Tips for Widening Your Funding Net

June 16, 2009 By Abny Santicola

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• Have at least four or five different types of funding sources.
• Between 30 percent and 50 percent of income should come from individuals.
• With the exception of individuals and earned income, no single source of funding should exceed 25 percent of your annual income.
• Seven percent to 15 percent of an organization's annual income should come from businesses/corporations.
• Earned income/nonprofit enterprise should make up 10 percent to 15 percent of your annual income.
• Special events should generate 10 percent to 15 percent of your annual income.
• Grants from private grantmakers should make up about 5 percent to 10 percent of your annual income.

After you have developed the pie chart and created a reality check sheet, do an income source assessment where you itemize the strengths and weaknesses of each income source and talk about ways to improve it.

"Don't be scared to drill down," Adams said. "Really try to drill down and have a conversation about the weaknesses in these programs."

Then incorporate all of these findings into a strategic funding plan, which should have objectives and a strategy for each objective.

"Objectives are quantifiable and measurable; the strategies are how you achieve your objectives. And your plan of action really coordinates the two," Adams said.

For example, if the objective is to increase membership income by 15 percent over a 12-month period, some strategies to achieving this that Adams suggested are:

• Increase the annual membership fee for individuals from $45 to $55
• Increase the total number of members from 450 to 525
• Establish a monthly pledge program with an automated payment component

From these objectives and strategies comes the plan of action, which the organization's fundraising team will implement. The keys to establishing a solid fundraising team that can tackle the plan of action, Adams said, are:

• To develop a job description (very short) for the various tasks that need to be accomplished.
• Recruit volunteers to fill these jobs — maybe as many as 20.
• Create a working group for each objective.

"The idea is to connect folks with diverse skills and interests that can help you address all the areas you need when you're trying to raise money," Adams said. "Select team players carefully, and instead of looking for those individuals who are already on the board and contribute all the time, find individuals for whom this may be the first or the second time they've ever volunteered. Young people with passion and energy, or you look for older people with time and strong goals."

Also be sure to have one representative of the board on the fundraising team who will report back to the board. And make sure volunteers are working in areas where they are comfortable and using their skills.

Adams ended the webinar by sharing some free tools and resources to help organizations assess their current situations and develop a smart strategy to broaden their funding bases. Some of the tools she recommended are:

• A user-friendly board fundraising assessment form from Capital Venture;
• A Point K Organizational Assessment Tool from Innovation Network; and
• An online guide from the National Council of Nonprofits

"If you don't look clearly at where you are today, and all the different parts of your organization, it's difficult to move the organization forward," Adams said. "And, in fact, you may move it forward in the wrong direction. So you really want to take the time [to do this]."

Click here to find out about upcoming Network for Good webinars.

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