in busy nonprofits. If your nonprofit has a strategic plan, this is a good place to start for a sense of fundraising needs for the coming year.
- List of donors who have made contributions over $5k in the last three years. Ideally, you want this in one report, sorted by donor, so you can see which donors are making consistent gifts year-over-year. It might also help you identify donors that were giving but have recently dropped off—and that you may be able to reactivate.
Step 2: Analyze Your Fundraising Data to Start Your Plan
Now that you’ve gathered all this fundraising data, it’s time to put it to use for your fundraising plan.
Your goal is to be able to compare projected and actual income by funding stream across fiscal years.
Start by plugging your data into a spreadsheet or other chart that shows each year’s projected income and actual income for each funding stream. Be sure to include data for the current fiscal year.
For formatting, we prefer to show multiple fiscal years in one Excel spreadsheet, with years across the top and income streams on the vertical axis. However, some clients prefer to view each year’s data in a separate chart. It’s about what is easiest for you and anyone else on your team to review and use.
If you’d like samples and templates for creating these charts, our webinar on how to create fundraising plans has field-tested examples.
Once your data is compiled, use the following questions to start building the groundwork for your fundraising plan:
- Which income streams are the largest? How many donors are in those income streams? For example, if you’re relying on two or three major gifts or grants for 70% of your budget, your organization is at high risk if one of those donors changes their priorities.
- Which income streams are most consistent year-over-year?
- Do you see trends in the data—such as event fundraising actuals consistently underperforming fundraising projections?
- Do any income streams have upward or downward trends? If so, it might be time to delve into your donor lists to find out why.
- If you’ve been managing fundraising at the organization, which income streams require the most time and effort from you and other staff or board members? How are those specific income streams performing?
Your goal with these questions is to arrive at initial revenue estimates by income stream for the upcoming year. You also want to identify fundraising risks and opportunities.
Step 3: Prepare Initial Fundraising Plan Projections
The initial revenue projections for your annual fundraising plan should flow naturally from the data you have gathered and analyzed. For example:
- If your annual fundraising gala has raised $50k net (after expenses) every year for the last three years, you could comfortably estimate that it should raise at least $50k net for the next year.
- If your year-end appeal fundraising total has increased by $2k per year in each of the last three years, your first estimate would be that this trend will continue.
This part of the process should feel simple. It gives you a firm foundation for the next step: refining your projections and backing them up with action planning.
Step 4: Refine Your Projections to Develop Your Strategy
Now it’s time to get into the details of your donor list and pipeline for each funding stream. This is where the list of donors over $5k comes in.
Going funding stream by funding stream, you should review donors for each funding stream to identify which ones are:
- Committed
- Likely to renew
- Have the potential to increase giving
- At risk of dropping off
Here’s an example of how to do this type of planning:
Let’s say that your organization has received $50k a year from a local foundation for the past several years. To plan for the year ahead, you might ask yourself:
- Do you have a multi-year funding commitment? If not, could you speak to the foundation about making a multi-year grant?
- Could the foundation increase its annual giving to your organization? You can get a sense of this by reading the foundation’s 990 tax forms and reviewing grant amounts to similar organizations.
- When was the last time you connected with your program officer? Have you heard any news that the foundation may be changing priorities?
Once you start to answer these sorts of questions for each significant donor or prospect, your fundraising strategy will begin to emerge.
For example, if you want to increase the foundation’s annual giving to, say, $75k, you will need a plan for communicating with your program officer, timing your ask, and articulating your organization’s needs, including what additional funding will help you accomplish.
These activities are the foundation of your annual fundraising plan.
Step 5: Craft Your Written Fundraising Plan
Fundraising plans can be formatted in many ways, depending on what works for you. Some people prefer a simple written document with charts, while others prefer multi-page spreadsheets with associated calendars.
Regardless of the form you choose, your written annual fundraising plan should include at least four elements:
- Revenue goals by funding stream, with at least the current year’s budget and actual revenue for context.
- Key strategies to hit your goals for each funding stream. This will be a summary of the donor-by-donor strategizing you did for each funding stream in the prior step.
- Calendar of major activities and events that need to occur, such as outreach to a major donor, organizing the annual fundraising gala, or adding a spring direct mail appeal.
- Identification of any capacity gaps that need to be filled in order to complete the planned activities. This is essential, as you don’t want an ambitious fundraising plan that you do not have the capacity to deliver on.
Bonus: 5 Tips to Find More Revenue in Your Fundraising Plan
Sometimes, once you’ve finished the full, data-informed draft of your fundraising plan, you realize there’s one glaring problem: you need to find more revenue.
Over the years, the Funding for Good team has led countless fundraising strategy conversations. In the process, we’ve discovered a few go-to tips to find more money in your annual fundraising planning process.
For example, one of our team members led fundraising at a nonprofit that increased its operating budget by nearly $1 million every year for five straight years. But thanks to smart fundraising planning—along with a lot of hard work—the organization met that ambitious goal year after year.
Here are our top five strategies to find more dollars in your annual fundraising plan:
Increase gifts from current donors
Pull a list of your backbone donors—meaning the individuals, foundations, and businesses or corporations that consistently support your organization year after year. These folks are your top prospects for increased income because they are already deeply invested in your mission.
In general, we recommend looking at individuals and institutions giving $5,000 per year or more. But you can raise or lower that threshold depending on your organization’s overall budget and donor base.
Approach each donor as if they are a fresh prospect.
- For foundations, study their 990s to see what their giving range is and whether their support to your organization should be higher. You can also look at ways to transition project support grants to general support grants, which offer your organization more flexibility. Finally, check and see if the foundation offers capacity-building grants or other technical support, as many do.
- For individual donors, you want to understand their full giving capacity. You can look at previous gifts to your organization, speak to board members who may know the donors, and conduct prospect research. While there are premium databases that consolidate wealth screening results, you can also try basic online searches to find press releases, bios, and even property records. You’re looking for anything that indicates an increased giving potential, such as a new job, promotion, retirement, partnership, home purchase or sale, or high-profile giving to other groups.
- For your current business or corporate donors, you’ll want to look at whether the business is thriving and, if possible, other organizations they are supporting. For example, has a local small business in your town supported your organization for many years at the same level, but the business recently expanded to two locations due to demand for their products or services? Now might be a good time to plan a conversation about their annual giving.
Make renewal funding requests early
While asking donors to make their gift earlier doesn’t necessarily result in a net revenue increase right away, it can provide opportunities to get in additional asks. For foundations, you’ll want to learn about their policies and grant cycles. For example, if a local foundation renews your grant every 10 months vs every 15 months, you’ll ultimately end up with more income.
Similarly, consider asking major donors—especially board members—to make their gifts in the first quarter or first half of the year, instead of waiting until year-end. This gives you plenty of time to prepare for a second ask as part of an annual giving campaign, fundraising event, or other larger fundraising campaign.
Add an extra fundraising appeal (or two)
Is your year-end direct mail appeal a steady and reliable income stream? Then it’s time to up that game. Try adding in a spring or mid-year appeal. Better yet, recruit a current donor to provide a dollar-for-dollar match for your appeal. This can incentivize increased giving from appeal recipients and be framed as a bonus gift from the major donor providing the match. It’s a win-win.
Also, be sure you set aside time for data and list analysis to determine what works best with your donors. Do you get more donations via email appeal or direct mail appeal? Or perhaps it’s a combination of the two. Are you segmenting your lists and customizing your asks? If so, which strategies are delivering the best results? If you’re not doing these things, it’s time to start!
Look hard at annual event revenue and expenses
Too many organizations run fundraising events out of habit or tradition—even if the ROI (return on investment) is dismal. Putting on a fundraising-focused event that costs as much as it raises is not doing your nonprofit any favors.
In fact, a fundraising event that technically breaks even is actually costing your organization money because:
- You’re losing staff time—especially the precious time of fundraising staff.
- You’re missing other, higher-value fundraising opportunities—because your fundraising staff are too busy putting on the money-losing event.
- You’re wasting donor dollars—paying for a fundraising event rather than creating impact.
Sometimes, there are programmatic or PR reasons to do an event that loses money. If that’s the case for your organization, it’s time to re-evaluate whether this event should live under fundraising or would be better supported by program or communications staff or consultants.
You can also look at how the event is supported financially. If there is a programmatic element to the event, it may be much easier to get one to two larger programmatic gifts to underwrite the full cost. Then, your fundraising staff can focus on cultivating your event donors and converting them into sustaining supporters.
If you have one or more fundraising events that are raising money (after accounting for expenses), but you want to increase that revenue, start by pulling the list of event supporters for the last several years. Can you find major or mid-level donors who, with a little more cultivation, could increase their event giving? Usually, the answer is yes.
Cultivate your pipeline of new fundraising prospects
Landing a gift from a new prospect—whether individual or foundation—is no easy feat. Plan for at least 6-18 months before a new prospect becomes cash-in-hand. While new prospects take more work and resources to land than donor renewals, you always need to be planting seeds.
If your organization really wants to raise more money in the coming year, then you need your board and staff leadership to commit to being part of the process. Your annual fundraising plan, paired with annual budgeting and planning, is the perfect opportunity to get people to step up. For example:
- Can each board member commit to reaching out to five people in their network to talk about your organization or invite them to an event the organization is hosting? Can board members commit to hosting a fundraising gathering in their home?
- Can your executive director commit to making donor outreach a regular part of their monthly work?
- Can your fundraising team commit to conducting grant prospect research at least quarterly?
As a fundraiser, the more you can get your whole organization to value and participate in fundraising activities, the stronger your results will be.
Annual Fundraising Plan Training and Templates
If you’re looking for more step-by-step guidance for your planning, check out our in-depth webinar on how to create fundraising plans. We cover planning templates, data analysis, calendaring, and how to calculate a gift’s likelihood in your revenue projections.
