How can you use budgeting skills to improve fundraising success? (2024)

Development staff should work closely with their Mission staff to define clear implementation goals that help build stronger asks tied to specific budgets. Too often I hear that proposals and prospective budgets are submitted without input from the implementing Mission staff. Including your Mission partners from the beginning ensures that you are building a meaningful ask for donors that aligns with current priorities and needs.

Many successful nonprofits break down their overarching fundraising goal into more manageable fragments by revenue source. If your objective is to raise $50,000 in a year, for example, you may want to divide the total into particulars⁠—such as collecting $20,000 from individual donations, $10,000 from matching gifts, $15,000 from events, and $5,000 from grants. From there, you can determine the allocation of time, energy, and other resources accordingly.If your team is looking to grow the results of a particular core area, investing in the right tools⁠ to streamline your efforts—like Double the Donation’s 360MatchPro⁠—can go a long way.

The fundraising goal can further be broken down into smaller milestones or benchmarks. These interim targets serve as vital checkpoints, enabling you to gauge your progress and, if necessary, make mid-course adjustments. For example, you might aim to raise a certain percentage of the total goal within specific timeframes. Milestones provide a feedback loop that helps you learn and adapt as you progress. If you're consistently reaching or surpassing milestones, you might consider scaling up your efforts. Conversely, if you're falling short, you can identify areas for improvement.

Set your fundraising goal based on revenue segments: 1. Individuals, 2. Foundations, 3. Corporations, 4. Events. 85% of Philanthropy in the United States comes from Individuals, so focus on this segment. For individuals, set goals and plans for a. Mega Gifts ($25,000+), b. Major Gifts ($1,000+) and c. Annual Gifts (less than $1,000). Annual Gifts may come in via your website, social media campaigns, direct mail or events. Important note on Event fundraising: events take a lot of time and organizational resources. Make sure the event is worth your while. Ideally keep your event costs to 25% or less of total revenues raised. Events can be great to introduce new donors to your nonprofit. Just make sure you FOLLOW UP :) with event attendees.

Having an acute understanding your organization's budget allows you to match the donor's interests with opportunities quickly. For example, if your PreK program costs $50,000 to run but a donor wants to give $100,000 to support these future leaders, you want to quickly suggest a gift that supports your early childhood program, including kindergarten. This clear understanding of the budget details allows you to strategically align gifts with needs in a way that is personalized to the donor's interests (less general operating) but still meets the organization's needs.

How you decide to break out your budget for funders tells the story of what your organization values. For example, a finance team probably has one big bucket called Classroom Materials, but the program teams know which expenses they will allocate to the arts or literacy. As soon as I know a major funder is interested in literacy, I like to start the conversation with finance and program teams. If they know you will be reporting on their program they can help you identify stories about the impact of specific investments and give you a more accurate accounting. TLDR: Institutional funders want to know how their money will be used, and who benefits so it is important to decide what buckets need more detailed accounting right away.

Project your expenses and when you achieve the actual expenses, refresh the spreadsheet so that you have an accurate account. This allows you to make better business decisions with more data at hand. Add in assumptions to why you are projecting the numbers you are and add notes when you achieve the actual allocation so that you can better project expenses.

(edited)

One should plan fundraising strategy, source of fund and its cost. The budget shall include any financial implication of the fund raising, like interest cost, upfront fees, any commission etc. This would provide realistic picture and minimise disparity in budget vs actual. Further, it enhance credibility of budgeting skills and fund raising strategy.

Your budget must be tied to your organizational strategies which should be tied to detailed action plans. Each plan needs an OWNER. Not a few. And bi-weekly meetings to stay on top of plans and budget lines.

Tracking and monitoring a fundraising budget is crucial for a nonprofit organization as it ensures financial accountability, efficient resource allocation, alignment with goals, informed decision-making, risk management, positive donor relations, compliance, and facilitates long-term planning. It's a fundamental practice that supports the overall sustainability and success of the organization's mission.

(edited)

A relatively simple way to measure the effectiveness of your budget is to use an X/Y axis. The X axis could be money (as in dollars generated by a particular program). The Y axis could be mission (as in how a particular program fits within your overall organizational mission). Plot your programs on the axis for a visual representation of their success with these two forms of measurement. Obviously, a program in the "high mission, high money" quadrant is a keeper, and "low mission, low money" is probably one to do away with.

Evaluating budget performance in fundraising involves comparing actual versus planned income and expenses, calculating key ratios like CPDR and ROI, analyzing donor acquisition and retention costs, assessing income diversity, reviewing the effectiveness of fundraising strategies and campaigns, considering donor feedback, measuring impact and outreach, and continuously refining tactics based on data-driven insights. This comprehensive evaluation process enables nonprofits to optimize their fundraising strategies, enhance financial efficiency, and ensure sustainable support for their mission.

Your organisations successes no matter how small should be communicated and celebrated. Fundamentally you are working towards purpose and impact for a better world as a team so if someone is supporting that vision thank them! And when you share how the little win came about you might inspire others to join in too.

Once you've achieved your budget goals, organize a team gathering where you walk through the highlights of your financial success. Use this as an opportunity not just to applaud the big wins, but also to acknowledge the micro achievements along the way. You can play a simple retrospective to learn about your experience. A great example of a simple retrospective exercise is "Start, Stop, Continue". In this activity, team members independently reflect and respond to each prompt:I want to start…I want to stop…I want to continue…The group then shares their responses and discusses using the inputs to plan a go-forward strategy.

If you are launching or testing a new campaign. Maybe a new product to new audiences you should avoid including large Year 1 targets. Year 1 income targets will push your decision-making down a short-term route and risk aversion is then magnified.Also - if your new campaign does not hit those Year 1 targets it may be stopped prematurely. With innovation it is very important to avoid Year 1 income targets so that you can focus on big wins and operate with some degree of risk. You may stunt growth by focusing on the short-term. Of course have other KPI's and measures you are observing to make sure you're on the right track. But income should not be one of them.

If you’re on a budget at the grocery store, one of the best things you can do to stretch your dollars further is to make the most of available BOGO sales. When you can get twice as much for half the cost, you’re able to spend your remaining funds on other necessities. I like to look at corporate matching gifts as a Buy One, Get One Free deal for charitable donations. Organizations that proactively pursue the matching gift opportunity are likely to receive greater funding through both individual and corporate giving, ultimately benefiting your budget performance and allowing your team to reinvest into other impactful efforts.