How to Write a Successful Annual Fundraising Plan in 6 Steps

If you’re trying to fundraise without an annual fundraising plan, then you’re trying to bake a pie with a lot of ingredients — but with no recipe.

Can you do it?

Maybe.

The contestants on The Great British Baking Show manage to get it right with impressive frequency.

But… that either requires a good memory or a lot of guesswork.

Do you really want to make fundraising so hard? Or leave so many things to chance?

The solution is to have a recipe or rather, a plan, that maps out all your fundraising for the year.

You see, your annual fundraising plan is a treasure map that leads you to the exact activities that will raise the most money for your nonprofit over the course of the coming year.

It’s what makes the difference between nonprofits that thrive and those that just survive.

Your plan will:

• Keep you focused on what works and stop you from chasing every shiny new idea.

• Balance your activities, keeping you from letting entire months slip by with no active fundraising, then squeezing in too many fundraisers and Asks at the end of the year (which feels really crappy to donors!).

• Allow you to time your appeals for the best results and spread your grant writing throughout the year, instead of cranking out a year’s worth of grants in the Fall when you’re also planning your year-end campaign. That approach to grant writing doesn’t work, by the way.

• Engage your Board. You can show them exactly what’s coming up and invite them to choose which activities they want to be involved in.

• Give you the power to deflect the “great new ideas” your Board, staff, and volunteers come up with, because you can show them what you already have planned.

Actually, having a plan gives you an out. You can say to them, “Wow, that’s a great idea. But, my fundraising plan for the year is already pretty full [show them your written plan]. In order to take on your idea, one of these will have to come off.” They’ll back right off, and you won’t overcommit yourself trying to make them happy!

This strategy helps educate them that you have a lot on tap already and that you won’t be dropping everything to sell poinsettias, publish a cookbook, enter a national contest, or write a letter to a celebrity asking for money (or whatever else they’ve come up with).

Given the many ways a fundraising plan can make your life easier, it’s hard to understand why so many organizations don’t have one.

Often, fear of creating a less-than-perfect plan holds people back. Or the search for the perfect template. Or finding the data you need. Sometimes Imposter Syndrome rears its ugly head and keeps you from making a plan because you think you’re the least qualified person to do it.

But here’s the thing: done is better than perfect. Done means you have a map and can start driving toward your destination.

Your imperfect, good-enough, fluid annual fundraising plan will give you the roadmap for the year, so you always know what is happening next. In fact, a fundraising plan that’s 50% done and 100% implemented will ALWAYS produce better results than no plan at all.

If you’re smart and build revenue projections into your plan, you’ll have a good idea of cash flow for the year. You’ll also have the confidence of knowing when the time is right to spend money on programs, something many young and small organizations struggle with.

And your plan will give you a reality check to hold back when you’re tempted to barrel ahead with a new program before you’ve fully figured out the funding for it.

Some people think, “I don’t need a plan. I’ll just make it up as I go.” And I get that. I used to be one of them.

But a plan changes the game. With a plan, you’ll:

• Be more productive because you’ll be working on tasks that move you toward your goals.

• Feel confident that you aren’t wasting time on unproductive tasks.

• Leverage your resources of time, energy, and money on things that will give you the greatest return on investment.

The process of writing your annual fundraising plan will be transformational and freeing. Don’t put it off. Just do it!

And here’s the recipe you need.

After creating fundraising plans for myself and clients for 20+ years, I’ve found a formula. And here it is – six steps to writing an annual fundraising plan, regardless of the size of your nonprofit or how long your organization has existed.

If your organization is just getting started, it’s a perfect time to create a plan that guides your fundraising activities for the next year.

Do you have to start in January? No! As you grow into your fundraising strategy, you’ll want to start your fundraising plan when your fiscal year starts.

But there is no time like the present! So let’s dive in.

Start the planning process by reviewing your history. Specifically, review your activities and numbers from the last year. What worked? What didn’t? What did it cost you to raise money in terms of expenses and time?

Look at the data for each fundraising activity and ask yourself if it was worth it. What was your return on investment? What was your cost to raise a dollar?

Based on this information, choose what to repeat in this year’s plan. Leave out events that cost too much relative to what they brought in. Drop activities that only generated nickels and dimes.

A nonprofit I work with has tried several different campaigns on Valentine’s Day, and they always fail to ignite. It’s hard for the organization to abandon the Valentine’s Day campaign because they feel like it should work.

But, the Valentine’s Day campaign hasn’t worked, in spite of all the tweaks they’ve tried. So, it’s time to let it go and focus on other campaigns that DO work!

The organization’s Spring campaign is not tied to any holiday, and yet it’s always successful, as is Giving Tuesday. How about a campaign in between those two tied to a specific, urgent need?

As you review each activity from last year, ask yourself:

• Should we keep doing it?
• Can we tweak it and make it better?
• Is it time to dump it?

My point here is this: make plans based on data, not emotion. Don’t repeat the 5K just because some people in your community love it. Keep it because it makes a lot of money, even when you consider the labor and money you have to invest in it.

Events can be the trickiest when deciding whether or not to repeat them. For nonprofits that have been around a while, they like to do events again and again because it’s become a tradition. But look – tradition doesn’t pay the bills!

For each event, aim to raise at least four times what you spend on the event. Often, an event brings in the cost plus a few thousand dollars more. Anything less isn’t enough to justify your time and energy!

If your nonprofit is new, you get to skip this step. But… be ready to do it next year. So, take the time to track your data this year, and you’ll be all set for this step next year!

Every nonprofit needs direction so they can stay focused throughout the year. What they need is an Impact Goal which is a beacon to guide you through your journey and ward off distractions.

An Impact Goal defines the impact your nonprofit will make this year. It’s a quantifiable, specific, measurable goal your organization’s team agrees is important and doable if everyone works together.

For example:

• An animal rescue group might aim to increase the number of animals they save by 25%.
• A food bank might intend to serve an additional 100,000 meals.
• An affordable housing program might shoot for eliminating their waiting list.
• A child advocacy organization might set a goal to double the number of volunteers trained to protect children in the court system.

Your entire fundraising plan should support your Impact Goal by providing the funding to make it happen. If your Impact Goal is to increase services in a particular program by 25%, then you need targeted campaigns that move you toward that goal so that the money is there to reach the goal.

Work with your team to determine your Impact Goal, and then post it for everyone to see – your team, Board, volunteers, and supporters.

When there’s no finish line, how do you know when you’ve crossed it? When there’s no target, how do you know if you hit the mark?

Yet so many nonprofits try to raise money this way. They have no fundraising goal and try to just raise as much money as possible.

Don’t do it that way! It’s too vague. Having no goal actually makes fundraising harder because you can’t tell people what you’re trying to do.

On the plus side, you win no matter what. If you don’t set a fundraising goal, you can’t fail.

But you don’t win if you don’t bring in enough money to fund your programs.

You cannot achieve your potential without a goal. You want to strive! When you strive, you thrive. But you need something to strive for.

For your annual fundraising plan, you need three goals:

1. Total dollars to raise: Be specific. If your Board adopted a budget for the fiscal year, your fundraising goal is the same as the total expenditures, plus at least 5% for cash reserves. If you’re just getting started and everything is fluid, calculate how much money you need to run the programs you aim to run this year. That’s your fundraising goal.

For example, a new project provides grocery store gift cards to college students coping with food insecurity. The organizer set a goal of sending five $100 gift cards each month.

That’s $500 a month for 12 months, or $6,000. Add 5% for cash reserves, and the total is now $6,300. Then add another $500 for administrative costs. Your total is $6,800, and that’s your fundraising goal. See how that works?

Most programs are more complicated, but the bottom line is the same. You have to know how much money you need to run your programs before you can set your annual fundraising goal!

2. Total number of current donors to renew: Every time someone gives you money, you have an opportunity. You can make that donor feel special and appreciated to the point that they give you another gift. And another. And another.

Donor retention is something you must pay attention to if you want your organization to grow and thrive. Across the nonprofit sector, retention rates hover between about 40-45%, meaning donors leave nonprofits more often than they stick around.

Why? Donors leave when they don’t feel appreciated or needed. However, you can build warm touches into your plan to make donors feel good so they feel like part of your team and want to help change more lives.

So how many donors should you try to renew? All of them! But seriously, 100% retention is unrealistic because life is fluid and peoples’ situations change.

Your donor software may calculate your retention rate for you or you can manually calculate it. If you don’t know your retention rate, shoot for 50%. If 100 people gave you money last year, can you convince 50 to give you money again this year?

Keep this number on your radar all year long so you can tweak your fundraising activities in real time to give donors a better experience. THAT’S what increases your retention rate!

3. Total number of new donors to acquire: If you’re losing 50 out of 100 donors (from our example above), you have to replace those 50 donors just to break even and keep your donor base at 100. To grow your organization, you have to replace the donors you’re losing – and then add more. What should your goal be? 10% more? 20% more?

Here’s an example. If you had 100 donors last year, and your goal is to get 50 of them to give again, that leaves 50 to replace. And if you want to grow your organization, you could set a goal of increasing that number by 20%. So the number of new donors you need to acquire would be 70.

Build donor acquisition activities into your fundraising plan, and you’ll continually add more people to your donor base.

We all think about the first goal of raising money, but we rarely spend time on donor retention and adding new donors. By focusing on all three goals, you’ll ensure you always have enough donors to support your organization’s work.

One of the worst fundraising strategies is trying to duplicate what another nonprofit does.

Don’t worry about the nonprofit down the road. Instead, choose fundraising activities that play to your personal strengths and your organization’s assets. 

So, what are YOU good at?

Are you a great writer?  A dynamic speaker? A master networker?

List the things you’re great at so you can leverage them in your fundraising plan. You want to stretch, grow, and learn new skills. But for the foundation of your fundraising strategy, work with your strengths. Don’t commit to things that suck your energy and leave you frustrated.

Once you have a list of your personal strengths, assess what your organization has going for it so you can leverage that.

Think about things that make your organization stand out from the crowd. For example:

• A compelling mission that draws people in
• A large base of support 
• Well-known staff and Board members
• A building that lends itself well to a tour, like a shelter or a school
• A location on a busy road
• A Facebook page that has a lot of engagement
• Hundreds of volunteers

When you create your fundraising plan based on your strengths and your organization’s assets, you’ll find fundraising easier and more fun.

Here is where the previous four steps come together. As you consider what activities you want to include in your fundraising plan this year:

Refer to Step 1: What has worked in the past that you want to repeat? Or what have you done before that you can tweak and improve?

Refer to Step 2: What activities will help you take big steps toward achieving your Impact Goal?

Refer to Step 3: What activities will help you raise the total dollar amount you need? Which ones will help you reach your donor renewal goal? Which ones will help you reach your donor acquisition goal?

Refer to Step 4: What activities will play to your personal strengths, without pushing you too far outside your comfort zone? What activities will leverage your organization’s assets?

If you’re not sure where to start, use the 1-10-1,000 Rule: 

Do 1 special event. You’ll never fully fund your budget with lots of little events. Instead, hold ONE big fundraising event each year. Give it everything you’ve got and make it a signature event, so everyone in town knows it’s your event.

Make it a FUN event that people talk about for days afterward. And make sure it makes you plenty of money (at least 4 times what you spend) so it’s worth the effort.

Go after 10 grants. Do your research, and identify 10 solid grant prospects. That’s about what we usually find for clients. Chances are good that with 10 grant opportunities, you’ll have deadlines scattered throughout the year and you can keep your grant pipeline full.

Do you need exactly 10? No. The goal is to not leave grant money on the table, which is easy to do when you don’t plan. Find grants that are a hand-in-glove fit for your nonprofit and go after them. If your nonprofit is new, you’ll need about three years of programming under your belt before you go after grants. Use those three years to build up your donor base and find the right signature event.

Get 1,000 individual donors. Yes, that’s one thousand donors. That many donors will give you a solid base of support. If you lose one, you’ve still got 999. Start by figuring out how many donors you have right now. Then work on adding 100. Once you have those, go find another 100. If you already have 1,000, add another 1,000. By taking on this goal in smaller bites, you’ll be successful.

Finally, let’s write!

If your annual fundraising plan isn’t in writing, it isn’t real.

It’s too easy for you to change course or let things slide if your plan is in your head – and that leads to lack of accountability.

People get held up trying to decide what format to use. But you know what? It doesn’t matter! Do what works for you.

A Google Doc or Sheet is a great place to start because you can collaborate with your team.

One way to structure a plan is in buckets: individual donors, major donors, monthly donors, signature event, business partners, faith community, family foundations, and other.

You may have different buckets. Think about the groups of people who give you money and who might give you money if you asked.

List strategies and goals for each bucket, building on what worked in previous years. Write down dollar amounts! Some people don’t like to attach dollar amounts to goals, but you have to get comfortable with dollar amounts to succeed in fundraising.

Another way to structure a plan is in a calendar format. Take it month by month and write down every strategy that will get you to your goal.

I like to start with a plan broken down by buckets and then break that bucket-driven plan out into a color-coded calendar, so I know exactly what I need to do every month.

Once you get a draft, you can refine your plan until it feels just right. Continue to adapt your plan as the year progresses. If one strategy doesn’t work out, add something else to make up for it.

Anyone who will be responsible for implementing the annual fundraising plan should be involved in the planning process. When people have input into a plan, they’re more likely to buy into the plan. 

Include Board members in big-picture discussions, but not in the details, unless they plan to help in a volunteer capacity. Once you get your fundraising plan completed, share it with the Board for their review (not their approval), and listen to their feedback with an open mind.

Then, talk to each Board member individually to ask them where they would like to help. If you talk to the Board only as a group, you won’t get commitments. You need to have these 1-on-1 conversations to get the engagement from them that you’re hoping for – turning your Board into a fundraising Board!

It’ll take a minute to put your fundraising plan together. And a lot of brain power.

Once it’s done, keep it handy so you can adjust it as you go.

Review your plan at the beginning of each month and ask yourself:

• What’s working?
• What’s not working?
• Where are we on dollars raised last month and year-to-date? How are we doing on donor renewals? Donor acquisition?
• What’s coming up in the next 30 days that I need to be working on? 90 days? 6 months?

The worst thing you can do is take your amazing plan and put it in a folder somewhere, forgotten. Refer to your plan each month to see what you should be doing so you can work ahead of deadlines and stay on track to meeting your fundraising goals for the year.

Your annual fundraising plan is critical in reaching your fundraising goals. Take the time to get it done and put it in writing!

As you get comfortable working with and trusting your plan, you’ll have the map you need to raise the money you need to fund your programs and change lives.

If you want help with this process, join us January 17-31 for Fundraising Blueprint. I’ll walk you through these steps, plus I’ll give you my color-coded, detailed annual fundraising plan template AND a sample plan! Sign up at www.GetFullyFunded.com/Blueprint