Angela Cluff talks through the key stages involved in starting out with a new fundraising strategy

Every charity needs a successful fundraising strategy. This seven-step model works for any organisation, regardless of its type, size, or cause – but will be especially useful for smaller charities, including those without any dedicated fundraising resources.

1. Create the case for support

At the centre of all good fundraising lies a powerful argument for why someone should support that charity’s work. To ensure your organisation creates a solid case for itself, challenge it to explain:

·     The problem

·     Your organisation’s solution to the problem

·     The difference you will make if you succeed

·     The consequences if you fail

·     Why your organisation is uniquely qualified to tackle the problem.

All of this must be explained in a simple, externally focused way that is both memorable and emotionally engaging. Donors don’t give to your organisation per se; rather, they give to change the world for your beneficiaries. So put your beneficiaries and their stories at the centre of your case for support, and show the tangible difference your work makes to their lives. Then reinforce the donor as critical – you cannot deliver for beneficiaries without the support of donors.

2. Pick your best income streams

Decide which income streams make the most sense for your cause and organisation, matching your ambition to the resources you have. Key sources include trusts and foundations, companies, individuals, government bodies, and ‘other’. A mixed portfolio is best – this way, you avoid being too dependent on any single source.

Each income stream will have distinct characteristics, which will require different levels of resource to exploit them and different timeframes to deliver a result.

Organisations new to fundraising often choose to approach trusts and foundations, which exist specifically to give grants, so this can be a good place to start. Typically trusts and foundations are relatively easy to identify, and they publish or are willing to talk about their funding preferences. This means you can target your resources effectively, focusing on those that are willing and interested to fund the sort of work you do.

Commercial businesses can be a good income stream, as they often contribute to causes in a variety of ways – as philanthropists and as sponsors, with payroll-giving, cash or ‘in kind’ with goods and services. These relationships require proactive management, and the resources to do that, plus you need a clear rationale for why a particular business might want to support your organisation.

Then there is fundraising from individuals; appealing to the wider public using campaigns across a number of channels – direct mail, DRTV, press ads, social media, etc. Public fundraising needs sustained effort and dedicated resources, but often provides critical unrestricted income.

3. Structure your fundraising

Once you have decided which income sources are the most appropriate for your organisation to approach, you can then work out how to structure your fundraising. For example, by creating a volunteer fundraising committee, employing a fundraiser, or outsourcing to a fundraising consultant.

If you are planning to fundraise in the long term, it is important to start building your organisational capacity for fundraising as early as possible. The relationships you build could be, and should be, the basis of your future fundraising – so you need to make sure these relationships are firmly embedded with your organisation, and not with a third party. Get it right and you will have friends for life. Get it wrong and your donors may be transitory.

4. Research your donors

The next step is to identify the specific potential donors you plan to target. Pinpoint the people and organisations that will have a reason to support you by researching not only who might be interested in you, but also who is able to give at your required level. You can look at a wide variety of information to help you do this.

Trusts and foundations might list previous grants on their website, where you can see what they have funded and the size of their grants. Companies are often keen to publicise what they have done, helping you get a sense of whether what you want to ask them to do is in line with what they have done before. Individuals are much harder to research; you can identify a general ‘profile’ (age groups, etc) of the type of person that is likely to support your cause, but people will often tell you a great deal if you can talk to them on a one-to-one basis.

Identify too how you will reach each potential supporter. It is easier to reach out to warm contacts, so identify whether your board, senior staff and others can map their connections and contacts to help you reach potential donors. Going out to cold audiences with campaigns can reap huge rewards, but tends to be harder and slower. Whichever route you take, you need to be relentless and driven.

5. Develop a compelling proposition

Find a way of matching your needs to the interests of your different donor types and their ability to contribute. For example: if you are planning to approach individuals in your local community you will need to explain what their £20 will do and the difference that will make. On the other hand, if you are planning to approach trusts and foundations, this will require the creation of a specific project (or part of a project) that they can fund, at a level that matches their likely level of giving, i.e. a new hospital unit, a new piece of research equipment, a new educational programme with an associated running cost, etc.

6. Don’t forget to ask for money

Different audiences require different approaches. Some sources, such as government and trusts/foundations, typically require a written proposal. In this case you need to balance ‘following the rules’ with making your proposal stand out from the many others they will receive.

Others, like corporates, will require you to ‘pitch’ – you and other organisations will be invited to make a presentation about why the company should support you. Remember the question is ‘why should they support you?’, which is different to ‘tell us who you are and what you do’. It’s your opportunity to make them see the impact their funding could make.

As for individual givers, there are many ways to ask for their support, from organising a special event, to writing to them, to asking them in a face-to-face setting. All need careful preparation, but the more tailored and personal your ask, the greater its chance of success.

The key is to demonstrate that you know and understand your donors’ needs. So for a trust or foundation, you might 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 proposition that matches their needs and interests. 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 and ideally refer to their current association with your cause.

7. Create a long-term relationship

Generating support is just the first step. Building successful long-term relationships takes work, so ensure you thank your donors effectively and genuinely, and keep the lines of communication open.

On a practical level, make sure you are able to maintain and grow donor relationships by keeping an informed database. Staff can come and go over time, so it is vital to develop consistent and effective processes for recording relevant information about your donors – giving history, communication preferences, personal responses and feedback, etc. You might hold information on a simple spreadsheet (for a small number of high-value relationships) or you might need to invest in a more sophisticated database product. In either case, remember you must adhere to all data protection regulations and best practice.

Continue to involve your donors in your organisation’s work, inform them about new projects and programmes with beneficiaries, new appeals, and the rationale behind that. But most of all make sure you report back to them, so you can help them see the real difference their contribution has made.

Angela Cluff is director of the Management Centre