5 Steps to Take Before Starting a Fundraising Program - Charity Savant

5 Steps to Take Before Starting a Fundraising Program

So you’ve decided to start fundraising. Congratulations! This is a big decision and an important strategic step for your charity.

Many charities get stuck in a grant-writing rut. That vicious cycle of applying to governments and foundations for new programs while struggling to raise operating funds can be draining. Not to mention keeping track of restricted funds and complying with vigorous and time-consuming reporting.

So it’s wise that your charity is thinking about diversifying revenue streams. With unrestricted funds coming from individuals, events, companies, etc., charities are afforded the flexibility they need to really focus on their work, and make a real impact. And this includes taking some measured risks, innovating, and sometimes even learning from failure.

But before you start hitting the pavement and fundraising, you’ll need to pay attention to a few key pieces of infrastructure that your fundraising program will need in order to be successful.

1. Get a donor database. Immediately.

A database is arguably the most important component of any fundraising program. And no, that Excel spreadsheet you’re using to track donations does not constitute a database.

A good database sets your fundraising program up for success. At a bare minimum, you’ll need software that keeps track of your donors’ contact information, tracks what fundraising appeals donors responded to, records tax receipt information, and manages your donors’ contact preferences. Your database should also allow you to generate reports, and pull mailing lists.

Before you start looking for a database, consider your goals five to ten years down the road. You may only have 100 donors to keep track of today, but if you’re poised to grow, you’ll want to make sure your database can keep up. Trust us, migrating databases is no easy task. So plan for your fundraising success and find software that will grow with you.

2. Set up your payment processing systems.

Donors are accustomed to having different giving options, and they will expect not differently of you. Make sure you’re able to accept donations by cash, cheque, and credit card (all the major ones at least). Bonus points if you set up a system to accept donations of securities.

You’ll also want to make sure you can accept donations online. If you can’t afford online donation systems like Frontstream or Classy, there are options. Paypal offers discounted rates for nonprofits, and organizations like CanadaHelps process and receipt donations and send you the funds.

In addition to having different ways to give, your organization will need to have internal procedures and controls in place to receive, process, record, and receipt donations. Getting these procedures approved by an auditor adds an extra layer of security and reduces risk at your nonprofit.

3. Think security.

Handling money comes with the need for extra security and privacy. Remember: Donor names, addresses, and payment information are confidential information and need to be treated as such. At the same time, you’ll likely need to keep documentation of gifts. Consider investing in a locked filing cabinet for your office to store documentation, and a safe for donations that have yet to be deposited or processed.

There’s also important privacy legislation such as PIPEDA and CASL all nonprofits needs to comply with. There may also be security and privacy laws that are specific to your sector. Before you start fundraising, make sure you have policies and procedures in place to comply with these laws.

4. Get your donor relations ducks in a row.

To make giving as convenient as possible, customer service is key. Your organization should be able respond quickly to donation inquiries, whether by phone, mail, or email.

Before you start fundraising you’ll also need to need to create a template for tax receipts that can be sent with your thank you letter. It’s also helpful to draft a few seasonal thank you letters so you can switch up your messaging throughout the year.

You may also want to set up a postage account so that you can use business reply mail, making it easier for donors to give. If you’re planning to start a direct mail program, a postal account is absolutely essential and will save you money.

5. Dedicate resources to fundraising.

Fundraising is not magic. Unless you commit actual resources to fundraising, it will not work. On a shoestring budget, it can be hard to justify spending money on what some see as “overhead,” but without this investment, you risk a stable cash flow and the opportunity to really make an impact.  It’s up to you where to spend those funds – whether it’s to establish an annual program, or to bring in leadership gifts – but what’s important is that there is an investment in the fundraising program to begin with.

Keep in mind, resourcing your program goes beyond dedicating a portion of your budget to fundraising. It also means allocating staff time, hiring qualified fundraisers, investing in infrastructure, and getting all of your staff and board of directors on side.


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