Sustainable Fundraising Practices

We all aspire to create a sustainable organization that will continue to have the resources we need to fulfill our mission. Whether the funds we seek are for short-term projects or longer term initiatives, ensuring that the fundraising capacity of the organization will keep pace programming needs is of top concern.

Building a sustainable fundraising program which will continue to meet your organization’s needs well into the future requires adopting a few simple ideas into your organization’s thinking and putting s a few simple tools in place to execute:

1. IDEA: Fundraising is about getting what we need to support our existing plans
TOOL: Information/proposals which outlines your plans and what you need from donors

One of the most common mistakes that we make in fundraising is also one of the easiest to make. A donor/funder gets in touch with preconceived ideas of what they would like to fund – we, lured by the potential revenue, jump to meet their demands. When there is a true meeting of minds this can be a very positive thing for all parties, but when it means deviating from annual program plans it can mean disaster for fundraising sustainability. By accepting funds in this way we let the donors determine the program – a bit like letting the tail wag the dog. It is also likely to be a short term relationship as the donor interests don’t necessarily match with the long term direction of the organization.

A truly sustainable fundraising program, on the other hand, is one which raises the funds to support the existing program or operations plan. A fundraising strategy that, in other words, ensures that the organization gets the money it needs directed at where it is most needed and which seeks to develop long term relationships with donors/funders who understand, support and trust the strategic direction of the organization.

This is not to say that we should walk away from potential donors/funders. We are confident that we understand what the needs of the community are only because we have the advantage of being on the front lines and interacting with our beneficiaries. Our donors/funders may not have this firsthand knowledge of community needs and therefore cannot be faulted for thinking other activities should be the priority. Often therefore, our fist role in fundraising is to educate – to make sure all potential donors/funders have a chance to know what we feel the real needs are, and the rationale for our strategies and activities. Then they can make an educated decision about whether to support our work.

In order to do this we need to be prepared. We need to make sure that we have materials ready which outline our objectives and activities. This way we can pre-empt any confusion and ensure that those who contact us have a chance to evaluate their options in supporting our organizations before we spend too much time pursuing a relationship that will not meet our needs.

In my own work I always have a few such pieces available to send by mail, email or even to give out at face to face meetings. First is an organizational profile which clearly outlines the mission, the scope and rationale for our programs and answers any other questions donors/funders might have about accountability and organizational management. Second are pre-prepared proposals for the programs/projects that I am currently seeking funding for – this way I can very quickly narrow focus to the areas most in need and ensure that all existing projects are supported (make sure that these contain true budgets including any salaries and administrative costs so that your donors sponsor the total cost of activities – not just the tangible ones!). By being up front and specific about our needs we can ensure not only that we meet today’s actual needs but also begin forming relationships with the right people – those who are truly interested in supporting our work and therefore have the potential to be involved over the long term.

2. IDEA: Sometimes the most effective fundraising strategies are the most boring
TOOL: Solid budgeting/accounting practices that allow you to evaluate the ROI of fundraising activities to determine where you should be focussing efforts in the long term

In my experience the most memorable fundraising experiences are events which generally leave everyone feeling great about the organization but, unfortunately, can leave a less than full bank account at the end of the day. On the other hand, a successful proposal – that no one in the office was even aware I was writing and which cost us nothing but my time and the auto fare to and from a meeting – can result in a very large cheque and a funding relationship that can see the organization through many years.

How do you know where to spend your time? Special events? Grant writing? Individual donor campaigns? Online giving strategies? Corporate partnerships? The truth is that the answer will be different for every organization. The key is to make sure that you keep detailed budgets for all fundraising activities that take stock of the true costs involved including fundraiser salaries and office expenses. An event for example may have few tangible expenses but might take up two months of staff time – this is not free. Over time, you can then begin to calculate your average Return On Investment (ROI) for various fundraising activities, providing the justification for future tough decisions – including the decision to discontinue underperforming campaigns.

That being said, there are a few rules of thumb to keep in mind. Events, generally speaking, are not as sustainable as individual donor and grants development strategies. This is because the revenue is coming from people who may be motivated by the event itself rather than by the work of the organization; whereas, donors/funders may actually stick around longer due to shared values and commitment to the organization’s mandate.

On the other hand, when evaluating the ROI of your current fundraising activities, don’t forget to consider the ‘soft’ benefits that a campaign might have. For example, an event that may, in itself, not be very lucrative, may generate media exposure for the organization, or may introduce you to a new pool of potential donors that you can contact for other campaigns (Tip: make sure to document where you meet these potential donors so that you can trace back any future revenue to the event, thus giving you a true picture of value of the event).

3. IDEA: It is easier and more efficient to raise money from an existing donor than to recruit a new one
TOOL: A good donor management database and stewardship plan

It is common fundraising wisdom that the best donor prospect is someone who we already know and who has supported our organizations in the past. In fact, if handled properly, donors and funders should be counted on for support year after year for a period of up to five years (for some it could be even longer, while for others they begin supporting another cause even if their donor relationship has been positive). Many organizations, including those that I have directly been involved with, make a simple mistake in managing donor relationships which, unfortunately, results in many first time donors moving on without any subsequent support. The mistake in thinking that one thank you is enough. Or worse, simply forgetting to stay in touch throughout the year when our focus is on other campaigns and events.

In order to maximise the number of donors/funders who become long term supporters it is important to treat your donor stewardship as a year round activity. Multiple contacts throughout the year (that don’t ask for money) can go a long way towards not only thanking donors, but also helping to increase their understanding of your work and their commitment to the impact they have as donors. If done correctly donors will actually begin giving without being asked, or at the very least being more them happy to make their annual contribution when it comes time to ask them.

It is crucial that you have a good donor management database which records the names and contacts of all those who contribute over the course of the year. Beyond your usual thank you note that is sent with your 80G certificate, all your donors should be hearing from you at least once per quarter to remind them of your work and keep them informed. If you database is accurately maintained than this should be as simple as adding all donors to your regular newsletter or e-bulletin distribution list.

Whether using an existing communication tool, or creating a donor-specific piece, making sure to build regular year-round communication into all your campaign and event plans can have enormous impact. Never again will you ever be caught saying “remember me, can you support us again this year” or desperately trying to start from scratch and convince completely new audiences of the worthiness of your cause – a potential drain for both financial and human resources.

Instead you will begin to develop a regular donor pool whose behaviours you can start to predict – making everyone’s job easier come budget planning season when you can reasonably assume revenue from existing supporters.

4. IDEA: Everyone is a fundraiser
TOOL: A staff and volunteer team well versed in your organization’s mission and activities

Fundraising is not just for fundraisers. Organizations that are successful in developing sustainable funding bases are those where everyone involved is prepared to act as ambassadors for the organization, maximising the potential audience of new donors and generating positive word of mouth. This is especially true in the Indian context funders and donors still primarily depend on reputation and recommendations from their own network to feel confident that an organization is credible and worthy.

Internally this means making sure that there is common agreement on key messaging and that everyone involved is well trained on your mission and activities. A communications policy along with standard communication tools (preferably in PDF form) that are accessible and available for all staff and volunteers to distribute, can go a long way. To take it to another level, consider offering specific training to volunteers and friends of the organization – a tip I learned recently from a study in the United States that found that volunteer ‘ambassadors’ are often seen as more credible and reliable than their paid counter parts!

By adopting these practices and spending time on the back end tools of your program, building systems and processes that support your strategies, you can be sure to see sustainable revenue growth. With these fundamentals in place you will be able to focus on what we are all really here to do – respond effectively to the needs of our communities over the long term!

--Claire Holloway Wadhwani

Claire is a seasoned fundraising professional with experience working in fundraising management for NGOs in Canada as well as in Bangalore. Claire can be contacted at chwadhwani@hotmail.com and is most happy to share ideas and best practices with other fundraisers!