Fundraising: Developing a Fundraising Plan
Updated: 6.1.06 Printable version
The basic elements of a short- and long-term plan are similar. However, there are some additional considerations you should think about when developing your long-term plan. Your short-term goal is to raise the required matching funds in the designated time frame. Fundraising and prospect research is time-consuming and can seem overwhelming. RWJF has helped by breaking your goal down into pieces, which can make it feel more attainable. For example, you may need to raise a total of $500,000 in matching funds, but your short-term goal is to raise sufficient funds to secure RWJF funds for Year Three. As you move through Year Three, your goal is to raise the balance of $500,000 to secure your full RWJF grant award.
If you are in the position of needing to raise a large amount of money in a short amount of time, it is especially important for you to develop a short-term fundraising plan that will enable you to use your time wisely. The most effective use of your time will be to focus on identifying and cultivating a small number of prospects with significant means rather than trying to reach as many prospects as possible.
As you gain knowledge and experience, you can expand your fundraising plan to include more potential funders to raise the rest of your required match and continue the funding stream to build upon the work you do on Covering Kids & Families.
Step 1: Gain an understanding of the major types of funding.
It is important to have a basic understanding of why and how each of the major funding sources grants funding, as well as a basic process for determining if a specific potential funder is the right fit for your organization. Begin by gaining a basic understanding of the major sources of funding, including:
- Government grants
- Other nonprofits
- Major individual donors
- Other individual fundraising opportunities (direct mail, telemarketing, special events)
Each of the following Developing a Fundraising Plan sections has been developed so that the reader can use it independently of the others. For example, if you have experience raising money from foundations but would like to know more about corporate fundraising, you can focus on those sections that address researching and reaching out to businesses.
Step 2: Create a preliminary list of potential funders.
Once you have an understanding of fundraising from different sources, your next step is to create a preliminary list of possible funders for your CKF project. Start by listing potential funders that you know off the top of your head. It is also a good idea to brainstorm possible funders with your coalition members. Consider the following:
- What are the top health care companies (including not-for-profit hospitals) in your area that have a vested interest in the success of Medicaid and SCHIP? What are the companies that target the same consumers that CKF targets in its outreach? What are the corporations that have a demonstrated interest in children and family issues?
- What are the top foundations in your area that have demonstrated an interest in contributing to health, children and family issues?
- What are the appropriate agencies at the state and local levels that have the capacity to fund grants of this size?
- Do you have any major donor prospects on your board or coalition? Who are the top philanthropists in your area who have demonstrated an interest in contributing to health, children and family issues?
- What are the corporations, foundations or government agencies with which your board members are affiliated?
- Are there any alternative sources of funding (e.g., March of Dimes, United Way) available to your coalition?
- Are there any federated giving funds in your community you should consider?
- Who are the top elected officials who might champion this issue?
Step 3: Research your potential funders to refine and/or expand your list.
With your preliminary list in hand, you may need to do some additional research to determine additional prospects. Some ideas for finding additional prospects include:
- Corporations: Check with your local chamber of commerce
- Foundations: The Foundation Center (www.fdncenter.org)
- Government grants: Call your local elected officials or the officials who oversee Medicaid or SCHIP in your state
Step 4: Determine your best targets.
After developing your preliminary list, you will need to prioritize your targets. Your best targets are the ones that have the financial ability to contribute, interest in your work and some connection to you. The diagram that follows provides a visual representation of the process for identifying top prospects.
For each prospect, you will need to balance the issues of potential grant amount, interest and access with the amount of time required to cultivate the prospect (e.g., grant deadlines). Follow these steps to prioritize your list:
1. Rank your prospects by the potential grant amount. - If a prospect has the ability to provide you with 50 percent or more of your goal, it should be a top priority. A funder with the ability to contribute 25 percent or more of your goal should be a high priority. Keep in mind that the larger the prospective grant, the more time you should expect to devote to cultivating that gift.
2. Rank your prospects by the level of interest they may have in your CKF project. - If the type of work you do on Covering Kids & Families falls within the prospect's giving guidelines or interests, it is a good prospect, and its ranking on your priority list will be determined by the potential amount of the grant and your level of access to the funder. If your work does not fall within the prospect's giving guidelines, you will need to have a legitimate reason to believe that you could convince the funder to deviate from its guidelines or interests in order to include it on your target list.
3. Rank your prospects by the level of access you have to them. - You will need to balance the amount of time you devote to securing funds from prospects to which you have a close relationship with the potential size of the grant. If you do not have access, you will need to determine if the potential size of the grant merits the time it will take you to cultivate a relationship.