Let's Raise Some Money
Insights from Karen Climer about fundraising and nonprofit organizations

Two Things You Absolutely Must Have To Succeed

February 24th, 2014 by Karen Climer

Last week, I worked with a client on developing a fundraising plan.  This client is a small, fairly new nonprofit with a staff of one.  Apparently, the board president told the staff member, “You don’t really need to create an annual budget because if you don’t raise the money, then you just have to do fewer programs.”  Huh?!

This board president is a successful businessperson.  I’m quite confident that he does not run his own business that way.  What was he thinking?  Does he realize he has a legal obligation to exercise due care?

Yes, you absolutely need an annual plan and an annual budget.  By the way, both documents are necessary and both serve a similar purpose.  The plan is the prose version of what we are going to do this year – how we will get money and what we will spend it on.  The budget is the numbers version of how we will get the money and what we will spend it on.

Here are a few reasons you need a budget:

  • The vast majority of foundations will require it.  Most foundations believe that if you cannot figure out how much money you need in the next 12 months and what you will spend it on, then you probably cannot be trusted with a gift larger than one dollar.
  • It says, “We know what we are doing.”  The budget makes a strong statement about what the nonprofit expects to tackle in the next year.
  • It helps you prepare for emergencies.  Remember how many organizations were unprepared for the Recession a few years back?

Here are a few reasons you need a fundraising plan:

  •  It gives you a realistic picture.  It is very easy to say, “Let’s raise a million dollars this year.”  I suppose it’s possible for an angel to fly into the development director’s office with a million dollar check, but more likely you will have to do something to earn that million dollars.  Once you start figuring out exactly how you will raise that million dollars, you start to see exactly how much you can realistically raise this year, and what you need to do to reach that goal.
  • It keeps you focused.  It prevents you from going after the latest fundraising idea that some board member or volunteer comes up with.  (“I knew an organization that raised $5 million with a golf tournament…”)

If you have unlimited time and resources, you don’t need a fundraising plan or a budget.  However, if you are like every nonprofit I know of, you have scare time and resources and you want to allocate them appropriately to bring the greatest return.  That’s the purpose of a plan and a budget.

P.S. This client now has a budget and a fundraising plan and is on the path to fundraising success!

Posted in Planning

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