The social impact world is fueled by fearless leaders, compassionate volunteers, love of the communities we serve, and of course – funding. 

Without proper financial support, our work wouldn’t be feasible, and countless individuals would lack access to lifesaving programs and resources. 

This is why proper fund development work is so important – it helps us help others.

Read on to draw inspiration from innovative strategies and tried-and-true ways to set your organization up for success. 

Strategic Planning in Fund Development

The first step in the fund development process is to PLAN. 

People often mistakenly jump in without a plan, acting more reactively than proactively. They see a grant opportunity and quickly apply without any structured approach.

The result? Disorganized proposals that miss important components funders are looking for or receiving funding that isn’t sustainable. 

So, be careful not to underestimate the importance of thoughtful planning that is not tied to a funding opportunity but to the goals and mission of your organization. Proper budgeting, timing, and staff allocation depend on it. 

Here are just a few questions you should ask yourself before you begin sourcing funding:

  • What percentage of private, public, corporate, and individual donors is ideal for your organization? 
  • What systems or processes do you have in place to manage funds awarded?
  • What core partners should be at the table?
  • Is your team prepared to pursue and oversee the implementation of funds awarded? 

Need more inspiration? Check out our blog post about strategic planning for nonprofits.

Diversifying Funding Streams

When it comes to funding – don’t put all your eggs in one basket.

If all your money comes from one source, you are increasing your risk of not being funded by them or anyone else. Relying on just one funding type can create an unsustainable plan for your organization. Additionally, other funders will view that as a risky investment, as they need to ensure other funders are supporting you, as well. 

Every organization is different, but your funding sources should typically be a mix of public, private, corporate, individual donor, and in-kind support.

People often forget to include in-kind dollars as a funding stream in their grant budgets, but they absolutely are. If you have 20 volunteers, each volunteering 20 hours a month, calculate the monetary value that equals and leverage it when writing proposals. Check out this resource from True Impact on how to calculate in-kind support.

Considering Partnerships

It’s always important to consider your partners in your fund development strategy.

It may be appropriate sometimes to compensate your partners, and if you’re considering this in your strategy, you can plan for this more appropriately when pursuing funding opportunities.

Transparency is vital to healthy partnerships. If you are writing a grant proposal that includes information about your partners and how they support your organization, do your due diligence and engage your partners in the upfront process of the proposal development. It’s good for your relationship, and their support can strengthen your proposal.

Aim to get a letter of support from your partners as documented proof that they are committed to your partnership. If funders can confirm your partnerships are the real deal, it mitigates the risk that comes with investing in any organization. And if your partnership moves forward, ensure you have a friendly agreement in place.

Suppose you have received funding to work directly in a specific community. In that case, it’s a great rule of thumb to ensure you engage with others in the community, like community associations and residents, so that they are included in, or at least aware of, the decisions happening in their community. This can also open the door to future partnerships or opportunities.

Metrics and Evaluations

When applying for funding, you must use both quantitative and qualitative data to back your work up. (Tip: Don’t underestimate the power of storytelling.

If you are a brand new organization, you may not have any or very little data, which can make getting funding difficult. 

This is why relationship building is so important. When you have people who champion what you’re doing and what you’re going to do, you can receive much-needed funding from individual donors and focus on seed money. 

Consider also having an improvement process or evaluation strategy that shows funders you’re committed to continuous learning and improvement.

Donor Engagement and Retention

Once you receive funding, keeping your donors up to date with what their dollars are working towards is an excellent way to stay on good terms and secure future grants. Remember, funders are people, too, and are seeking partners to build relationships that are transformational, not transactional.  

One way to do this is to engage your funding partners in your programming, what you’re doing, what you have coming up, your success stories, and more. Invite them to see your program in action, for a tour of your facility, or a participant’s graduation!  An informed funder is typically a happy funder.

Another tool for good relationship building is proper grant management once you are awarded. Ensure that you’re managing your grant properly, and keep the lines of communication open before, during, and after your grant cycle to build the relationship.

And remember to always thank your funders! They have gone out on a limb to support your organization, so a quick “thank you” can go a long way. A quick note when you receive the funds and notes along the way as you report back on your progress are always welcome.  Some organizations even find hosting a donor appreciation event goes a long way – it shows your gratitude for the partnership, and your donors can meet each other and see the impact of the investment of others. 

Next Steps

Effective fund development in the social impact sector is built on thoughtful planning, diversified funding sources, transparent partnerships, donor engagement, and metrics that showcase tangible impact. 

Remember that each dollar secured helps support lifesaving programs and makes a tangible difference in the communities we serve.
If you need any further help with your fund development strategy, we can help. Schedule a complimentary discovery call today!