Elevate Your Impact, Achieve Your Mission

The challenges of securing donations are daunting. Building relationships and making compelling asks are important, but they're only part of the equation. With so many organizations vying for the same pool of funds, it's critical to have a solid strategy in place before launching into fundraising.

It's easy to jump right into prioritizing donor lists and setting appointments.  The problem is that your chances of successfully securing the gift you need from your donor prospects are greatly reduced if you have not laid the required foundation.  Before you start asking for donations, make sure that you have these five essential fundamentals in place.  These key components can significantly increase your chances of success and secure the funding your organization needs to thrive.

Five Fundamentals to Master Before Fundraising

1. A Concise and Compelling Mission and Vision

With the level of competition for faith-based nonprofit giving, you will need a concise and compelling vision that captivates your donor's attention by describing the difference their gift will First, faith-based nonprofit organizations need to develop a powerful and strategic vision and mission statement. 

  • Mission statement:  It defines your purpose and why you exist. It should be short and easy to remember. For example, at Horizons Nonprofit our mission is to Guide Faith-Based Nonprofits to Long-Term Sustainability.  Not included in your mission statement, but fundamental to how your board, staff, and volunteers understand it, are your values and core beliefs.
  • Vision statement: What you hope to achieve in the future and defines your aspirations.

Do not use the mission statement as the vision statement. You need one mission statement and one vision statement. They work together to inform your decisions and to tell people why they should support your organization.  

Without a vision and mission statement, you will not get very far when it comes to fundraising. This is a core component of effective fundraising. 

2. Financial Transparency and Sustainability 

With a solid vision and mission statement established it is time to turn to your finances. 

Donors and foundations are more likely to fund nonprofits if they understand the organization's financial position. Do you have sound financial management policies, including internal controls to ensure accountability? Make sure your finances are accurate. Use an independent auditor if needed, then publish and distribute your financial statements for anyone to view.

Elements of Successful Financial Transparency

  • Charity Ratings: These charity rating organizations use different metrics to calculate how trustworthy your organization ranks.  
  • Audited Financial Statements: Independent audits are mandatory for organizations that spend more than $750,000 in federal funds, but states, foundations and bank will all have their own requirements, for instance, many states require nonprofit organizations to have an independent audit conducted if they solicit funds from their state's residents. It is important you know the requirements and abide by them.  A good resource to begin with is the National Council of Nonprofits.
  • IRS Form 990: An annual form the U.S.-based tax-exempt 501(c)3 nonprofits with an annual $100,000 in annual contributions or over $250,000 in assets are required to file. The 990 form evaluates the legitimacy and financial health of an organization. 
  • Annual Reports: This is a crucial component of communicating your organization’s financial position to board members, volunteers, donors, foundations, and the general public.
  • Privacy Policy: Explains how you collect and use a person’s information including email address, mailing address, etc. It shows you value your supporters' information and that you can be trusted with it.

3. Engaged Board of Directors 

Setting expectations for board members is essential. Sitting on a board of directors comes with a unique set of responsibilities. It is more than a title. They plot the course so the staff can steer the ship. 

Organizations need to make expectations clear to board members. Board members must do more than make decisions, they must help execute, as well.  As leaders in fundraising efforts, board members are expected to give financially. They also need to engage the community in development activities including connecting the executive director to potential donors.

When an organization has an engaged board of directors it not only makes it easier for the staff to run programs and raise money, but it lifts the morale of the entire organization.

4. Clear Program Outcomes 

For many nonprofits programs are the backbone of their organization. Churches have missionary programs, youth programs, and food pantries. Faith-based nonprofits build homes, collect used goods to give to those in need, and run hospitals, to mention a few.

Your most dedicated donors will pay close attention to the finances and the individuals on the board of directors. Newer supporters get introduced to your organization, most likely, through your programs.   

A nonprofit may have one program or many. It is not the number of programs that matters, but their efficiency and effectiveness. Your program is an outward extension of your organization. It is what drives your organization to meet both the mission and the vision.

Part of asking for funds is sharing the impact of your program with supporters. When the program has great outcomes, it is rewarding for the organization and those who support it. You need to share your program outcomes at every opportunity you get. One of the best ways to tell supporters about your program outcomes is through stories.

Stories and the human experience behind them have a powerful impact on human behavior. They make people feel a wide range of emotions from sad, to frustrated to joyous—sometimes all in one story. Stories move people to act. 

Interview those you help through your program. Collect stories and share them as many ways as possible, in person, through direct mail, email, etc. Use every channel available to you to highlight your program outcomes.

Effective communication is the key to successful fundraising.  

5. A Fully Developed Strategic Ministry Impact Plan

As the number of nonprofits increases and the demand for services exceeds resources, it has become more important for nonprofits to develop strong, strategic ministry impact plans. 

A strategic ministry impact plan describes the current state of your organization and defines the roadmap for the next three to five years. It describes your goals and the plans to meet those goals. It’s important to update it frequently to account for changes and your evolving goals and objectives.

Your strategic ministry impact plan should:

  • Define vision, mission, and core business.
  • Establish your goals and objectives.
  • Describe your beneficiaries, partners, and other stakeholders.
  • Assess the feasibility of your organization to accomplish the mission.
  • Define your fundraising and financing model.
  • Provide a long-range budget, unit cost of service, and a rationale for a source of funds.
  • Invite investment opportunities.
  • Attract board members and volunteers.
  • Solidify your messaging.
  • Hold your organization, yourself, and your team accountable.

Eight components of a strategic ministry impact plan:

  1. Executive Summary: This section is first in your strategic ministry impact plan but write it last. It provides an introduction and description of what follows in your plan.
  2. Unique Positioning: Articulate your vision, mission, values, purpose, guiding principles, etc.
  3. Outline: Create an outline of everything you want to include in your strategic ministry impact plan.
  4. Programs: Detail what it is your nonprofit does. Get specific here.
  5. Engagement: Describe your current marketing activities, campaigns, and initiatives. Include specifics about the outcomes of your marketing efforts.
  6. Operations: Explain how you plan to maintain your operations and your process to evaluate them.
  7. Impact: A plan to achieve your value, mission, etc. Include how you plan to measure your impact.
  8. Financial: Describe your current and projected financial status. Include income statements, balance sheets, cash flow statements, and financial projections. 

Equipped for Success

By establishing these five fundamental components, you can streamline the preparation process for meeting with donors and foundations. Having a clear understanding of these essentials will ensure that you can effectively address any questions or concerns that may arise during donor meetings. Donors typically want to review financial statements and ministry plans, so being prepared with these documents is crucial.

As you craft your case for support or proposals, referencing your vision and mission statement and strategic ministry impact plan will help ensure that your messaging stays consistent. Including project outcomes and financial reports in your proposals will provide important context to potential donors.

Investing the time now to thoroughly research and establish these key components will ultimately lead to greater success in securing donations and funding.