How Having a Strategic Plan Will Help You Raise Significantly More Money
If you’re like most nonprofit leaders, figuring out how to keep your organization financially stable is perhaps your biggest pain point, but having and effectively executing a strategic plan can help you raise significantly more money and ease that pain.
Over the years I’ve presented a basic fundraising concept that has resonated with nonprofit leaders. It's the powerful idea of appealing to your funder's heart and head.
Personal donors, foundations or granting agencies will write their first check to your organization because you appeal to their heart. Your mission — to help children, pursue social justice, teach the arts, etc. — is what they have a common passion for supporting.
However, for funders to write subsequent checks year after year, you’ll need to also appeal to their head. If you can demonstrate that your organization is well-run and will make the most of their money, then they’ll be happy to invest their philanthropic dollars with you over the long haul.
With that in mind, there is perhaps no better way of demonstrating your organizational competence than by sharing your strategic plan and your commitment to its execution. I have sat in on fundraising pitches where once the strategic plan is discussed, the funder became significantly more comfortable, and their questions shifted from “if” to “how much.”
A Clear Vision Raises Your Team’s Fundraising Focus
Fundraising is an energy game. If you and your team bring confidence and alignment to your fundraising efforts then your funders will feel that and will be more likely to donate.
A strong vision statement — a key component of a strategic plan — can catalyze your team’s energy and spur a donors’ gift.
In this excellent article by Mena Gainpaulsingh, the author highlights the benefit of a clear vision statement:
[Vision statements] help to create a picture in your donor’s mind of the dream state that you are constantly striving towards, and one that they, as donors, can also get behind. If you can demonstrate clearly how your work is always directed towards meeting that vision, donors can more easily understand how their funding can make a difference.
Further, simply having fundraising as a key focus on your organization’s strategic plan will help everyone on your team maintain focus on your fundraising objectives.
A Strategic Plan Can Differentiate Your Nonprofit
The fundraising firm Semple Bixel Associates wrote that having a strategic plan can help differentiate your nonprofit from others. This is especially true for capital campaigns:
For organizations about to embark on a campaign, having a strong strategic plan not only puts the organization in “the driver’s seat” — in terms of their future, it also gives them credibility and differentiates them from other organizations that do not have plans. …. Today’s donors, especially newcomer Baby Boomers and Generation Xers, insist on knowing the financial health, objectives and long-range goals of a nonprofit. Much like an investment, they are basing their decisions on sound business practices versus an emotional appeal.
Strategic Planning Helps An Organization Keep Its Promises
Returning to Gainpaulsingh’s article, she also tells the story of a donor who made a significant gift for an organization’s program that he cared deeply about. However, the program was cut a short while later without any warning or explanation for the donor.
This situation, essentially created by no or poor planning, led the donor to have doubts about the nonprofit. Had the organization been more careful or thoughtful in its planning, then this situation could have been avoided and the organization would establish a more trusting relationship with the donor.
Some Data to Back All of This Up
Perhaps you’re thinking that what I’m sharing makes sense, but is there any data to back it up?
In 2020, my team conducted a survey to learn more about any relationships between strategic planning and fundraising. We distributed this survey through our networks and gathered 169 responses from leaders of small nonprofits from six continents.
From our research, we concluded that:
- Having a strategic plan significantly increases fundraising success. 86% of respondents said that having a strategic plan had a positive impact on generating revenue through grants, donors, events, etc. And on average, between 36% and 45% of their nonprofits’ annual revenue was attributed to the presence of a strategic plan.
- Regularly tracking a strategic plan strongly correlates with generating revenue. Respondents that regularly reviewed, revised and measured their strategic plan were more than six times more likely to generate revenue as a result of their plan.
In summary, if you and your team don’t have a strategic plan that you’re able to reference and leverage in your fundraising efforts, then you’re missing out on one of the biggest levers you can push on to raise significantly more funds.
Eric Ryan has dedicated 25 years of his professional life to service. He is the co-founder of Mission Met, a company devoted to making strategic planning easier and more effective for nonprofit and organizational leaders around the world. Although he has focused on serving small nonprofits, Eric has also consulted with numerous corporations and government entities.
In addition to his consulting work, he has started one nonprofit, been an executive director, and served on several boards as both treasurer and board chair.
He led the creation of nonprofit strategic planning software, Mission Met Center, and is the author of "Mission Met: Proven Strategic Planning Guidance to Help You Build a Financially Secure and Impactful Nonprofit".