Who needs a nonprofit development plan? This one is pretty simple: You do!
We know of organizations dating back to the 1990’s that run according to a vague plan in an executive director’s brain that makes the cash register sing only a crisis melody. “Uh-oh, you mean we can’t pay for…?” Just use your imagination and slot in…”the D & O insurance”…”the going-away party for Melvin”…”the photocopier repairs”…or even more dire…”the staff salaries for next month”! The CEO’s response: “I’ll take care of it, right now! I’ll write another appeal to the membership!”
Poor development planning, or in the case above–no development planning—means that your organization lurches from crisis to crisis instead of being carefully nurtured from inception as principal/board/community-funded, to being funded in its mature stages mainly by donations by individuals, foundations, and corporate social responsibility grants carefully and actively cultivated over the years.
Think of creating development plan as a roadmap–or even better, as a GPS, because circumstances and plans do change, and course corrections are needed from time to time to deal with contingencies.
So, who develops the development plan and what elements does it contain?
Sometimes organizations, led by well-meaning boards and directors, attempt to rely on grants alone. Well, listen up, please: grants are great to have and everyone needs them. But just as putting all of your money into one stock is an overly risky move, so is relying on grants to run 95% of your operating and program costs. Diversification of funding sources is your organization’s key to stability and longevity, just as diversifying your 401K portfolio into mutual funds containing stocks, bonds, and cash is crucial to the stability of your nest egg.
How, then, does an organization develop its financial profile and create sustainability?
In the first years of an organization’s history, there may not be funds to hire a full-time development professional. Hopefully, board members have been chosen wisely and some have marketing, fundraising, and financial savvy, along with the CEO. If these characteristics are lacking, consider hiring an outside consultant as a temporary measure. Just be sure your development plan is diversified and includes the following elements:
- A board of directors give/get amount. This refers to the financial pledge that each board member makes to give on a yearly basis and to personally fundraise, or assist in fundraising on a yearly basis. Some board members may be reluctant to cultivate prospects, but once they have been educated on how to do so, they discover that soliciting donations is not tantamount to death by firing squad!
- Grants. (Usually an organization progresses from the community, city, and state level as its reputation increases and its profile is raised, to regional, national, and international levels. Grants may have private or public sources.)
- Donations come in all sizes from a few dollars to major gifts, defined as $5,000 or more.
- Crowdfunding is the new kid on the block. Indiegogo and Kickstarter are two well-known examples.
- Membership/Alumni–This one should be pretty obvious, but don’t neglect membership levels or “circles” (“Contributors,” “Sustaining Members,” “Benefactors,” “The President’s Circle”–Oh, my!)
- Special Events should be done for good group “feel,” for honoring volunteers and major contributors, but don’t forget that a gala event can eat up to 50% of its revenue.
- Sales or program generated revenue–How many t-shirts, tote bags, and awareness bracelets are too many? Hint: Check your closet.
- Community-Business Partnerships (Sponsorships), a mutually beneficial arrangement.
So by all means, draft that plan–and make that cash register sings in harmony next time!