Mastering the fundamentals of fundraising
Six fundamental fundraising principles you should know about
When organisations and initiatives are strategic and systematic in implementing their fundraising activities, they can build a strong positive reputation within their donor community, count on loyal donors, and effectively acquire new donors to grow revenue streams. To approach fundraising strategically and systematically, it is essential to master the fundamentals of fundraising.
1. Nurture a culture where fundraising is everyone's affair
When fundraising is at its best, it serves as a bridge between different stakeholders (beneficiaries, donors, board members, programmes, finance, communications, etc.). Fundraising activities require constant iterative exchanges with these stakeholders:
to gather information internally to accurately convey the organisation or initiative's mission, needs, impact and vision in a language that resonates with its supporters,
to build relationships with the board, who should actively participate in fundraising activities,
Rally the expertise of internal staff, such as the communications and programme teams, to cultivate relationships, solicit funds and build donor loyalty at different stages of the donor life cycle.
Furthermore, fundraising should be an integral part of the organisational strategy, therefore board and management’s commitment to fundraising should be made a priority for sustainable organisation development.
2. Have clear understanding all the possible revenue streams available
Traditionally, not-for-profit organisations have focused their funding models on institutional and private donations. Although other revenue streams exist, most often social impact organisations solicit funds from: public institutions, individuals, companies, and private foundations.
It is important to understand the difference in donor profiles. Understanding key donor characteristics by donor segment will help you:
know where to identify new prospects (prospection channels differ for each donor segment)
know their communication preferences, channels and preferred communication tone,
create fundraising campaigns adapted to each segment and within their giving capacity,
thank and recognise them in a meaningful manner,
evaluate whether you have the network, resources and expertise to solicit funds from a particular donor segment,
evaluate whether your organisation’s values are aligned with the type of donor, personalise your fundraising actions accordingly
3. Understand the key steps of the fundraising cycle and use them as your roadmap
The fundraising cycle focuses on the process of acquiring donations and securing donor loyalty. The seven key steps are:
Step 1: Building a Case for Support
A case for support is the general argument for why a non-profit deserves financial or in kind support. The case statement focuses on or highlights critical factors important in arguing for the donation financial support.
Step 2: Identification
Identifying all the possible funding sources and prospective donors who could fund your mission or project.
Step 3: Qualification
Once you have identified all prospective donors the most aligned ones are selected based on in-depth research.
Step 4: Marketing and Communication
In the fundraising ecosystem, communication is an essential component of a successful fundraising strategy. Through extensive research about your prospective donors, you will have a better idea of 1) the type of communication material you will need to produce and 2) the tone and format that is most appropriate for the donor type.
Step 5: Cultivation
Based on your priority list you will engage with individuals and organisations to build a relationship of trust, to demonstrate your impact and provide opportunities for them to connect with the cause.
Step 6: Solicitation
Through diligent qualification and cultivation, you will know enough about your donors to make an adapted ask for money, support, or influence to advance your organisation, cause, and projects.
Step 7: Stewardship
Many organisations fall short at this point. Stewardship is the act of thanking and recognizing donors as well as informing and re- porting on how their contributions have been used.
4. Build your fundraising capacity to be more efficient and creative
Over the years fundraising has professionalised. Funders have high expectations when it comes to soliciting funds. They expect organisations to be able to clearly communicate their mission, methodology, solutions and measure their impact in a way that is relevant, convincing, and appealing. With increasing competition to acquire the interest and support of funders, it is important to build fundraising capacity and commit to ongoing training.
5. Create or invest in tools and resources that will support your fundraising activities
Making an inventory of the tools and resources you need to achieve your fundraising objectives is essential.
Below are some key documents / tools that are useful for your fundraising activities.
functional database of CRM
project tracking and reporting
communication, fundraising and stewardship planning tool / document
6. Invest time in your fundraising activities and be patient
Invest time on fundraising on a weekly basis. From the moment you reach out to a prospective donor you should count three to eighteen months. Take this into consideration when setting your fundraising objective.
Receiving negative responses is very common, therefore use this opportunity to seek feedback when possible and adapt your strategies seeking constructive feedback when possible.
Further information can be found here: fundraising: a short introduction
You can find more documents on this topic here:
📃 Articles, studies and literature
📃 Go to our guides for the fundamentals of Fundraising
📃 Go to our donors lists
This article was written by Abena Lauber, founder of aCommunity and fundraising expert.