How to Create a Fund Development Plan

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Creating a fund development plan is an essential duty of the board of directors of any charitable organization. The primary responsibility for insuring that a charity has sufficient money to operate falls on the board. To meet this duty, the board must create a fund development plan. Any organization, for profit or nonprofit, must know where its income is coming from to survive. A fund development plan creates a map of what the organization needs to do to ensure its financial health.

Preparing to Develop the Plan

Recruit a board of directors that is not only able to give to the organization, but also is willing to give. Board members who will help you raise money are a lot of trouble if you are the executive director. They want to be involved. They want to help determine the direction of your organization. Many EDs don't like that, especially organization founders, but if you want to have a healthy bottom line, you have to have a strong board. Besides, a healthy board makes you more responsible as a director.

Develop or review the organization's mission statement. This is a short statement that tells why the organization exists and what it hopes to accomplish. Spend some time on this. Get professional help if you need it. The mission statement makes sure everyone in the organization from top to bottom is on the same page.

Develop a vision statement. This goes beyond the mission and outlines what the organization hopes to see happen as a result of its efforts. If you hope to reduce poverty in your community, say so. If your purpose is to keep kids off the street after school, then your vision is a community where latchkey kids and street gangs are a thing of the past. This is where you describe what you want the world to look like because of what you do.

Create an organizational chart and a flow chart describing the organization and how its work is done. Take a hard look at where money comes from and where it goes to, what programs exist, what they do and who they benefit.

Get a consultant to help or hire a development professional. These next steps in developing a fundraising plan require expertise in how nonprofit fundraising works. The development plan is too important to your organization's survival to leave it entirely to amateurs.

The Development Audit

Conduct an environmental scan. Look at other organizations with similar goals, of similar size and with similar missions. Find out how they raise funds and see if there are standard ways of fundraising for organizations like yours. Look at who donates to causes like yours and what ways they prefer to give.

Figure out what your present sources of donor income are. What foundation and government grants do you receive? Any other major funding? What do you receive from board members and local philanthropists? Are there any corporate sponsors or partners? Do you direct-mail?

Identify how much you make from your current fundraising activities like special events, direct mailing, annual campaigns, memberships and direct mail. Don't forget to include contracts your organization gets paid for.

Figure out what your funding goals are. How much of your annual operating budget must be raised in donations? What do you need for programs and buildings that aren't funded by current fundraising efforts?

Take a realistic look at whether your board is capable of setting financial goals that are beyond the basic budget. Are they willing to do the work? Do they understand the need for marketing and promotion in your budget plans?

Elements of the Fund Development Plan

Develop a case statement. A case statement tells people why they should support your organization. It includes a description of your organization, its history, the programs it offers, who it serves and why it's important that you be there to do what you do.
You'll need to include measurements of costs vs. the impact of the program on the people it serves. Illustrate that impact with statistics, photos, quotes from clients and endorsements from supporters. Stories are important to making your case. Describe new things you want to do and talk about why those things need to be done.
Show what your budget is and what it needs to be to fund new programs and facilities. Include pictures and drawings to illustrate your points and to help donors visualize the future of your organization.

Write a review describing what fundraising tools and personnel you have. Outline your donor database, what fundraising software you are using and what fundraising policies are in place. Take a look at who is raising money for you and how they are doing. Next develop a specific plan to determine if your fundraising database has the capacity to handle the fundraising tasks outlined in your new development plan. Develop new policies adequate to meet the needs of the expanded fundraising plan. This includes policies related to gift acceptance, risk management, authorization to approach donor prospects, timing of fundraising events, endowment funds, alcohol, gaming and donor recognition. Be certain that your software and record-keeping resources can handle the influx of information these activities will generate.

Create a public relations and communications plan that will support your fund development plan. The plan will outline what types of media will be engaged to support fundraising and marketing. It will address branding, promotion, Internet strategies and take a hard look at costs.

Write a plan outlining the types of fundraising you propose, the mix and timing of activities, dollar amount goals for each activity and who is responsible for each element of the mix.

Create a staffing plan for your fundraising efforts. Figure out what paid staff, volunteers and consultants you need to implement the plan and the cost of fully supporting those people. Write job descriptions, flow charts and organizational charts describing who does what and who reports to whom. Don't fantasize about celebrities who may suddenly join your fundraising efforts. Only include people you can realistically count on to help.


  • Never hire a fundraiser for a "cut" of the total amount raised. Make sure you have half your money committed before you even start a major fundraising campaign. Make sure you have enough sponsors to pay for your event BEFORE you host it. You never want a special event to lose money! Make sure you have good public relations planning, support and a "response to crisis" plan in place and active throughout the campaign. Nothing kills a fundraiser like bad press.


  • Get professional consulting help if you don't have an experienced development officer. Be realistic about your goals. You can't make the board do what it is unwilling to do. If they're not driving the fund development plan, it will fail! Do the research. Know what's a realistic goal and plan to reach those goals in a reasonable amount of time. Better a series of short successful campaigns than a long one that never reaches its target.