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How to build a fundraising strategy
15 Aug 2024by Laura Stanley
We explain how you can write a brilliant fundraising strategy, exploring recent fundraising trends, the best fundraising platforms and channels, the importance of prioritising the donor experience, and much more
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Building the right fundraising strategy brings together multiple fundraising streams, attracts new donors, retains existing donors, and converts passive supporters into active givers.
A fundraising strategy can help you streamline fundraising ideas, motivate your audiences both internally and externally, monitor the impact of your marketing on how much income you generate, and much more. At its most simple, a fundraising strategy provides charities with an action plan for bringing in more money to support their cause.
A good fundraising strategy will look different for every organisation. Resource, budget, and audience preferences must be taken into account to ensure that your fundraising strategy is suitable for your specific needs. The job of a fundraising strategy is to determine the fundraising measures you’ll take based on these needs, identifying the trends that apply to you, and how you will use them to reach your fundraising goals.
Fundraising strategies evolve over time. Many charity professionals described 2022 as a year of trialling new things, as we emerged from the early difficulties of the pandemic and embraced the challenges of the “new normal”. The fundraising techniques that worked in 2019, and even 2020, have not necessarily been carried over to today, with charities needing to adapt to fluctuating donor expectations.
This article will show you how to effectively build (and rebuild) an effective fundraising strategy. We will explore the fundamentals of creating the perfect fundraising strategy for 2023, looking at new fundraising trends and methods and, crucially, how to identify the right ones for your organisation.
There are myriad benefits to having a fundraising strategy in place, including improving efficiency, maintaining a reliable stream of income, motivating employees, and gaining a better understanding of your donor base.
Improving efficiency
Putting a fundraising strategy in place helps you identify the key areas where you should focus your efforts in order to achieve maximum effect. Small charities with limited resources can be just as effective as their larger counterparts by concentrating only on the fundraising tactics that suit their audiences, rather than trying to do everything at once.
Research has shown, for example, that younger audiences prefer donating through mobile phones, while older demographics still prefer cash and Direct Debit. Being able to tailor your fundraising strategy directly to the audiences you want to reach allows you to be more efficient, no matter how limited your capacity or budget is.
Maintaining a reliable stream of income
Effective fundraising is vital for charities, allowing them to continue delivering services to the communities they serve even in times of crisis. Recent years have brought their own fundraising challenges for charities, from having to cancel fundraising events amid COVID-19 to putting financial strains on donors during the cost-of-living crisis.
Rising inflation, soaring costs, and fears that supporters will be less able to donate money to charity have led to an increased risk of charity insolvencies in 2023, according to some forecasts. Creating a fundraising strategy helps charities to keep track of their fundraising activity, double down on what is working, and maintain a steady and reliable stream of income in times of economic uncertainty.
Motivating employees
A good fundraising strategy helps to motivate employees by giving them clear goals and the resources to be able to achieve them. The fundraising strategy should be achievable and realistic, with goals determined by previous fundraising data, such as the number of new donors recruited or the rate of churn (when people stop supporting a charity).
A fundraising strategy helps your organisation to become goal-oriented, increases buy-in as your team collaborates together, and boosts morale as they monitor their progress. This is especially important when it comes to attracting and retaining new employees. More than two in five employees from Gen Z – who are expected to make up 27% of the workforce by 2025 – told a 2022 survey they would rather be at an organisation that gives them a sense of purpose than one that pays more.
Understanding your donor base
A key benefit of implementing a fundraising strategy is an increased understanding of your donor base. The donor experience is becoming one of the most important elements of marketing and fundraising. Many donors give to more than one charity, but charities must meet their donors halfway, making it convenient for them to donate whenever possible. The easier it is for them to give money, the more often they will do so.
Building a fundraising strategy demands that charities get to know their donors in order to understand what will make it easier for them to give. As a result, charities gain a clearer picture of their audience and are able to make key decisions with them in mind in the future.
In order to make sure your fundraising strategy is successful, you need to first understand your current fundraising position.
For example, how many of your current donors are returning to donate to you on a regular basis? What is the average gift size? How many donors have lapsed in giving over the last 12 months?
These are all important questions to ask when building your fundraising strategy. These questions will help you identify barriers to fundraising that need to be overcome and areas of success that you can replicate in the future.
Below, we show you the Key Performance Indicators (KPIs) you need to effectively measure your fundraising activity and where you can find the data you need.
Which fundraising KPIs charities should measure
Data and insight company Wood for Trees suggests five key areas that fundraising KPIs should fall into.
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Volume: For fundraising, this means supporter volume, including how many active supporters you have, how many have lapsed, and how many you’ve recruited. Active supporters could mean someone who has donated in the last year, someone who has donated in the last three months, or someone who donates regularly
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Value: Value KPIs cover, among other things, net income, gross income, cost per donor and average gift size. Net income measures the amount of money coming into a charity that will go to tackling its mission; gross income tells you how much in coming in overall
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Journey: Journey KPIs help you evaluate your supporter journeys by looking at how quickly donors return (second gift rates) and how many people stop donating or engaging with you per month (monthly attrition rates). Second gift rates are important because a second donation is likely to be a bigger return on investment than the first, depending on how much your charity spends on donor recruitment
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Contactability: Contactability KPIs include email opt-in rates, bounce rates, and open rates. Opt-in rates can be a good sign that your supporters are committed and want to hear more from you, whereas bounce rates can be a sign that your donor data is outdated and you’re not reaching the right people
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Wildcards: Wildcard KPIs are metrics that are specific to some organisations but not to others. Some charities might rely on grant funds, for example, while others receive a lot of legacy gifts – these may be key areas to focus your fundraising strategy on, but are not fundamentals for everyone
You can find out more tips for setting KPIs to inform your next fundraising strategy in our webinar with Wood for Trees here.
Where to find the data you need
According to the Charity Digital Skills report 2022, using digital to effectively apply data was cited as the second most important priority for charities, following using digital to improve their brand and profile. The above KPIs will help when it comes to optimising your fundraising, but where can charities find that information?
Here are some of the simplest places charities can look to find data that will inform their fundraising strategy.
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Website data
Looking at how your supporters behave on your website can help you discover areas of friction in your fundraising.
For example, is your donate page clearly signposted? Is it easy to discover other fundraising sources, such as events or merchandise? What, exactly, is preventing supporters from donating through your website and how can you change that in your next fundraising strategy?
Even the amount of impressions or clicks on your content can tell you whether it is engaging potential supporters or not. How long do people stay on your website? How many articles do they view? How many donations come through your website rather than other methods?
Looking at your website data through tools like Google Analytics and HotJar, which shows you a heatmap of the journey people are taking through your site, can help you discover more about a donor’s journey through your site before they click the donate button (or indeed, what makes them switch off long before).
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Financial data
Many of the KPIs you need to inform your fundraising strategy can be found in your financial data. However, data such as cost information can be difficult to access because it is not typically held in databases.
Fundraising professionals should work closely with their charity’s finance team to have access to the income data they need, ensuring that their information is up-to-date and consistent. If fundraising and finance do not work together, it becomes much harder for fundraisers to invest in the strategies they need to bring in more funds and much harder for finance teams to balance the books.
Andrew O’Brien, former Head of Policy and Engagement for the Charity Finance Group, writes: “In this new climate, finance and fundraising teams need to agree the level of investment that is necessary to enable charities to remain on top of the latest developments and ensure that relationships with donors remain strong.”
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Sector data
While looking at your organisation’s internal data is vital for informing your fundraising plans, looking externally at how the rest of the sector is faring can be helpful too. It helps charities determine whether they are in relation to other organisations, whether they are underperforming or overperforming compared to similar charities in their field.
Sector data also help charities find trends that they can capitalise on when building a new fundraising strategy. For example, if research shows that digital donations are rising, charities can ensure they think about the digital fundraising options they provide in their strategy.
The world of fundraising changes all the time. In 2020, virtual fundraising events were all the rage, as all in-person fundraising was cancelled as a result of the pandemic. However, as restrictions were lifted, charities saw a decline in income through virtual events, while physical fundraising events returned.
Keeping up to date with fundraising trends can determine where to focus your fundraising efforts. Below we highlight some of the most pertinent trends affecting the sector that can inform your fundraising strategy.
Fundraising in 2023
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According to the 2023 Charity Pulse report from donation platform Enthuse, 64% of charities either maintained or increased fundraising income in 2022. However, 29% said their income was lower than in 2021
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Almost two in five (39%) charities expect a growth in corporate fundraising, but 18% remain concerned there will be a drop in income
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The uncertainty continues elsewhere in fundraising – 31% of charities say individual giving will grow while 22% expect a decline
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A quarter of charities forecast a rise in legacies, but 19% think there will be a decline in income
Fundraising challenges
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The 2023 Charity Pulse report revealed that nearly half (47%) of charities are worried that donors have less money to give and 37% concerned that fundraisers are reluctant to ask their friends and family for support because of the cost of living crisis
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The Charities Aid Foundation UK Giving Report found that, between January and April 2022, only 57% of people said they had donated or sponsored someone in the previous 12 months, compared to 65% in 2019. This works out as an estimated 4.9 million fewer people giving to charity.
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One in eight supporters (13%) are currently considering cutting back on donations to charity in the next six months whilst one in 12 people (8%) said they had already chosen not to make a one-off donation (March-May 2022)
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Enthuse found in the Summer Donor Pulse 2022 that the cost-of-living came out as the biggest concern, overtaking COVID-19 which had been the primary concern three months earlier
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However, it’s not all doom and gloom – the Autumn survey found the number of people donating has remained broadly the same between Summer and Autumn, with 75% of the public having given
Donor motivation
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According to Blackbaud’s Donor Behaviour Insights 2023, 93% of people support charities by donating money
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The biggest motivation to give (across all groups) is to help those in need, followed by helping a friend, social responsibility or to help their local community
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Donors over the age of 55 prefer to give to the same charity, whereas 18–34-year-olds are more likely to give to what appeals to them at the time
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The three biggest triggers for giving to charity current events or news about a cause donors care about (48%), posts on social media from friends, family, or colleagues (45%), and posts on social media from charities themselves (28%). Social media is less influential for older age groups.
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Only 26% of people expect a ‘thank you’ after a donation, although this does increase among 18 – 34 year olds
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Only 43% of people say that they know what difference their donation has made, and it doesn’t differ across age groups
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According to the Autumn Donor Pulse report from Enthuse, two fifths of people say they have a moral duty to give to charities, supported by a quarter wanting to help people with the cost of living
Online fundraising
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According to the 2023 Charity Pulse report, more than half (55%) of charities see making more use of their digital channels as a reason to be optimistic
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Donor Behaviour Insights 2023 shows that more than a third (35%) of donors like to donate using cash, while 33% like to give online. The third most popular donation method is Direct Debit, cited by 25% of respondents
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Donors under the age of 35 were more likely to prefer donating online – 38% said they preferred to do so compared to 23% of over-55s
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Nearly three in five (59%) of donors prefer to donate on an ad-hoc basis
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Most people (62%) have given to between 1-3 charities in the last 12 months. Female donors are more likely to give to a higher number of charities
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Around two thirds of donors give under £20 per donation, although older donors tend to be more likely to donate a smaller amount
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The Spring 2021 Donor Pulse report showed that around four in five (7%) of people remember the charity they donated to when doing so directly with the charity. Nearly half (48%) blame this on unclear branding
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This is positive for charities as the average direct donation is 34% higher than those via a consumer giving platform (£57.67 vs £40.78)
Fundraising events
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A quarter (25%) of respondents to the 2023 Donor Behaviour Insights report take part in events, volunteers, or partake in other fundraising. This variation increases among under 35s and reduces among those over 55
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The 2023 Charity Pulse report found that charities see fundraising events and activities as the fastest growing source of income in 2023 with 53% of good causes predicting a rise in this area
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More than four in five (81%) of charities are planning to hold mass fundraising events either with partners or on their own
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The vast majority (88%) of charities think challenge events will either stay the same or grow this year
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Providing information on how funds will be used was cited by charities as the most useful action they can take to help event participants raise more money. Offering fundraising ideas, taking part in a big name mass event, and providing tips to help people ask for support were also mentioned
Fundraising innovation
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According to the 2023 Charity Pulse report, 69% of charities are looking into using AI to personalise user journeys
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Around a third of charities (34%) are already using TikTok and a further 22% are trialling it.
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Three in ten charities are using podcasts for digital fundraising, and a further 26% trialling them.
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More than one in ten (15%) charities are using or trialling fundraising with cryptocurrency, while 11% are using or trialling VR, augmented reality, and the metaverse
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Research from digital payment experts PayPoint that found that 64% of people who make regular donations to a charity would welcome the flexibility to change the amount they donated and when
Now you understand the fundraising landscape, the fundraising ideas that will work for your audiences, and the platforms you want to use. You have got to know your existing donor base, acknowledged their preferences, and by keeping up with trends, identified crucial areas of growth. The next step is putting it altogether and writing your fundraising strategy.
Every fundraising strategy will be different, depending on the size, resource, and audience of your charity. Small organisations might want to consolidate their existing donor base before embarking on a big growth plan, for example.
Use your existing data to set realistic goals and consider following one of the many goal-setting acronyms out there. Charity Digital likes to use the SMART strategy, making our goals Specific, Measurable, Achievable, Relevant, and Timed. But there are many other options too.
The key is writing your fundraising strategy is to keep it as simple as possible. Keep it clear and concise, knowing irrelevant information will distract you from achieving your goals. Avoid over-strategising and make sure your fundraising strategy offers clear direction - all information included should be essential and accessible to your fundraising team.
Choose the best format
The format of your fundraising strategy is dictated by how your fundraising team works. It might work best in a shared Word document, a sheet on Excel, or as a page on your intranet. Whichever format you choose, make sure it is easily readable and accessible for all interested parties to increase transparency across the organisation. A visible strategy also helps your fundraising team hold themselves accountable to the actions set out.
Making your strategy editable is also important, depending on what stage your fundraising strategy is at. If it is likely to change drastically in the coming months, make sure you are able to make the changes consistent for everyone. No one wants to be working from an outdated strategy.
Microsoft Word or PowerPoint are simple options for presenting your strategy, but if you want it to look more formal, consider using design applications such as Canva or reporting software like Smartsheet, which both come with additional functionality.
Write it
While the research involved in your fundraising strategy is likely to have required input from your whole team, it is important for the sake of consistency that one or two people are responsible for writing the actual fundraising strategy itself.
Set out the areas you want to cover based on the areas and tactics you’ve discussed as a team and then bring it together as a cohesive plan. Ensure you share it with your team afterwards for feedback and revise as needed.
Ask your team to look over their individual areas of expertise when evaluating your written fundraising strategy – spelling and grammar can be looked at once the content is confirmed. Confirming the content is accurate and clear is central to ensuring that your fundraising strategy is followed and of value to your team.
What to include in a fundraising strategy
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How much you raised last year overall
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How many donors you currently have and their demographics
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Where your fundraising income comes from, including website donations, merchandise, fundraising events, corporate fundraising, and grants
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Fundraising opportunities
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Fundraising challenges
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Goals and objectives for coming year
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Resources you will need, including budget
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A timeline of what you hope to achieve
Make the most of email
Amid all the new fancy ways of fundraising, email remains a great channel for fundraising. According to email marketing software Salsa (which specialises in helping non-profits), email marketing results in one-third of online fundraising revenue.
Research has shown that organisations are six times more likely to get a click-through from an email than they are from Twitter, while around 60% of marketers claim that email is their greatest return on investment (ROI), according to email platform Emma.
More than half of organisations rated themselves as fair at email marketing (56%) in the 2022 Charity Digital Skills report, meaning that many charities are already familiar with using it for fundraising. However, there is still room to grow – a quarter rated themselves as poor.
Evaluate social media
The 2023 Donor Behaviour Insights report revealed the importance of social media in encouraging people to donate to the charities they support. Social media posts from family, friends, and colleagues were particularly motivating for donors, as were social media posts from charities themselves.
The most important piece of advice for charities using social media for fundraising is to focus on where your donors – or your prospective donors – are. There are many channels to choose from, from old favourites like Facebook and Twitter to newer kids on the block TikTok and (the slightly more advanced, but ever-changing) Instagram.
Each platform has its benefits and drawbacks. TikTok is an excellent channel for engaging younger donors (the vast majority of users are aged between 16 and 25), but creating videos can be time-consuming and it may be a while before you see results. Twitter is one of the few text-based platforms remaining and holds value for charities in sharing information online, but its recent takeover means there are questions around its future. And more than 50 million people in the UK are active on Facebook making it an excellent place to build a community.
In short, social media is a valuable tool for fundraising, but it should always be aligned with your overall fundraising strategy. Consider the demographics you want to reach and the platforms they use, as well as the platforms used by your existing donor base.
Crucially, try to choose only one or two platforms that work best for reaching them. It is better to consolidate your efforts to build deeper relationships with your donors on these than to generate limited and sporadic support on many.
Prioritise supporter needs
Whether you’re sending out thank you emails or posting a fundraising tweet, the most important thing to think about is who it’s aimed at. It is vital that charities put their audiences at the centre of their fundraising strategy. The easier it is for people to donate, and the more personalised the experience, the more funds you are likely to raise.
At its most simple, personalisation is about respecting your donors as individuals and putting their needs first in your fundraising strategy. Think of your fundraising strategy as ripples in a pond – the donor is the pebble, determining what comes next. Consider all your audiences – long-standing advocates, lapsed regular donors, one-off givers – and think carefully about what might prevent them from donating and what will help them overcome those barriers.
User personas can help you develop supporter journeys that are tailored to your audiences and their various needs. User personas are fictional representations of segments of your audience, defined by factors like age, gender, contact preferences, and much more.
You can build user personas through a mix of quantitative data and qualitative research. Choose nicknames to represent your audience segments – it could be characters from your team’s favourite TV show or book or it could be entirely random. What they represent is far more important.
For example, one user persona could be Pam, a 50-something woman from the South of England who donates to charity on an ad hoc basis and prefers to be contacted by post. Pam broadly represents the user needs of a section of your supporters. Her persona makes it easier for you to keep the demographic she represents in mind when creating your fundraising strategy to reach them. How will Pam be included?
There are lots of persona templates online, including these from Miro and Hootsuite. However, it is important to note that user personas are only effective if they are accurate and relevant to your users.
Start with the welcome journey
Your donor journeys dictate how your supporters interact with you and how often they return to donate. Below are three of the most important donor journeys that fundraisers need to think about in order to increase their engagement with existing donors.
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Welcome journey: Welcome journeys are the steps you take after a supporter makes their first donation. The quicker you are able to welcome them on board, the more engaged your supporters will be. Welcome journeys are essentially about building a relationship with your donors, developing trust between your charity and those that support you. Keep it simple, don’t over-engage, and consider your attrition rates so you can identify the moment that donors stop engaging. This way you will come to understand your donors’ preferences, which will dictate how you interact with them in future.
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Thank you journey: Thank you journeys are what happens after supporters donate. According to research from Salesforce, one in six donors did not recall receiving a meaningful thank you message for their support. But thank you messages are a great way for charities to share with donors the impact of their gift, talk about the work the organisation is continuing to do to address its mission, and ultimately, keep supporters engaged, with the hopes they might return to donate again in the future.
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Website journey: Encouraging donations through your website improves brand recall, meaning donors are more likely to return to support you in the future. It is important that charities effectively steward supporters through your website to the donation page, in as few steps as possible.
Put the fun in fundraising
Alongside the usual fundraising tactics, it might be worth exploring new avenues in your latest fundraising strategy. Gaming and streaming fundraisers, weekly lotteries, and raffles are great and innovative ways to fundraise using digital and many charities are already taking advantage.
Newcastle Dog & Cat Shelter has found great success with its mobile lottery, for example, and has reached 1,700 monthly players, generating more than £85,000 of annual revenue.
- To find out more about mobile lotteries, click here
- To find out more about virtual raffles, click here
- To find out more about gaming and streaming, click here
Consider fundraising platforms
There are lots of excellent fundraising platforms available to charities that can help address a number of challenges.
You might need to generate QR codes to help donors who don’t have cash to donate. Or perhaps you need a platform that can be easily branded for fundraising events. Maybe you simply need a way to process online donations through your website. Whatever your needs, there is a digital solution for you.
Each platform comes with a different combination of features and a whole spectrum of price points so it is important to keep to budget and keep its purpose in mind. How will the platform fit in with your supporter journeys? How will it make your donors’ lives easier? List all the ways it will help you to make a business case for using it in your fundraising that your leadership cannot ignore.
Below, we have a list of some of the best fundraising platforms out there.
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Good for fundraising and events: Enthuse
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Good for large charities: iRaiser
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Good for cashless donations: BOPP
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Good for text-to-donate and lotteries: Donr
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Good for small to medium charities: CAF Donate
You can find out more information about the best fundraising platforms for charities here.
Consider skill gaps
When choosing a digital fundraising solution, it is also important that charities think about their current resources, including the digital capabilities of their fundraising teams. With the wealth of fundraising channels and platforms available, it is very easy to be over-ambitious. Fundraisers must think strategically about the technology they introduce to help.
Start small and work to your strengths, always keeping your users in mind. Fundraising strategies are always evolving. You can always add more techniques to your fundraising strategy at a later date – focus on building the foundations first.
Here are some of the skills gaps affecting fundraising, particularly online, as set out in the 2022 Charity Digital Skills report.
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Charities lack confidence with digital fundraising, despite online giving doubling during the pandemic, according to the Charity Digital Skills report 2022. Almost half (49%) believe they are poor at this and a third (32%) that they are fair.
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More than two in five charities rate themselves as poor when it comes to using website and analytics data to learn about their users. Exactly 40% rate themselves only as fair.
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Around three in ten (29%) of charities say they are poor at making the most of their website.
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More than two in five say they are poor at Search Engine Optimisation (SEO) and ads, an increase on 36% and 39% respectively last year.
Building and revising your fundraising strategy can be difficult, even when you know what to include. The charity sector thrives on its ability to share expertise and experience and fortunately, there are plenty of fundraising strategy examples that organisations can use to inspire them when creating their own.
Below we share some of the most effective fundraising strategies for organisations of all sizes across the charity sector.
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Cornwall Museums Partnership – This is a example fundraising strategy that charities can use for structure, setting out their challenges and their objectives, before moving onto aims, and factors affecting success
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Manchester Community Central – This example of a fundraising strategy will particularly help small organisations, helping them to keep track of their funding sources and develop a fundraising action plan
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Yorkshire Ambulance Service – This strategy was used by the Yorkshire Ambulance Service between 2018 and 2021. It shows their mission, what they are doing to help that mission, and their plans for funding that work
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Chartered Institute of Fundraising – This guide shows small charities how to develop a fit-for-purpose fundraising strategy, including how to map income and risk vs reward
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Charity Excellence Framework – This is an excellent template for charities, helping them to make sense of their fundraising strengths, weaknesses, opportunities, and threats
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Directory of Social Change – This step-by-step guide shows you how to build a fundraising strategy, from the questions you need to ask and the research required before you start
Laura Stanley
Laura Stanley
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