Tag Archives: fund development plan

12 things to consider before you start a nonprofit

Thik OUtside the BoxThe nonprofit sector is diverse and innovative. People are always creating solutions to the many challenges that arise. We see a problem and seek to fix it. We experience something wonderful and we want others to share in our joy. There are two ways that nonprofits are different from for profit organizations: most nonprofits seek contributions from others as a form of revenue, and board members or trustees do not benefit financially.

Nonprofits are often referred to as 501(c)(3) organizations. This is in reference to the IRS tax code that defines an organization as tax-exempt. Here’s what the IRS says:

“The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals.  The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.”

“The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization’s net earnings may inure to the benefit of any private shareholder or individual.”

Before you file for 501(c)(3) status we suggest you take the time to answer the following:

  1. What are the goals, vision and mission of the proposed nonprofit?
  2. Have you done the necessary research to determine if there is a need for the proposed nonprofit?
  3. Who will your nonprofit serve?
  4. Do you have community buy-in?
  5. What type of people will you need to serve on the board? Have you identified specific people who fit your criteria? Have you talked with them about your idea and their willingness to serve on the board?
  6. How will you secure the funds you need to launch and sustain your organization? Who will you solicit? How will you secure their financial support?
  7. Do you have a business plan, strategic plan and fundraising plan?
  8. Are there organizations providing similar services?
  9. What will be unique about the nonprofit?
  10. Is your nonprofit a profit making business that has “gone bad?” Is it an unsuccessful business that you want to sustain with a different tax status?
  11. Have you created a case for support that clearly communicates your vision, fundraising goals and projected impact?
  12. Do you need to obtain nonprofit status in order to bring your vision to life? Could you become a program of an existing nonprofit?

Take your time: your community is worth it.

Image courtesy of Master isolated images at FreeDigitalPhotos.net

Mel and Pearl Shaw are the authors of “Prerequisites for Fundraising Success” and “The Fundraiser’s Guide to Soliciting Gifts.” They provide fundraising counsel to nonprofits. Visit them at www.saadandshaw.com. Follow them on Twitter: @saadshaw.

 

How to create a fundraising plan

Fundraising PlanThe fundraising plan is at the core of successful fundraising. But what exactly is a fundraising plan? Is it a spreadsheet? A list of activities? A list of potential donors and funders? Our answer: it’s this and so much more.

Here are four things to consider when creating your fundraising plan.

First, your fundraising plan should be rooted in your strategic plan. The strategic plan sets the direction for your organization, and the fund development plan guides your fundraising activities so the resources needed to implement the strategic plan are available. Your fund development plan should be created as part of the strategic planning process, or as quickly thereafter as possible. Your fundraising goal should be drawn from the strategic plan. This is the core of your fundraising plan: how much do you need to raise, how will the funds be used, and what impact will result. If your strategic plan does not include financial projections, then you must put pen-to-paper and figure out your projected costs. You have to know what you are raising money for and how much it will cost in order to create an effective fundraising plan.

Second, include an initial version of the case for support. This document is a primary communication piece that focuses your fundraising. Use the projections and information mentioned above to clearly and concisely communicate your fundraising story. Use facts and figures, projected impact, and emotion to make your case to individuals, foundations, corporations and/or government agencies.

Third, define your campaign structure and roles and responsibilities. Your plan must include roles and responsibilities for staff and volunteers so everyone knows what they are responsible for and can hold each other responsible. These can be used when recruiting volunteers: they let people know what specifically you need help with.

Fourth, create fundraising activity chart. This is the “heart” of the plan. It should cover a two-to-three year period, broken down into quarters. The chart should communicate actions to be taken, person responsible, projected outcome, and time frame. It must include the key fundraising tasks of identifying, cultivating, soliciting, and stewarding current and prospective donors. It should be reviewed and refined each quarter.

For example, if your nonprofit seeks major gifts your activity chart should communicate who is responsible for cultivating which donors, and when the cultivation and solicitation activities should take place. Don’t save everything for the 4th quarter. Likewise, special event fundraising should begin a year in advance.

Your fundraising plan should cover two-to-three years, be easy-to-read and understand, and become your go-to source for all things fundraising. Be sure to include a budget – what you project it will cost you to meet your fundraising goal. Remember to use your plan as a constant reference. Let it guide your progress and inform your adjustments.

Related resources

1.     How will you fund your strategic plan

2.     Vision, mission and fundraising

3.     To hire or to plan, which comes first

Image courtesy of Mister GC at FreeDigitalPhotos.net

Mel and Pearl Shaw are the authors of “Prerequisites for Fundraising Success” and “The Fundraiser’s Guide to Soliciting Gifts.” They provide fundraising counsel to nonprofits. Visit them at www.saadandshaw.com. Follow them on Twitter: @saadshaw.