Why Your Nonprofit Needs a Development Plan

A blueprint for a house. A map to get from point A to point B. A schematic for installing a koi pond in your backyard. Directions for how to assemble the 8,000 pieces of your IKEA dining room table (don’t worry about that one left over piece…). If you want to do something right, you generally follow a plan.

You wouldn’t leave your house and drive your car aimlessly hoping you’d eventually find your great aunt Marge’s house in Tucson, even though you’ve never even been to Arizona. So as a nonprofit professional or volunteer, why would you just start doing random things to try to raise money for your organization and hope that the outcome is enough money?

I like the wise though somewhat snarky quote, “Hope is not a strategy.” A successful company or an organization within the independent sector needs a strategic plan, so does a development department within a nonprofit. If your organization doesn’t have a development person, let alone a whole department, then the responsibility of creating a development plan falls to the CEO and the board.

What is a development plan exactly? It is basically a map or a blueprint of how you will get to your ultimate goal. What needs to happen first? You guessed it—you need to identify your organizational and fund development needs and goals. We won’t address organizational strategic plans here, but it is important to note that everything in your development plan should be in alignment with the organization’s strategic plan.

Let’s say your organization has determined it has a $500,000 break-even budget. That is what it needs to deliver promised services, pay staff, insure the board of directors and keep the lights on. Now it is time to decide what components of fundraising you will need to do in order to raise the $500,000 in the appropriate timeframe.

The first thing most people will say is, “We need to host a fundraising event!” Sometimes fundraising events make sense, but there are other aspects of fund development that generally have a higher return on investment. Your development plan should:

• Identify goals (both financial and departmental).
• Outline what activities will be undertaken to reach the goals, with dollar amounts assigned to each activity/category.
  • Possibilities include things like: A board of director’s campaign, direct mail, a major-gifts program, an annual appeal, corporate giving, third-party fundraising, online appeals, grants, and yes, events.
• Assign the main responsible party for each area/category (partially for accountability and partially to determine if there are enough human capital resources to accomplish the activities outlined in the plan)
• Include timeframes if appropriate.

Each of those sections may “drill down” to a few more sections. For example, under direct mail, you may define a plan to send four direct-mail pieces per year; under events, you may highlight a plan to host one major event and one gathering in a board member’s home.

A development plan should not drill down to any further detail than this because further delineation becomes tactical in nature and should then be part of a project plan. It makes sense to do a project plan for each area of your development plan as a separate but related document. I call them “roll-up” documents because everything in them “rolls up” into the bigger picture in the next plan.

Image via Vanderneck

Is all this planning worth it? Yes! Let’s go back to the analogy of driving to great aunt Marge’s house. It may take you 20 minutes to look up directions and decide which way you want to go. But that 20 minutes could save hours or days driving around lost—which in turn saves gas money, missed time with family and a headache in general. Worth it? I’d say so.

Development plans are the same; some time spent on the front end can save time in the long run and keep you on track. If your board is at all involved in creating the plan or approving it (they should definitely be approving it), it helps secure their buy-in, so the board feels as invested as you do in working the plan. And it makes the board members feel secure in the fact that there is an actionable plan in place to help ensure their success as leaders of the organization.

Now, some would say my description of a development plan is backwards. That school of thought is not a bad one—it starts with the idea that goals should be made from concrete information on the organization’s current capacity for fundraising. Meaning, take a look at your donors; evaluate what you know, what your fundraising history has been, what staff resources you have along with that staff’s capacity to add additional work; and set your goal from there. Then if that number is lower than what the organization needs to run programs, you have to cut back somewhere. If it is higher than your budgeted number, you can expand.

A good process to solidify goals is probably somewhere in between the two methods I described. It does the organization no good to set a goal at $500,000 if it has the capacity to raise just $350,000. You would be setting yourself up to always fall short.

It makes sense for both the profit side (development) and the cost side (programs) of the organization to be involved in the goal-setting process, so that need can be married to capacity and an attainable goal can be set (yes, I can hear the CEOs out there saying, “What about STRETCH goals?!”).

Whatever method your organization uses to set goals, the development plan is an important component of reaching those goals. And it is a great tool to use periodically throughout the year to evaluate your activities to make sure they are in line with your development plan, and thus with the strategic goals of the organization. This will help you spend your time and resources in the “right” areas—keeping you from applying the shotgun approach of trying anything that comes along to see if it works.

Good luck mapping your plan! You’ll be glad you did.