7 Mistakes in Your Nonprofit's Fundraising Plan

I can’t tell you how often I hear nonprofit leaders complain about how difficult it is to raise money, how tired they are of banging their heads against the wall, how difficult this economy is. Well, there really is a better way. And it starts with a really good money plan for your organization. But again and again I see the same mistakes being made in nonprofit fundraising plans.

Here are the seven mistakes to avoid in your fundraising plan:

1. Not having a plan at all
Yeah, not even having a plan is a huge mistake. It boggles my mind how many nonprofit organizations expect that money will magically appear at their doorsteps. It takes an overall money strategy, what I call a financing plan, to effectively marshal your resources (staff, board, other volunteers, technology, materials) so enough, and the right kind of, money comes in the door to achieve your goals.

2. Creating just a one-year plan
You cannot expect to create a financially sustainable organization if you only plan for money one year at a time. Your financing plan should project at least three years into the future in order to ensure that you have sound financial footing from which to operate. A true financial strategy takes a long view and plans accordingly.

3. Including only private dollars
Your money strategy must include all sources of money flowing to your organization, making it a financing plan. You cannot just plan for individual, corporate and foundation dollars. You also must plan for how government and earned income sources will flow, if they are appropriate to your model. And if you don’t have other sources of money beyond private dollars, you probably need to at least explore whether diversifying makes sense for your organization.

4. Not connecting it to your strategic plan
OK, I’m going to assume that your nonprofit has a strategic plan, even though many nonprofits don’t or have a poor one. But once you have a strategic plan in place, you have to connect your money strategy to that plan. What good is it to have lofty program goals if you have no idea what those goals will cost (expenses) and how you will raise the money to make them a reality (revenue)? You must have a multiyear financing plan that directly relates to your multiyear strategic plan.


5. Ignoring capital goals
You can’t just raise revenue (the day-to-day money to keep the organization going). You also probably need capital (the money to build infrastructure, technology, systems) once in a while. If you don’t include dollar goals for the amount of capacity capital your nonprofit needs, you probably will ever raise it. You cannot continue to operate with infrastructure, staffing, technology and systems that are inferior to your needs and goals. Determine how much capacity capital you need, and include those goals in your financing plan.

6. Not giving your board a role
You cannot leave the burden of raising money solely on the shoulders of your staff. One of the key responsibilities of a nonprofit board of directors is to ensure the financial viability of the organization. So this means that the board as a whole and each individual board member must understand and play a role in the money strategy of the organization. So start by requiring each board member to give and/or get a certain amount (usually your major donor level), and then make sure your board “money committee” is active and engaged. Finally, integrate money into every meeting and conversation your board has. Money must be top-of-mind for the entire board.

7. Not focusing on high-return activities
Some fundraising plans include activities that a nonprofit has always done to bring money in the door without analyzing their effectiveness or expanding into new or more profitable activities. Start by analyzing the return of every money-raising activity you engage in, and then focus your money strategy on those that actually have positive returns.

I would love to see more nonprofits create smart, long-term financing plans for their organizations. Because the reality is that those that do so will create more sustainable social change.

Nell Edgington is president of Social Velocity.