Fundraising Readiness

Fundraising Readiness for Charitable Organizations

There are many ways to raise money for charitable organizations including holding special events, conducting direct mail appeals, selling products, and submitting grant proposals to potential funders. But a charitable organization will not achieve long-term fundraising success, if it is not ready to solicit potential donors.

Fundraising readiness is particularly important for start-up organizations because they are not well-known or well-tested. Therefore, potential funders do not have as much information on which to make a decision to support such organizations.

What is fundraising readiness?

Fundraising readiness is an organization’s ability to “support and sustain fundraising activities.”

I once received a call from an executive director of a small, struggling social service agency that was not serving its target population because it had no money. She was desperate to obtain grants from foundations and corporations. In talking with her, I discovered that she had no fundraising plan or clearly defined program descriptions. She was not sure about the geographic area that her organization planned to serve nor had she thought about the number of people it planned to help. Her board members were not taking an active role in the organization. Furthermore, she had not even prepared a budget. Although her organization’s cause was important and worthwhile, it was not in a position to raise money.

So what components are needed to operate a successful fundraising campaign?

Organizational Structure

To demonstrate stability, competence, and accessibility, an organization should build a basic business foundation that can be expanded upon over time. This involves completing the following activities:

• Incorporate as a nonprofit organization
• Obtain 501 (c)(3) tax-exempt status from the IRS
• Obtain a bank account
• Set-up a bookkeeping system
• Adhere to standard accounting practices
• Develop a budget
• Establish an administrative office that includes a computer, Internet service, phone number, fax number, and e-mail address
• Create an Internet presence that may include a website, blog, or social networking page

Human Resources

The organization should employ administrative staff (paid staff and/or volunteers) who have clearly defined roles and regular work schedules. This will make managing the organization and conducting fundraising activities consistent and effective. It should also develop a board of directors with a wide range of expertise in various areas of business operations. Board members should take an active part in managing the organization and raising funds.

Financial Resources

An organization will need a budget to implement its fundraising plan. The budget might include the following expenses:

• Salaries for fundraising staff and consultants
• Fundraising software
• Production of materials
• Postage
• Costs associated with meetings and special events

Like any new business, start-up capital can be difficult to acquire. Some ideas for acquiring resources to develop the organization’s structure and implement a fundraising campaign include gathering donations from board members, investing personal income, working with organizations that help nonprofits build capacity, and building a volunteer-based work force.

Fundraising Plan

A fundraising plan helps an organization develop and follow an effective course of action. It is not a static document. Much like a business plan, it should be viewed as a blueprint for success that might need to be revised to adapt to changing internal and external conditions.

A fundraising plan enables the organization to gain an understanding of its fundraising needs, choose the best fundraising methods, and evaluate the fundraising climate. This makes it possible to move forward confidently and efficiently.

Time

Depending on the fundraising method, it can take quite some time to get from the planning stage to the end destination of obtaining donations. This makes fundraising a long, sometimes tedious, and usually on-going process. Therefore, it is imperative that an organization give itself enough time to develop its structure, plan a fundraising campaign, and implement the plan.

Why is fundraising readiness so important?

When an organization develops its structure before it begins raising money, it will be able to demonstrate to potential funders its capacity to successfully tackle a particular issue. If an organization does not have sound business practices, is disorganized, has not defined its target population, has not developed its programs, and does not present a well-thought out case for funding, it will have no credibility with potential donors.

Foundations, corporations, government agencies, and individual donors will not invest their money in an organization that they do not trust to use their money carefully. They will have no faith in the organization’s ability to make a positive impact on a cause that they feel passionate about.

Listed below are suggestions that will help charitable organizations, particularly start-ups, prepare themselves for fundraising.

1. Develop a case statement. A case statement is a brief document that explains why an organization is important and worthy of funding. This statement forms the basis for developing other documents such as proposals and fundraising plans.
2. Develop a fundraising plan that lists fundraising methods, potential sources of funding, goals, and timelines. The plan should take into account the organization’s strengths and weaknesses as well as the fundraising climate.
3. Create an annual budget that lists revenue sources and expenses. (The budget should include operating expenses and program expenses.)
4. Secure some resources such as money, equipment, and supplies before starting the fundraising campaign. This will show potential funders that the organization has stability.
5. Develop partnerships with local government, the business sector, community leaders, and other organizations.
6. Clearly identify and describe the target population.
7. Define the geographic service area.
8. Develop solid programs that include best practices or innovative ways to address the target population’s needs. Program plans should include activities, goals, objectives, timelines, and evaluation methods.

Creating a charitable organization that provides a full-range of services to its target population can take many years. Yet, building a sound organizational structure that makes it possible to raise money is a more immediate task. If a charity is just starting out, it will probably have to build its structure while raising the money that it needs to grow.

The key is to have a basic structure in place that shows potential funders that the organization is credible and viable. This coupled with a solid fundraising plan will help the organization successfully compete for foundation, corporate, and government grants as well as donations from individuals.

References

Institute for Conservation Leadership. Assessing your organization’s fundraising readiness, https://www.icl.org/samples-lib/fundraising.php (accessed May 21, 2009)

Sarabi, Brigette. Fundraising readiness: How does your agency stack up? The Grantsmanship Center. http://www.tgci.com/magazine/Fundraising%20Readiness.pdf (accessed May 20, 2009).

Wyckoff, Barbara. Basic fundraising plan, National Forest Foundation. http://nationalforests.org/pdf/BasicFundraisingPlan.pdf (accessed May 21, 2009).