Thursday, 10 July 2008

Starting a Charity? Fund Development Planning, cont'd

In the last post we had an overview of some of the major ingredients of a Fund Development Plan. How let's delve further into each of the ccmpontnes. And the first component of a Fund Development Plan is the organization's Strategic Plan. This may seem counter-intuitive, to include elements of a strategic plan in this fund development plan, but it is necessary to understand that without first having a strategic plan, a fund development plan is of little use. The new charity needs to have a firm grasp on the strategic elements before trying to raise any money in support of their effort.

Strategic planning is, admittedly, a difficult and time-consuming first step, which may, at first, seem repugnant to a Board that urgently needs to raise cash today to cover past debt and bring fiscal stability to the organization. The intuitive thing to do would be to immediately go out and try to raise the funding so urgently needed.

However, as we shall see throughout this process, fundraising is, at times, very counter-intuitive. And at this stage, the first step is just that. When we are beginning to be serous about our fundraising effort, discipline and hard work on the strategic plan is the only way that the organization can so position itself that it will attract any significant contributions.

The strategic plan is a detailed description of the social aims the nonprofit organization wishes to achieve and the strategies and tactics it will employ to accomplish those goals. Without that, the donating public may come to see the organization as just another directionless nonprofit in an over-crowded, under-funded philanthropic marketplace. The consequences of not completing the step of strategic planning will be financial disaster and, eventually, the closing of the organization.

The ability of any charitable organization to accomplish its mission is predicated on several vital ingredients:

  • the original vision and values of its founder
  • the ongoing, evolving vision and values of its Board of Directors
  • the specifically named social aims the organization desires to achieve
  • the needs of the community the organization seeks to address
  • the surrounding circumstances that affect mission accomplishment
  • the way the organization states its mission
  • the outputs that will be necessary to measure the success of missional strategies
  • the outcomes that will measure and define progress toward the stated social aims
Initially, in a new nonprofit organization, these elements are often given verbally and in a somewhat fragmented form as occasion demands. Moving through the steps of founding a nonprofit organization the vision and values of both founder and Board of Directors often develop in response to external problems or opportunities, and are articulated only as need arises.

The strategic plan, however, brings these elements into focus, and forces us to write them down. This codification process allows us to objectify them, examine them, sharpen them and prepare them to be used in both program and fundraising efforts.

Not only that, but these elements also provide the basis by which the Board of Directors will devise specific programmatic strategies to accomplish the organization’s mission, as well as the policies and procedures used throughout the organization’s management practices, financial records and reporting, and its fundraising efforts. These are the strategies that, in the Board’s best judgment, will take the organization from where it is today and permit it to accomplish its mission and achieve its social aims.

Strategies for a
new charity might include such steps as providing educational seminars or workshops for given program constituents; they might also include direct help to constituents who need specific types of services.

These strategies will comprise the programmatic efforts of the organization, but will also reach into the management and financial arenas and the fundraising efforts of the organization. What strategies will we use to see that we are well and carefully managed? What strategies will we use to assure financial stability and transparency throughout our existence? What strategies will we employ in fundraising? These are a few of the questions the strategic plan must answer.

One of the chief reasons it is necessary for a nonprofit organization to have a written strategic plan is that this plan forms the basis for writing a “Case for Support” for the organization’s work. That is, it translates rather directly into the set of reasons why donors should give the organization any money. Donors are concerned to know that their gifts will be used for what the organization advocates or for its services and in its work, and they desire a high degree of transparency in organizational reporting. Donors can and often do ask strategic questions to which we need to have ready answers before they ask.

For example, if we are going to offer educational programs with a certain kind of content, we then say to our donors that when they give to our organization they are providing necessary education to the community’s members.

When we say that there is a community need, this translates into a case for support that tells donors they are able to ameliorate community need through their gifts. When we say that we value knowledge and education for our program constituency, we can say to donors that their contributions are used to promote the values of knowledge and education, and that through their gifts, members of the community are better able to cope with situations they face on a daily basis. The strategic plan translates, through the Case for Support, into ways that Donors are making their community better by way of their gifts.

Always the Case for Support is expressed not in terms of what our organization does, but in terms of what the donors can accomplish through our work when they give to our organization. It is the donor’s perspective, needs, wants and values that are uppermost in our minds, not the needs of the organization.

One of the aspects of strategic planning that we will want to include in our Strategic Plan that powerfully affects our fundraising capability, is our commitment to investing in our fundraising process and in the acquisition and continual enhancement of fundraising infrastructure.

The purpose of this commitment is to ensure our ability to raise the money we must have in order to provide high quality service to members of our community. We acknowledge that without such a commitment, and without such increasingly enhanced fundraising capability, we will be unable to serve the community and thus fulfill our responsibility as a public trust residing in our state.

Therefore, we will represent our continuing needs for enhanced fundraising and fundraising infrastructure in both our Strategic Plan and our future budget projections, so that we have firmly before us the cost of ensuring our organization’s financial stability and missional capability.

About the Author: John G. Fike, CFRE
Fundraising professional with 30 years in the business, eleven of them in my own practice. Over $50 million raised so far. Practicing mostly in Michigan. Adjunct Faculty member for Eastern Michigan University, teaching Nonprofit Management courses. Board Member and President-Elect for Greater Detroit Chapter of Association of Fundraising Professionals. See my website for full resume.

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