Why create a budget?

The strategic importance of a fundraising budget cannot be overstated. Your budget is essentially  a financial compass for the organization, guiding decision-making and strategic planning. Here’s how:

Guides Strategy: By laying out expected revenues and expenditures, a fundraising budget helps organizations identify the most viable fundraising activities to pursue, aligning efforts with financial goals.

Informs Decision Making: Budgeting provides a framework for making informed decisions about allocating resources, scaling efforts, and adjusting strategies in response to financial performance.

Encourages Innovation: A detailed budget encourages organizations to think creatively about new sources of income and more efficient ways to manage expenses and fill gaps.

Enhances Communication: A well-structured budget is a valuable tool for communicating with stakeholders, including board members, donors, and staff, about the organization's financial health and fundraising goals.

Financial Oversight and Risk Management: A budget helps ensure that your organization operates within its means, preventing overspending and allocating resources efficiently. Identifying potential revenue streams and associated costs helps mitigate financial risks by preparing for unforeseen expenses or shortfalls in fundraising.

Strategic Planning and Goal Setting: It allows you to plan your fundraising strategies effectively, prioritizing activities that yield the best return on investment. A clear budget sets financial targets, helping motivate your team and providing a benchmark against which to measure progress.

Transparency and Accountability: For nonprofits, a budget is crucial for donor trust, showing that funds are managed responsibly.

Calendar for Creating Your Fundraising Budget

1. Six Months Before the New Fiscal Year: Preliminary Planning
   1. Review the current year’s budget versus actuals.
   2. Assess the effectiveness of past fundraising activities. Highlight whether the organization is facing a gap
   3. Start setting goals for the next year based on this assessment.
2. Four Months Before: Drafting the Budget
   1. Draft an initial budget based on projected revenues and expenses.
   2. Engage with department heads and fundraising teams for input.
3.  Three Months Before: Review and Adjustment
   1. Review the draft budget with key stakeholders, including the finance committee and board of directors.
   2. Make necessary adjustments based on feedback.
4. Two Months Before: Final Approval
   1. Present the final draft for approval to the board of directors.
   2. Once approved, distribute the budget to all departments and stakeholders.
5. Start of the Fiscal Year: Implementation
   1. Begin implementing your fundraising plan according to the budget.
   2. Monitor progress monthly, adjusting strategies as needed to stay on track.
6. Six Months into the Fiscal Year: Mid-Year Review
   1. Conduct a mid-year review to assess performance against the budget.
   2. Adjust forecasts and strategies for the remainder of the fiscal year if necessary.
7. At the end of the Fiscal Year: Year-End Review
   1. At the end of the fiscal year, conduct a comprehensive review of what was achieved versus the budget.
   2. Use these insights to inform the next fiscal year's budget planning process.

How to use the Fundraising Tool

1. Assess Your Resources

Before we can build a budget and figure out what we need, we must first look at what we currently have at our disposal.

Staff Time: 

Analyze both the costs associated with your current staff as well as consider the availability and skills of your staff to acknowledge any potential gaps between your current capacity and ideal capacity to reach your goals.

Volunteer Support: 

Volunteers and interns can be a great way to increase organizational impact while limiting cost increases. Identify how many volunteers are available and their capabilities.

Budget for Fundraising: 

Fundraising has many hidden costs. Allocate funds for fundraising activities such as:

• Event Costs: 
  • Venue rental
  • Catering and beverages
  • Entertainment (e.g., musicians, speakers)
  • Decorations
  • Audio-visual equipment
  • Event insurance
  • Permits and licenses
• Marketing and Promotion:
  • Printing of brochures, flyers, and posters
  • Digital marketing expenses (e.g., social media ads, email marketing tools)
  • Website development and maintenance
  • Public relations and media outreach
  • Mailing costs for direct mail campaigns
• Technology and Software:
  • Database software for donor management
  • Online fundraising platforms and payment processing fees
  • IT support and maintenance
• Materials and Supplies:
  • Office supplies for administrative tasks
  • Event-specific supplies (e.g., name tags, banners)
  • Fundraising merchandise (e.g., t-shirts, wristbands)
• Travel and Accommodation:
  • Travel expenses for staff to attend meetings, conferences, or donor visits
  • Accommodation costs for out-of-town events
• Training and Development:
  • Workshops or training sessions for staff and volunteers
  • Materials and resources for training
• Postage and Shipping:
  • Costs associated with sending thank-you letters, tax receipts, and promotional materials
• Miscellaneous Expenses:
  • Hiring of temporary staff or consultants (e.g., grant writers, event planners)
  • Bank fees for handling donations
  • Legal or accounting fees
  • Contingency funds for unforeseen expenses

2. Define Your Fundraising Goals

Specific Objectives: 

To determine what you need to fund (programs, operations, capital improvements, etc.), ask the following questions to map out your fundraising goals for the year:

• What are your programmatic objectives? (SMART goal format)
  • How many people are you going to serve? 
  • What are your offerings? 
• How many people will it take to accomplish this? 
  • Roles and staff members
  • Supporting roles
  • Benefits/OTPS
• What tools do you need to buy to support this work?
  • Programming tools
  • Metrics measuring tools
  • Fundraising tools

Build a map of staff and volunteers to manage the success of these operations and assign costs to their time. Look at your current staffing options and fill in any gaps with new staff or volunteer positions to support that work.

Organizational Structure

Financial Targets: 

Once you have a clear vision of personnel, programming and operating costs as well as the visionary additions you wish to make you will have a clearer picture of your true budgetary expenses.

Timeline: 

Raising your total budget is important, but not as important as when you raise your money. Running a deficit can be incredibly dangerous if funding falls through and you are aiming to replenish money you have already spent. By mapping out key programming in a calendar, you can map associated programmatic and hiring costs to get a better birds-eye picture of your year, establish when you need the funds, predict cash flow issues, and set milestones.

3. Choose Fundraising Strategies

Based on your resources, potential donor base (mass and deep base), and goals, select a mix of fundraising activities. These should be a mix of Independent Revenue Generating (IRG) projects as well as multiple Institutional Fundraising Grants. Some options include:

Independent Revenue Generating (IRG) Projects:

• Fee-For-Service: Any assets, programs, or services that are being used by other nonprofits, businesses, or government agencies can be charged for (as long as it’s under market rate).
• Events: Anything from information sessions, performances, galas, bar crawls, and house parties can be fundraising events.
• Crowdfunding: If you have a new program, rapid response concern or other emerging need, a crowdfunding campaign with a defined goal amount and end date could be a great way to expand donor base.
• Membership Program: Creating an expanded membership program gives your donors better chances of developing affinity for your organization through deep relational work.
• Peer-to-Peer Fundraising: If you have an active donor base, things like marathons, streams, and other challenges can be great forms of having donors raise money from their circles.
• Annual Giving Campaign: Yearly fundraising appeal to your donor base to fund your work. Should be segmented based on your data mining information
• Matching Gift Program: Ask every donor you have if their employer has a matching gift program on your donation portal form. There may be hundreds or thousands of dollars that you are currently missing out on.
• Cause Marketing: Collaborating with local businesses big and small for a portion of profits is a great way to connect with your community..
• Sponsorship Programs: Having local business sponsor events or be partners in public facing programming can reduce costs greatly
• Community Partnerships: Partnering with businesses, schools, and other community organizations for joint fundraising efforts can help reduce costs and increase donor bases with information sharing agreements.
• Merch Sales: Merchandise with logos are great ways to increase visibility and raise money at the same time.
• Volunteering: Many large companies offer donations for organizations that provide volunteer options for their employees.
• Joint Fundraiser: Working on a joint fundraiser with a like-minded organization allows for you to create larger donor bases, share information, and improve your chances of success.

Institutional Fundraising Grant Opportunities:

• • Project-Specific Grants: These are awarded to support a particular project or program within your organization. The grant must be used exclusively for the defined project, such as a community development program, educational initiative, or research project.
  • General Operating Support Grants: Also known as unrestricted grants, these funds can be used to cover the day-to-day expenses of running your organization, including salaries, rent, utilities, and office supplies. They provide flexibility for your organization to allocate resources where they are most needed.
  • Capital Grants: Aimed at funding capital campaigns, these grants are used for purchasing, building, or renovating physical assets, such as a new building, a vehicle for program delivery, or major equipment.
  • Matching Grants: These grants require your organization to raise a certain amount of money independently, which the grantor then matches. They are often used to incentivize fundraising efforts and increase engagement from other donors.
  • Challenge Grants: Similar to matching grants, challenge grants set specific conditions or challenges that your organization must meet to receive the funding. This could involve reaching a fundraising target, obtaining a certain number of new donors, or completing a project phase.
  • In-Kind Grants: Instead of providing cash, in-kind grants offer goods or services. These could include donated equipment, free advertising space, or professional services like legal or consulting support.
  • Endowment Grants: These funds are meant to be invested, with your organization using only the income generated from the investment. Endowments provide long-term financial stability and are often used to support the ongoing work of the organization.
  • Research Grants: Specifically for organizations conducting research, these grants fund activities like data collection, analysis, and dissemination of findings. They are common in policy, medical, scientific, and academic fields.
• Government Grants: Provided by local, state, or federal government agencies, these grants can be for various purposes, including social services, health care, education, and environmental conservation.
• Corporate Grants: Offered by businesses as part of their corporate social responsibility (CSR) initiatives, these grants often focus on areas related to the corporation's interests, like community development, education, or environmental sustainability.

Each type of grant has its application process, reporting requirements, and compliance standards. Carefully research and select grants that align with your mission and operational capacities.

Once you’ve figured out all of your costs and fundraising goals, plug them into the Fundraising Budget Template.

4. Create a Fundraising Calendar

Time to build out your calendar! This will be your one stop shop to help you remain aligned on progress, update external and internal folks on the plan and progress, as well as be able to easily project manage each fundraising campaign. Things to consider:

• Plan Activities: 
  • Spread out activities throughout the year to avoid staff/volunteer burnout and donor fatigue.
• Set Deadlines: 
  • Include grant deadlines, event dates, and campaign launch/end dates.

• Staff Involvement: 
  • Assign specific tasks to staff members based on their roles, responsibilities, skills, and capacity. Don’t forget to include volunteers!

• Estimate Costs: 
  • Include marketing, event rentals, staff hours, etc.
• Forecast Revenue: 
  • Be realistic about how much each activity can raise.

Individual Giving Campaign 

1. Campaign's Objective

Campaign Purpose

To create an individual giving program with frameworks to push folks to become recurring donors.

Target Fundraising Amount

$75,000

2. Target List

• Major Donors
• Recurring Donors
• Deep Base Members
• Mass Base Members

3. Materials and Assets

Major Donor Giving Plan ($5k+)

Major Donors have not been properly stewarded in previous years. We must develop a stewardship plan to best support them, bring them into the fold, and understand why they donate.

Mid - Major Donor Giving Plan ($1k - $4.9k)

Mid-Major donors have been neglected, but we should be stewarding them as they are prime candidates to think through a recurring giving program and/or a gift increase.

Grassroots Donor Plan ($1-$999)

Our grassroots donor base is incredibly strong. To increase giving to our campaign in 2024, we need to increase segmented outreach and stewardship.

4. Campaign Needs

5. Stewardship Plan

Foundations Campaign 

1. Campaign's Objective

Campaign Purpose

To reestablish links with institutional partners and forge new partnerships into 2024.

Target Fundraising Amount

$750,000

2. Target List 

See Institutional Funding Tracker here

3. Materials and Assets

Former Successful Proposals:

[insert your links here]

Recently Submitted Proposals:

[insert your links here]

4. Metrics

How do we measure and track success?

• Number of Positive Relationships build
• Percentage of times invited for proposal
• Amount Raised      

 Corporate Giving Campaign 

1. Campaign's Objective

Campaign Purpose

To establish relationships with corporate sponsors in our region.

Target Fundraising Amount

$40,000

2. Target List 

See Institutional Funding Tracker here

3. Materials and Assets

ERG Giving Deck

4. Metrics

How do we measure and track success?

• Number of corporate sponsors we can develop relationships with
• Number of ERGʼs that partner with us
• Number raised

5. Implement, Evaluate, and Adjust

• Execute Activities: 

  • Follow the calendar and adjust as needed.

• Monitor Progress: 

  • Keep track of funds raised versus goals.

• Review Results: 
  • After each activity, analyze what worked and what didn’t.
• Make Adjustments: 
  • Modify the plan based on these insights for future activities.

6. Final Tips

• Utilize Free or Low-Cost Tools: Social media, volunteer networks, and community partnerships can reduce costs.
• Communicate Regularly: Keep staff, volunteers, and donors informed and engaged.
• Thank Donors Promptly: Acknowledgment can turn one-time donors into repeat supporters.

How Budget and Fundraising Goals Inform Your Work

Your fundraising budget and goals are interdependent; the budget informs your goals, and your goals shape the budget. Here's how they interact:

Setting Realistic Goals: Your budget provides a reality check for your fundraising goals, ensuring they are achievable based on past performance and projected growth.

Resource Allocation: Knowing your budget helps allocate resources (like staff time and marketing dollars) to the most effective fundraising activities.

Monitoring and Adjustments: Regularly comparing actual fundraising progress against the budget allows for timely adjustments in strategy to meet your goals.

Historical Analysis: Review past fundraising efforts to identify trends, successes, and areas for improvement. This historical perspective informs realistic projections for the future.

Goal Setting: Establish clear, achievable fundraising goals based on the organization's financial needs and strategic objectives.

Income and Expense Forecasting: Estimate revenues from various sources and anticipate potential expenses. Be conservative in income projections and realistic with expenses to avoid shortfalls.

Stakeholder Engagement: Involve key stakeholders in the budgeting process to gain insights, secure buy-in, and ensure alignment across the organization.

Monitoring and Revision: Regularly review actual performance against the budget, adjusting forecasts and strategies as necessary to stay on track.

Benchmarking and KPI’s

Introduction to Benchmarks and KPIs

Benchmarks give you metrics by which performance can be measured. Benchmarks could be based on industry standards, previous performance levels, or averages from peer organizations. Benchmarks serve as a compass for organizations, guiding strategic directions and performance improvement initiatives. They provide an external perspective by highlighting where an organization stands in comparison to peers or industry standards. This external validation is crucial for maintaining competitiveness and fostering a culture of continuous improvement. Benchmarks are particularly valuable for identifying performance gaps, setting realistic targets, and adopting best practices from peer organizations.

KPIs or Key Performance Indicators are specific, measurable metrics that reflect the critical success factors of an organization. For nonprofits, KPIs often focus on areas such as program impact, fundraising efficiency, and operational effectiveness. KPIs translate an organization's strategic objectives into measurable goals, creating a direct line of sight between employee activities and the organization’s vision. KPIs are the heartbeat of performance management systems, offering real-time insights into operational health and strategic progress. They enable decision-makers to monitor success factors critically, facilitating timely decisions based on empirical data.

Setting Up Benchmarks and KPIs

Align with Strategic Goals: Ensure that both benchmarks and KPIs are aligned with your nonprofit's strategic objectives. They should directly support the achievement of your mission and long-term vision. Ideally, these would be driven by a strategic planning document.

Identify Key Areas of Measurement: Focus on areas critical to your success, such as donor engagement, program outcomes, operational efficiency, and financial sustainability. Ensure that the data you’re tracking is actually useful to track.

Select Relevant and SMART Benchmarks and KPIs: Choose benchmarks that provide meaningful comparisons and KPIs that accurately reflect performance in key areas. Ensure KPIs are SMART:

• Specific
• Measurable
• Achievable
• Relevant
• Time-bound.

Methodology for Benchmarking

Applying benchmarks and KPIs effectively requires a structured approach, encompassing selection, implementation, and ongoing management phases.

Selection Process:

Relevance: Choose benchmarks and KPIs that directly relate to strategic goals and critical success factors.

Measurability: Ensure that the data needed to calculate the KPIs is accessible and reliable.

Benchmark Analysis: Conduct thorough research to identify appropriate benchmarks, considering industry reports, trade associations, and peer comparisons.

Implementation Framework:

Integration: Embed KPIs into regular reporting systems and ensure they are part of the operational rhythms of the business.

Technology Support: Utilize technology platforms for data collection, analysis, and visualization to enhance the usability and impact of KPI insights.

Stakeholder Engagement: Engage with stakeholders across the organization to build understanding and ownership of KPIs and benchmarks.

Ongoing Management and Review:

Regular Reviews: Schedule periodic reviews of KPI performance against benchmarks to assess progress and identify areas requiring attention.

Dynamic Adjustment: Be prepared to revise benchmarks and KPIs as the industry landscape, competitive context, and internal priorities evolve.

Action-oriented Insights: Ensure that insights derived from KPI analysis lead to concrete actions, whether it’s adjusting strategies, reallocating resources, or launching improvement initiatives.

Implementing Benchmarks and KPIs

Data Collection: Establish systems for collecting reliable and accurate data. This may involve using software tools, surveys, financial systems, and program tracking mechanisms. Make sure the tools you select are easy to use and adaptable to your team's needs and abilities to use them.

Regular Review: Schedule periodic reviews of your KPIs to assess progress toward goals. This could be monthly, quarterly, or annually, depending on the KPI.

Benchmark Comparison: Regularly compare your performance against chosen benchmarks and peer organizations to contextualize your KPIs. This comparison can highlight areas of strength and opportunities for improvement.

Stakeholder Engagement: Communicate KPI results to stakeholders, including staff, donors, and beneficiaries. Transparency can increase trust and support for your organization.

Analyzing and Acting on KPI Data

Identify Trends and Patterns: Look for trends in your KPI data over time to understand the underlying factors driving performance. Use the trends to make data driven decisions.

Set Actionable Objectives: Based on KPI analysis, set specific, actionable objectives to address areas needing improvement or to capitalize on strengths.

Adjust Strategies and Tactics: Use insights from KPI analysis and benchmark comparisons to refine your strategies and operational tactics.

Continuous Improvement: Treat the process as a cycle of continuous improvement, regularly updating your benchmarks and KPIs as your organization and its context evolve.

Examples of Nonprofit KPIs

Program Impact KPIs: 

Fundraising Efficiency KPIs: 

Organizational Efficiency KPIs: 

Project Success Tool to get Great Results

Instructions are built into the tool here: Project Success Tool.docx

Based on your resources, potential donor base (mass and deep base), and goals, select a mix of fundraising activities. These should be a mix of Independent Revenue Generating (IRG) project as well as multiple Institutional Fundraising Grants. Some options include:

• General Operating Support Grants: Also known as unrestricted grants, these funds can be used to cover the day-to-day expenses of running your organization, including salaries, rent, utilities, and office supplies. They allow your organization to allocate resources where they are most needed.
• Project-Specific Grants: These are awarded to support a particular project or program within your organization. The grant must be used exclusively for the defined project, such as a community development program, educational initiative, or research project. 
• Capital Grants: Aimed at funding capital campaigns, these grants are used for purchasing, building, or renovating physical assets, such as a new building, a vehicle for program delivery, or major equipment.
• Research Grants: These grants fund activities like data collection, analysis, and dissemination of findings specifically for organizations conducting research. They are common in policy, medical, scientific, and academic fields.
• Government Grants: Provided by local, state, or federal government agencies, these grants can be for various purposes, including social services, health care, education, and environmental conservation.

• Matching Grants: These grants require your organization to raise a certain amount of money independently, which the grantor then matches. They are often used to incentivize fundraising efforts and increase engagement from other donors.
• Challenge Grants: Similar to matching grants, challenge grants set specific conditions or challenges that your organization must meet to receive the funding. This could involve reaching a fundraising target, obtaining a certain number of new donors, or completing a project phase.
• In-Kind Grants: Instead of providing cash, in-kind grants offer goods or services. These could include donated equipment, free advertising space, or professional services like legal or consulting support.
• Endowment Grants: These funds are meant to be invested with your organization using only the incom generated from the investment. Endowments provide long-term financial stability and are often used to support the ongoing work of the organization.
• Corporate Grants: Offered by businesses as part of their corpoprate social responsibility (CSR) initiatives, these grants often focus on areas related to the corporation's interests, like community development, education, or environmental sustainability.

Each type of grant has its application process, reporting requirements, and compliance standards. Carefully research and select grants that align with your mission and operational capacities.

Once you’ve figured out all of your costs and fundraising goals, plug them into the Fundraising Budget Template.

Time to build out your calendar! This will be your one stop shop to help you remain aligned on progress, update external and internal folks on the plan and progress, as well as be able to easily project manage each fundraising campaign. Things to consider:

• Plan Activities: 
  • Spread out activities throughout the year to avoid staff/volunteer burnout and donor fatigue.
• Set Deadlines: 
  • Include grant deadlines, event dates, and campaign launch/end dates.

• Staff Involvement: 
  • Assign specific tasks to staff members based on their roles, responsibilities, skills, and capacity. Don’t forget to include volunteers!

• Estimate Costs: 
  • Include marketing, event rentals, staff hours, etc.
• Forecast Revenue: 
  • Be realistic about how much each activity can raise.

Example Fundraising Calendar

Individual Giving Campaign 

1. Campaign's Objective

Campaign Purpose

To create an individual giving program with frameworks to push folks to become recurring donors.

Target Fundraising Amount

$75,000

2. Target List

• Major Donors
• Recurring Donors
• Deep Base Members
• Mass Base Members

3. Materials and Assets

Major Donor Giving Plan ($5k+)

Major Donors have not been stewarded properly in former years. We need to develop a stewardship plan to best support them, bring them into the fold, and understand why they are donating.

Mid - Major Donor Giving Plan ($1k - $4.9k)

Mid-Major donors have been neglected, but we should be stewarding them as they are prime candidates to think through a recurring giving program and/or a gift increase.

Grassroots Donor Plan ($1-$999)

Our grassroots donor base is incredibly strong, We need to increase segmented outreach and stewardship to increase giving to our campaign in 2024.

4. Campaign Needs

5. Stewardship Plan

Foundations Campaign 

1. Campaign's Objective

Campaign Purpose

To reestablish links with institutional partners and forge new partnerships into 2024.

Target Fundraising Amount

$750,000

2. Target List 

See Institutional Funding Tracker here

3. Materials and Assets

Former Successful Proposals:

[insert your links here]

Recently Submitted Proposals:

[insert your links here]

4. Metrics

How do we measure and track success?

• Number of Positive Relationships build
• Percentage of times invited for proposal
• Amount Raised