Fundraising is often critical to the success of your organisation, and should be a long term carefully considered process.

But just because you need funding doesn’t mean you’re ready to start looking for it yet. As well as funders wanting evidence of need, they also want to know that your organisation is well managed and can provide good value for money.

You’ll find material here to help you think through the important things to do before you can fundraise effectively.

Show you’re organised

To reassure funders and supporters that you’re a responsible organisation you need a constitution which sets out your aims and objectives and the rules governing how your organisation is managed and run.

If you’ve already got a constitution you need to regularly review it to make sure it meets your needs, eg ensure you have the power to borrow money, set up a social enterprise, etc

Think about obtaining charitable status. Some funders only give to registered charities and charitable status can give you more credibility with other donors as they know you’re complying with a minimum standard of accountability and governance.

Note that fundraising itself is not a charitable purpose, instead it’s a way of enabling a charity to achieve its objectives.

Sum up your finances

Finances and financial responsibility are the areas most scrutinised by funders. Before you start fundraising, you need to consider these financial issues:

  • Bank Account. You should have a bank account in the name of the organisation which offers the facility to have transactions approved by two people,.This helps protect against fraud.
  • Financial Management. You need to show your finances are well managed and produce regular financial statements including management accounts, cash flow forecasts and an annual budget.
  • Annual Report and Accounts. Your annual accounts should be prepared and audited or examined in line with the requirements of your legal structure and constitution. The Trustees Annual Report is your opportunity to highlight your achievements and can act as a promotional tool for your organisation. It can also explain any surpluses, deficits or reserves.
  • If you’re running at a deficit, you should have a plan to reassure funders that you will be able to eliminate it, and they will be funding your work rather than your overdraft.
  • Surplus or Reserves. Funders will want to know why you’re not spending your own funds first before coming to them. Explain any ‘committed surplus’ or ‘restricted funds (perhaps money savedfor a major capital expenditure).  Funders will recognise that it’s good practice to have 3-6 months’ reserves against future uncertainty.

Know your people

Next to finances, funders will want to know how well you are managed. The committee or board need to have the skills to manage the organisation well and have good governance practices. If you have staff you need to have good recruitment, and management processes. Volunteers are important too so show you value and look after them.

Fundraising has been described as part science and part art, but really, it’s all about people. Successful fundraising needs to involve the whole organisation, so ask your board, staff and volunteers about their contacts, skills and outside interests. You may be surprised at the list of people, businesses and organisations that can be used to build support.

  • local and regional conferences and seminars, e.g., the Gathering, the Institute of Fundraising annual Scottish Conference.
  • training – there are lots of useful courses and good websites.

Prove your worth

Your position in the community you work in, recognition and effectiveness are all important to funders. You may need to show funders evidence of community support. Include things like:

  • press articles highlighting your achievements
  • awards received by staff, volunteers or the organisation
  • community leaders sitting on the board
  • a record of financial contributions from individuals
  • cash / in-kind support from local business
  • statistics on the number of people accessing / receiving your services
  • recognition by government or other agencies
  • active volunteer base and membership numbers
  • positive testimonials from experts, clients, members and volunteers
  • case studies and stories from your beneficiaries
  • structured community consultations
  • list of fundraising events
  • feedback and evaluations from user / beneficiary groups

Plan to succeed

It’s important to have an overall organisational plan to fit your fundraising into. If you already have a business plan, this is a good start. If you don’t have a formal plan, here’s a list you should be working on. You need to:

  1. Define the Vision. Your organisational vision is the ‘big picture’ – the reason why your organisation exists. This needs to be clearly defined.
  2. Mission Statement. With your vision defined you can write your mission statement where you explain (in 50 words or less) what you are doing or planning to do about your vision. Use your objects of your organisation from your constitution and focus on what you want to achieve.
  3. Aims and Objectives. Once you have your mission statement you can look at setting out your strategic aims – how you want to fulfil your mission, your overall priorities. Then you can set specific targets and time scales for each aim.
  4. Project Outcomes / Impact. With your aims and objectives clarified you then need to focus on what the projected outcomes, or impact of achieving these objectives will be. Outcomes or impact are the expected changes and / or benefits that will occur as a result of achieving the objectives. This is distinct from outputs, which are measurable and quantifiable activities that have occurred. Outcomes are what the funder wants to ‘invest’ in.

Only once you have these important foundations in place, can you think about a fundraising strategy. Analyse your position, look at your strengths and weaknesses, and what fundraising experience and resources you have. Identify the gaps. This is an integral part of your business plan. Remember things change, so aim to review and update your strategy every year.