How To Create An Effective Fundraising Strategy: Ultimate Guide

Would you stay in a house with a weak foundation? Or assemble a piece of furniture with no instructions? An ineffective fundraising strategy will crumble down quicker than that. Solid and well-designed fundraising strategies serve as the backbone of your campaigns. Combine that with trusty fundraising tools, and you’re looking at a surefire recipe for maximizing donations.

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Article Roadmap

• What Is a Fundraising Strategy?
• How To Create a Fundraising Strategy
  • Evaluate Current Strategy and Past Campaigns
  • Do a SWOT Analysis
  • Define Your Existing Resources
  • Determine Goals and Gift Range Chart
  • Conduct Prospect Research
  • Choose Your Giving Tools
  • Tell a Compelling Story
  • Create a Great Marketing Strategy
  • Prioritize Donor Stewardship
  • Create an Action Plan
  • Identify and Track KPIs
• 10 Effective Fundraising Strategies for Nonprofits
• Next Steps

What Is a Fundraising Strategy?

A fundraising strategy is a plan that guides nonprofits through the campaign execution process. Fundraising strategies vary according to the size and financial goals of the charity planning them.

But one thing they all need to have in common is that they should be thorough, detailed and explicit. They’re often written on a document and shared with all the concerned stakeholders, including your staff, board members, volunteers and the public.

Why do nonprofits need a fundraising strategy?

Because a well-thought-out fundraising strategy will:

• Give a clear idea of your goals and objectives
• Provide team members with responsibilities they need to fulfill
• Serve as a foundation for campaigns
• Act as a resource when the project gets off track

How To Create a Fundraising Strategy

Crafting a successful fundraising strategy requires a thoughtful blend of vision and practicality, aligning organizational goals with donor engagement to maximize impact and financial support.

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1. Evaluate Your Current Strategy and Past Campaigns

The best way to build a targeted fundraising strategy is to evaluate your present one. If you don’t have a formal pan, look at your past campaign performance and spending.

Review your fundraising data and note metrics like email open and donor retention rates. You can use fundraising software during this process to create reports and identify trends in your data.

Maybe you’ll realize that your website draws in donors, but your social media doesn’t garner enough engagement. Or your last year’s silent auction raised the most annual donations, indicating that you should focus on big-scale events.

Your nonprofit can benefit from a third-party perspective during this process. A dedicated fundraising consultant will assess your organization with a fresh pair of eyes and suggest techniques to make it more robust.

2. Do a SWOT Analysis

SWOT (strengths, weaknesses, opportunities and threats) analysis is an evaluation tool that gives great insight into your charity’s strengths and overall health. It makes you understand where your strategies will succeed and the areas where they may fall short.

The SWOT method considers internal factors (strengths and weaknesses) and external concerns (opportunities and threats) and helps you identify areas for growth.

You can use the following template to get started:

Strengths:

• Which fundraising methods have shown us consistent success?
• Which marketing channels do we perform well in?
• What are our strongest funding sources?
• What gives us an edge over other nonprofits?
• What unique talents do our staff and volunteers have?

Weaknesses:

• Which area continues to be a concern for us?
• Are we setting goals that are too low?
• Were there ever communication gaps between leadership and staff? How effectively did we resolve them?
• Do we need specialized technology or resources to see improvement in certain areas?

Opportunities:

• Do we accept multiple payment options?
• Does our team have dedicated prospect research tools?
• What are some marketing strategies we can explore?
• Are we going to get marketing materials in-house or from independent contractors?
• Should we get fundraising plan templates for a quicker and more efficient planning process?
• Are our campaigns optimized for various audiences and channels like mobile and social media?

Threats:

• What are some factors that have delayed our campaign execution in the past?
• Are there similar organizations competing for the same funding sources?
• How will the economy and recession predictions affect our nonprofit?
• Are there any policy changes that can hinder the donor communication process?

3. Define Your Existing Resources

You can’t play with the cards you’re dealt if you’re unsure what your cards are. Strategize goals in terms of the availability and limitations of your resources. Consider your:

Budget: Draw up a budget plan, prioritize spending according to tasks and leave room for any last-minute expenses that may come up. Are there any limitations you need to think about before going ahead? You also need to roughly estimate how long certain activities will take — after all, time is money, too!

Staff: How many staff members do you have on board to execute what you have in mind? Are there enough people to help with specialized tasks? Consider recruiting volunteers — a great way to include the community and get extra hands on deck.

Technology: What current system are you using to handle data, donors, finances and tasks? A fundraising CRM or a dedicated database can save a ton of time through automation and free up your staff to focus on more important campaign-related activities. Systems for project management, event planning, social media scheduling and email marketing are some other things you can consider.

Inventory: Get a clear idea of your assets and constraints. If you’re hosting special theme-based fundraisers, consider what items you need and where you can source them from.

A thorough analysis of your resources can help you leverage them and optimize your budget spending.

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4. Determine Goals and Create a Gift Range Chart

The next step is to set a fundraising goal. We know it’s easier said than done. Where do you even start, and what exactly do you do?

Think about fundraising goals you want to achieve in the next year. Even better, consider how you want the nonprofit to progress in the next five years. Be as specific and detailed as possible. Now, pick one of the goals as a starting point and base your fundraising strategy around it. Your goal should fall into one of three categories — donor retention, donor acquisition or upgrading new donors.

Next, narrow down on things like:

• What type of campaign will it be? Suppose you want to retain your current donors. To do that, you need to make them feel valued and show that their contributions matter. You can make a personalized email campaign to let givers know how their funds are making a difference and send a video where beneficiaries thank them.
• How much are you planning to raise? Consider your past campaign performance and make a realistic target. But don’t be afraid to push yourself a little — the key is balance — aim for ambitious but achievable goals.
• Who will be involved in what? Determine which staff members will work on which part of the campaign and how many people and volunteers each committee will need. Consider your staff’s time. Maybe they’re busy with ongoing projects, or your volunteers can’t dedicate time during month’s end because of their workplace tasks.
• When will each campaign take place? It’s human nature to wait till the last minute to get things done. That’s why giving yourself a set of deadlines for every step in the strategy is key. A fundraising calendar will give you structure and help staff and volunteers be on the same page with the same expectations.

It can be overwhelming to get started, but remember that it doesn’t need to be perfect right away. Start somewhere (anywhere) and build from there. Once you’ve set your financial goals, make a gift range chart. Decide the number and size of gifts and how many prospects you’ll need to provide them.

5. Conduct Prospect Research

Prospect research is the process of identifying major or mid-tier donors who have both the capacity and interest to give. For that, you need external data sets such as nonprofit annual reports or sites like LinkedIn and internal datasets like donor management software. Therefore, before you start this step, it’s best to clean your database so it’s relevant and accurate. Look out for:

• Outdated or incorrect information
• Duplicate profiles
• Inactive accounts

Data hygiene practices ensure your efforts don’t get hampered because your marketing materials reach the wrong or inactive emails or home addresses.

Next, get started with prospect research and look for wealth indicators like:

• Real estate ownership
• Size of past charitable gifts
• Political contributions
• Prominent personal or professional connections

And affinity indicators such as:

• A history of giving to your nonprofit or similar organizations
• Person’s age, gender and other demographic details that have a connection to your cause
• Involvement as a volunteer or board member

While you can do this process independently, we recommend hiring prospect research consultants to plan your major gift strategies.

6. Choose Your Giving Tools

Nobody likes waiting and inconveniences, and neither will your donors. While marketing materials encourage people to give, you should do everything in your power to make giving easy. The donation form shouldn’t be too complicated or glitchy, or it might hold donors back.

To make a great donation form, you need a great fundraising platform. This is why investing time and money in one that tracks performance, gathers event donations and manages campaigns is critical.

Give your givers an optimal donation experience by:

• Including CTAs throughout your web page to your donation form
• Asking only essential information and marking the rest as optional (keep it short and sweet)
• Making sure the form is mobile-optimized
• Using links to the donation form in marketing materials
• Testing out the donation page before the campaign begins

You should also retest and check your giving tools during the campaign. It ensures you don’t lose out on donations due to givers finding your resources difficult to navigate.

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7. Tell a Compelling Story

It isn’t enough what your beneficiary’s story is; it also matters how it’s told. Here are some tips to leverage the art of storytelling and use it to maximize your impact:

Find the Human Element

We all face a psychological phenomenon called psychic numbing. This means when the number of people suffering due to an issue increases, our ability to empathize with them decreases. In a nutshell, we don’t respond to numbers. But we thrive on stories due to their singular focus on a subject.

Identify and name your beneficiaries. Instead of saying, “You can help 1,000 flood victims”, say, “Your donation can help Ayesha build a home for herself again.”

Have Conflict and Resolution

Make sure the story has a beginning, middle and end or — build-up, conflict and resolution. Stories with an arc are satisfactory to read, and they engage your donors on a personal level.

For example, Ayesha had saved her hard-earned money for five years and built her own home (build-up). Unfortunately, the flood took away this comfort and safety she worked to build and left her devastated (conflict). But with our generous donors’ help, Ayesha got her life back on track and put a roof over her children’s heads again (resolution).

Embrace the Power of Details

Details make the story come alive. It comes back to the advice of “show, don’t tell,” and that’s exactly what you need to do. Show readers what Ayesha felt that day and how she’s coping now.

How all-consuming was the flood? How terrifying was the whole experience? Use colors and shapes, evoke visuals through words, and name the emotions.

Use Pictures and Videos

Tap into your donors’ emotions with pictures and videos that capture what the story is truly about. For example, you can include visuals of how the flood wreaked havoc and the debris it left behind and use before and after pictures so readers can really see the loss.

8. Create a Great Marketing Strategy

Once you’ve written your stories, you must assess which mediums you’ll use to convey them. This is where marketing comes in. But before that, it’s important to segment donors.

Donor segmentation is as necessary as separating your laundry into colors and whites. Try and target everything at once, and it becomes a big ol’ mess! Separating your donor base into different categories makes personalizing communications and prioritizing their needs easier. The most common method is to segment based on gift amount.

You can divide your donors into three major categories — major, mid-level and minor. After categorizing your givers, you can focus on creating targeted marketing materials. Here are some tips to keep in mind:

• Use a multi-channel approach: Every donor has a communication preference, and you can target various demographics using this method. Older people might like direct mail or email, whereas younger people prefer social media posts. You can also use brochures, website campaign pages, press releases, and print, TV, radio and digital ads.
• Focus on channels you already use: Instead of jumping on the latest social media platforms, use the ones you already have an established presence in. Pick 2 to 3 channels that have proved best for you in the past and start being more active on them. You can engage with followers, reply to their queries and design tailored campaigns for each social media platform.
• Create well-designed marketing materials: Make sure your marketing materials have the same style guide as the rest of your brand, including logo, colors, fonts and tone. Graphic design best practices like creating a content hierarchy and not having too many design elements in one place are also beneficial.

9. Prioritize Donor Stewardship

It’s well-known that retaining donors is much more cost-effective than acquiring new givers in the long run. Donor stewardship helps by nurturing long-lasting donor relationships and boosting retention rates.

Appreciating your donors will make them feel valued and motivate them to continue supporting you. You can send thank you emails, gift baskets, handwritten notes or social media shoutouts to express gratitude. Ensure your appreciation is proportional to the gift size, as sending your major donors a one-line thank you email will rub them the wrong way.

Keep in touch with donors through periodic updates, not just about the campaign they contributed to but also about your organization’s broader initiatives and successes. You can also offer them a more active part in your campaign by inviting them to volunteer for the cause.

10. Create an Action Plan

It’s time to fine-tune your goals and create a campaign roadmap to guide your nonprofit. When in doubt and in need of help in the future, you should always fall back on this plan. It should include everything we’ve talked about till now:

• Past campaign performance
• Goals
• Gift range chart
• Budget
• Logistics
• Fundraising calendar
• Prospect research
• Campaign stories
• Marketing channels
• Donor stewardship strategies

11. Identify and Track KPIs

Has your organization been doing well since you changed your fundraising strategy? Are you on track to meet your financial goals?

It’ll be difficult to answer these questions without tracking performance metrics, leaving your nonprofit confused and in the dark. To enjoy valuable data insights, you can monitor:

• Donor retention rate
• Average donation size
• Email open and click-through rate
• Social media impressions
• Donor acquisition rate
• Event attendance rate
• Number of recurring donors

Again, this is a great opportunity to meet with fundraising consultants. They can help you decide which performance indicators you should be evaluating. You can also look at your data analysis and reporting capabilities to not only track these metrics properly but also visualize data in a way everyone understands.

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Fundraising Strategies for Nonprofits

In this section, we’ll cover some fundraising techniques that can take your campaign execution to the next level:

Focus On Small Donors

Yes, we understand it’s tempting to rely on major donors. However, always going for the big fish in the pond won’t work. What if one of your major donors changes their mind and stops contributing? It’ll leave your nonprofit helter skelter trying to fill the gap they left.

It’s much more sustainable to focus on small donors. They’re likely to be made up of people passionate about the cause, and small donations add up over time, making minor givers a valuable demographic to target.

Use Social Proof To Increase Donor Confidence

Social proof, the psychological phenomenon where people conform to the actions of others, can be a powerful tool in fundraising. You can feature testimonials from past donors or beneficiaries on your campaign page. When people see that others have supported your cause and experienced tangible outcomes, they’re more likely to donate.

Make sure to highlight any partnerships or endorsements from recognized organizations or public figures. Such acknowledgment can make your campaign more credible and attract a broader audience.

Build a Branded Donation Page

Your donation page is the foundation of all of your online fundraising efforts. Make the donation page recognizable and unique so people instantly understand it’s from your nonprofit. Branded donation pages also help make your nonprofit look credible and trustworthy.

For maximum effectiveness, they should be simple and mobile-accessible, ask minimal questions, accept multiple types of payments, and have monthly giving options.

Provide Suggested Donation Amounts

Often, your donors, especially new ones, may not be sure how much to donate or what you expect from them. By providing suggested donation amounts, you can reduce their decision fatigue and encourage them to give more than they would have.

Try One of These 44 Fundraising Ideas

There are so many events a nonprofit could possibly do. How do you come up with a unique idea that’s both feasible and engaging to donors? Don’t fret; we’ve got you covered. Check out our compiled list of unique fundraising ideas, where we break down ideas for schools and colleges, virtual events, budget-friendly fundraisers, and more.

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Demonstrate the Impact

Let your givers know how their funds are making a difference. If you’re raising money for an animal welfare project, they should hear it from the horse’s mouth. Well, not literally. We mean from beneficiaries — send pictures and videos of beneficiaries thanking donors and telling them how their funds have helped.

When givers feel like their funds are making an impact, they’re more likely to keep donating for future projects. You can also create annual impact reports, documenting all the good that your nonprofit has done in the past year.

Run Personalized Social Media Ads

Just like you won’t use the same ingredients to make every dish, you can’t use a blanket advertisement for all your donors. Segmenting donors is easier now than ever, with nonprofit CRMs taking on the lion’s share of the work. You can hyper-target different giver segments on Facebook and Instagram using ads.

The more someone interacts with your brand, the more personalized the ad becomes. Suppose they click on your website but don’t end up donating. The next time they open social media, they’ll see your ad — reminding them to finish what they started.

Don’t Forget Traditional Media

While younger donor segments prefer social media and digital channels, older people still prefer direct mail. You should adopt a multi-channel approach, as choosing one or the other limits your potential donors.

Brochures, flyers and print ads are other traditional media to explore. Combining online and offline marketing materials will yield the best results.

Spend 10 Minutes per Day on Each Social Media Platform

As a nonprofit, you have a million things to worry about, events to plan and hectic campaigns to execute. However, it’s important not to skip updating your social media presence.

With as little as 10 minutes per day, you can upload stories, reply to comments and DMs, and engage with followers. These small daily increments of time will pay off in the long run and strengthen your relationship with new and existing givers.

Use Short-Form Video Content

A picture is worth a thousand words, so you can imagine how much a video will be worth. Short-form content has the potential to go viral and spread your nonprofit’s story across the world with minimal expenses.

Post videos under 90 seconds with captions (as many people use their social media with sound off). Be sure to include a clear CTA or “donate now” info at the end.

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Next Steps

Out of everything you’ll need for a successful campaign, a great fundraising strategy is the primary one, as it acts like the campaign roadmap. A close second is a fundraising solution that helps identify donor trends and automates repetitive tasks, freeing up time so you can focus on important fundraising activities.

But how do you find a solution out of hundreds in the market? We get that it’s overwhelming to comb through so many options and cut through the marketing hype. That’s why we’ve made a free, interactive comparison report to help simplify and speed up your search. It includes in-depth data from our analyst team so you can pinpoint the products that best meet your needs.

Which fundraising strategy did you like the most and plan to use in the future? Let us know in the comments below!