13 Essential Ingredients for Fundraising: A Checklist
Nonprofit fundraising can seem complicated, especially if you’re just getting started. Finding prospects, honing your pitch, making asks. Not to mention organizing financials and follow-ups. Plus, every time you look around, it feels like there’s new information, best practices, software and other innovations you should be using. It can quickly get overwhelming.
In practical terms, though, fundraising is simple. And I’m here to explain how.
The Three Elements of Successful Fundraising
At its core, nonprofit fundraising comes down to three things: The Pitch, the Platform, and the People.
The Pitch is what you say to get someone to give. It involves your mission and goals, your case for support, and storytelling to bring your work to life.
The Platform is the means by which the money is solicited. It can include a handwritten letter or peer-to-peer fundraising software.
The People are the individuals doing the asking. Normally this is your executive director, your development director, or your board.
Your first job as a fundraiser is to make sure you have all three elements in place. To help you pull the pieces together, I’ve created an essential fundraising checklist. Before you start trying to raise money, make sure you have all these ingredients in place.
Essential Fundraising Checklist
Crafting Your Pitch
The first items on your fundraising checklist are designed to help you define and explain what your organization does and why. And, of course, why donors should support it. That means you will need the following:
Mission Statement: At the heart of every nonprofit organization is its mission. So you’ll want to start by crafting a strong, well-defined, and compelling mission statement. Your organization’s mission should be broad enough to appeal to a wide array of funders but narrow enough to still be meaningful and strategic.
Demonstrated Need: As part of honing your mission statement, you want to make sure your organization will meet an actual need for your target audience, constituency, or community. Conduct research to document current needs, map other organizations serving the same community and get clear on how your organization will fill an important gap. This step is critical. Sometimes we think our organization solves a problem, but the community doesn’t agree.
Unique Value Add: It’s important to know what other companies, nonprofits, or government agencies are addressing the same problem you aim to solve. Be prepared to justify why your organization is still needed instead of joining forces with someone else. There is a lot of duplication in the nonprofit sector, and you don’t want your organization to be part of the problem. Learn how to create a Unique Value Proposition for your nonprofit.
Case for Support: Prepare your case for support. This will include a statement of need and why your organization is uniquely suited to meet that need. Your case statement should be compelling and concise. You’ll want to hone it in both written and verbal forms. Make sure it resonates with people who are unfamiliar with your work and those who may have been involved in related efforts for many years.
Honed Verbal Pitch: Your verbal pitch will become one of the most valuable tools in your fundraising toolbox. Be able to connect all of the elements above together: mission, need, value-add, and case for support. Make sure your annual goals are clearly connected to each of these areas.
Then practice, practice, practice. The more practice you have speaking your verbal pitch, the better you’ll be at raising money. You’ll also want to make sure your board and staff understand this pitch too–and ideally can articulate it.
These are just bare-bones essential ingredients. Everything else is for convenience, scale, speed, efficiency, handling complexity, etc. But 90% of all organizations could get by on these basic elements.
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Securing Your Platform
The second part of your fundraising checklist is all about the backend and making sure you have the logistics covered. How will you accept donations? What kind of donations can you accept? Are you prepared to comply with various IRS rules?
Tax-Exempt Status: Do you have tax-exempt status? Being approved by the IRS as a 501(c)(3) organization will help you with individuals, grants, and corporate giving. For fundraising purposes, tax-exempt status means donors will receive a tax exemption for contributions made to your organization. Without this designation, it may be hard to scale. Some causes and organizations have raised money without tax exemption, but I still believe it is essential in most situations. If your organization doesn’t have tax-exempt status, such as if you’re just starting a new nonprofit, you can also consider using a fiscal sponsor.
Data and Financial Management: You will need to be able to track both incoming contributions (date, amount, method, name of donor, etc.) and outgoing payments. This means you’ll need both bookkeeping software for compliance and financial management, and fundraising software to track more detailed information about incoming gifts. Luckily, today some companies offer integrated cloud-based systems that can minimize duplicate data entry.
Payment Tools: Online fundraising and payments is becoming increasingly essential. You’ll need a bank account and a way of receiving money online. This can be through a website, Facebook, a PayPal account, or some simple mechanism. You should be able to link this function to your organization’s bank account.
Gift Acknowledgment: The IRS and some states may require that you offer receipts of donations over a certain size. Organizations often choose to craft a standard thank you or acknowledgment letter that includes the gift amount, tax deductibility statement, and information about the organization or program donors are contributing to. For online donations, this can often be automated as part of the standard email receipt. This is especially helpful if you’re launching a monthly sustainer program.
Activating Your People
The final part of your fundraising checklist is all about the people. Who are you going to ask for money? And who will be doing the asking? Remember, nonprofit leaders don’t have to go it alone. In fact, the more you create a culture of fundraising at your organization, the stronger your fundraising will become.
Development Plan: A development plan is a map for how you’re going to raise your organization’s budget for a given year. Generally presented as a written document and/or spreadsheet, a development plan describes your annual fundraising goals, often by revenue stream, and the actions required to meet those goals. For example, this could include an annual gala, year-end appeals, a certain number of meetings with major donors, etc.
Prospect List: This is a list of your prospects–the individuals and institutions you plan to solicit for gifts. If you don’t have a list, don’t fret. You can build a list through prospect research. If you don’t want to build a list of individuals, you will still need a list of foundations, companies, or government offices that provide funding.
Board Giving Policy: You should have a “give or get” policy that requires your board to fundraise. This means each board member needs to either give a certain amount or raise a certain amount. Make sure to bake the policy into your board agreement so that expectations are clear up front. (Check out my course).
Board Fundraising Plan: In addition to their “give or get,” board members should also serve as part of your fundraising team. If you’re not sure where to start, our board fundraising worksheet can help.
Fundraising Checklist Next Steps
The thirteen items above are just bare-bones essential ingredients for nonprofit fundraising. As your organization develops, you can start to add other tools that help with scale, speed, efficiency, handling complexity, etc. But successful organizations always start with the basics: hone your pitch, build your platform, and activate your people.
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