Your Organization's Fundraising Plan

Now that your new nonprofit is firmly established, you need a strategy for raising money. Having a successful fundraising plan in place is crucial to the success of your organization.


1. Establish your fundraising goals.
Your goals should be created with your board of directors, and have the board's approval. You need to determine how much money you need to raise, and what it will be used for. Some possibilities are operating expenses; funding of a new program or expansion of an existing program; or to build new or renovate existing facilities.

You might have more than one goal for the year. If so, create a fundraising plan for each goal. State what you ultimately hope to accomplish with each goal and list the specific steps toward accomplishing each goal. Those specific steps are called objectives. Where the goal is a broad, general statement, objectives are narrow, precise, tangible, concrete, and measureable.

2. Outline your fundraising plan.
Develop a written plan that states how much money you need to raise, how you will raise it and from what sources. The plan should have a certain amount of flexibility so that it can be modified throughout the year. Not all of your plans will succeed, or your funding sources may change during the year.

Be specific when outlining your fundraising plan. Determine just what type of fundraising you will do, and how frequently. For example, your organization may decide to have a membership drive, certain types of fundraisers, and apply for two grants per year. This will determine precisely how you will run your fundraising campaign.

3. Identify fundraising tactics
Some fundraising tactics work better than others. You might decide to use direct mail, telemarketing, email, or canvassing door-to-door. Social media such as blogs, Twitter, and Facebook works best when incorporated with other tactics.

4. Identify funding sources.
Define your target donors and customize your fundraising plan with those particular organizations or individuals in mind. For example, if you think that parents with young children will be more likely to donate to your cause, then your fundraising plan should target them. Make a list of people, businesses, agencies and organizations who might be interested in donating to your cause. Identify sources that you don’t usually tap into. Are you exploring grants from a variety of funding sources including the government? Local churches, colleges and universities are also possible sources.

5. Develop a timeline for your fundraising plan.
Identify a year's worth of specific actions and determine who will lead each project. Develop a separate timeline for each fundraising activity. Check throughout the year to ensure that major milestones are being met. The timeline will likely change during the year, but having one to start with will keep you on track.

6. Evaluate, evaluate, evaluate.
Evaluation of your fundraising plan is crucial to its success. Evaluate as often as necessary, at least every few months. Determine what you will measure such as the number of new financial supporters, the amount of money raised so far, whether you are on track for meeting deadlines for grant submission. Determine what programs have proven to be successful and what programs need to be changed or abandoned

As a new organization, planning is key to the success of your fundraising strategy. Once you have established your nonprofit organization, developing a fundraising plan should be one of your top priorities.

After You're Legal

1. Establish what staff members you will need. Create a list of positions that are needed to run your organization. For example, a small non-profit organization will need an office manager, a fundraiser, a marketing specialist, and an executive director.
2. Select the location of your office and buy equipment and furniture.
3. Set up the office.
4. Recruit your staff. Local unemployment agencies are an excellent resource. Referrals from board members and advertising in local classifieds are also an option.
5. Review resumes and look for applicants that have the critical skills needed for each position.
6. Set up interviews with your top applicants and invite board members to participate in the interview process.
7. Interview the selected applicants.
8. Confirm the applicants’ experience.
9. Contact references. This step is very important! Don't skip it.
10. Hire the best of the best. If you haven’t found the best, repeat the search process---don’t settle!
11. Train your staff.
12. Develop a fundraising plan. Solicit outside help if you need to.
13. Launch your fundraising program.

Next time…Developing your fundraising plan.

 

After You File Your Legal Incorporation Documents

• Get approval from the board to file for tax exempt status.
• File for federal tax exempt status with the Internal Revenue Service. You can find the forms for this on the IRS's Web site .
• File for state tax exempt status. You will need to wait for federal approval for tax exempt status before you contact your state's department of revenue. To find contact information for your state's department of revenue, conduct a keyword search online for "[Your state's name] department of revenue."
• Research local permit and business requirements. You may need to obtain a permit to solicit funds, get a business license, or file city level tax exempt status forms.
• Obtain a mail permit from the U.S. Postal Service. This will grant you a bulk mail discount for your fundraising mailings.
• Complete employment filing needs. If you plan on hiring employees, you will need to file for a federal employer number. This is a free process that you can complete online.  There is a simple form that you will need to fill out and file with the IRS. Once approved, the IRS will mail you a form with your federal employer number. You will also need to file for a state employer number. Contact your state's department of revenue for the proper forms. Finally, make sure that you have unemployment insurance and the proper tax reporting forms needed for meeting employment laws.

Next time...After You're Legal

Incorporating your Nonprofit Organization

I previously listed the first seven steps in starting up a nonprofit organization.  Today we will cover the next two steps. 

8. Find an insurance agent that can help you develop an insurance policy that will protect you and your non-profit organization. You will probably need liability insurance, property insurance. If you plan on hiring employees you will also need workers' compensation insurance, health insurance and life insurance (Health and life insurance is optional).


9. Draft and File Your Legal Incorporation Document

• Identify the basic information about your non-profit organization. You will need to include the name of your non-profit, where the headquarters will be officially located and what the purpose of your non-profit will be.
• Draft your purpose clause. Your purpose clause will need to define what the goals your organization will have. Keep the goals general to give you flexibility in what services you provide now and what services you can provide later once you are more established.
• Determine if you want your organization to be a membership organization or not. This be based on how you want your non-profit organization to be run. If you make your non-profit a membership organization, then the members may have a say in how money is spent and how the organization is run.  
• Most Secretary of State web sites have templates and/or instructions for nonprofit articles of incorporation. You may also search online using keywords “nonprofit articles of incorporation”, plus your state.  
• Check with your state to see if by-laws are required in your articles of incorporation. If so, draft your by-laws for your organization. Bylaws are the ruling documents of an organization or, in this case, the organization’s board of directors. Bylaws are critical, because they tell the board how to conduct its business. However, because bylaws are more or less set in stone, it is in the interest of the board to keep them as brief as possible. If your state requires by-laws, you will need to include them with articles of incorporation. If your state does not require them, you will need to draft them as a separate document. A lawyer who specializes in incorporation can help you set up your non-profit the way that you plan to have it set up.

The legal incorporation documents are filed with the Secretary of State office in your state. The fee will be determined by the state in which you incorporate. Still more to come tomorrow.

Starting a Nonprofit Organization

OK so you've made the decision to start a nonprofit.  I will share with you the steps you will need to follow to get your NPO off the ground. 

1. Decide what your non-profit organization will do. What needs need to be met in your community? You might call local agencies to see exactly what areas need the most help.


2. Write a mission statement. A mission statement is a formal short written statement of the purpose of your organization. The mission statement is intended to guide the actions of the organization, spell out its overall goal, provide a sense of direction, and guide decision-making. It provides the framework on which the organization’s strategy is built. Of course the mission should be about meeting a need in the community.

3. Name your organization. This requires some careful thought. The name should indicate what services will be provided and to whom they will be provided. Do an online search to make sure that other organizations in your area do not have the same or a similar name. If you plan on having a website, do a search to ensure the availability of the domain name.

4. Select the members of your Board of Directors. Choose your board members to meet the needs of your non-profit as well as the requirements of your state. You will need at least a small number of board members to help you start the new nonprofit. Select your board members based on their field of expertise. Board members with previous nonprofit experience such as fundraising, planning, and accounting can be especially valuable.

5. Find a lawyer that you can consult with during the incorporation process. You can do much of the work yourself to incorporate but you will benefit from a lawyer who can help guide you through the process.

6. Set up a bank account for your non-profit organization. Look for a bank that is familiar with the banking needs of small non-profit organizations.

7. Set up an accounting system. You may need to hire the services of a Certified Public Accountant (CPA). If you do not have at least a basic understanding of bookkeeping and accounting, then you should get some help. If at all possible, enlist a volunteer who has accounting skills, and may possibly be the Treasurer on your Board of Directors.

More steps tomorrow...

Non Profits 101

After some thought, I decided that I would focus the first few blog entries on very basic information such as:  What is a nonprofit organization (NPO),  Starting a NPO, and Writing your NPO's missison statement to name a few.

Today the topic is What is a NPO?

The term, nonprofit, is used rather loosely to describe groups that come together to achieve a mission, rather than to make a profit. The term "nonprofit" does not imply any specific type of legal structure. If the group incorporates, it is a nonprofit corporation. If it does not incorporate, it is an unincorporated nonprofit association.


Examples of unincorporated nonprofit associations could include a group of neighbors who want to keep a neighborhood park clean and kept up, or a group of cheerleading moms who sell candy to fund their children's trips to cheerleading tournaments.

Both groups could be called "nonprofits" simply because they are mission-driven, not profit-driven. If the park group never does anything to create a formal structure. It would be considered an unincorporated nonprofit association.

The cheerleading moms file papers with the state to become a corporation. The group is then a nonprofit corporation. As a result, this group, because it works for the "common good," would be exempt from the state taxes a for-profit corporation would have to pay, making it, to some extent, publicly subsidized.

To make sure that the nonprofit corporation actually works for the public good and earns its tax breaks, the state will required it to set up certain organizational structures such as a board of directors or board of trustees. The board is responsible for keeping the group on track and fulfilling its nonprofit mission.

Any nonprofit, the unincorporated and the incorporated, could become tax-exempt from federal income taxes by applying to the IRS. However, incorporated nonprofits stand the best chance of actually meeting the IRS standards for tax-exemption.

There are several types of federal tax-exempt status, but the most favorable one is "501(c)(3)" status. A 501(c)(3) nonprofit is exempt from federal taxes but, in addition, donors to the nonprofit can take a tax deduction for the amount of their donations. This is a powerful incentive for donors.

Other classifications offer exemptions from federal income taxes (for instance 501(c)(4) or 501(c)(6) status) but only 501(c)(3) status allows donors to deduct contributions.

As you can see, the very first decision any group will need to make is what kind of nonprofit it wants to be.

Next: Starting a NPO.