Fundraising Strategy - Our Detailed How to Guide

Posted on 04 April 2018 by | Category Fundraising Resources
Fundraising Strategy

Great fundraising starts with a great fundraising strategy!


If you aren’t targeting the right funding avenues with your current fundraising strategy then you’re wasting your resources. If you don’t have targets, you can’t measure your progress. If your team doesn’t have direction they won’t achieve their potential, or worse, they’ll leave. So, having a great fundraising strategy is crucial but how do you go about developing a strategy that will work and that you can implement?

There are many different ways to develop a fundraising strategy. It needs to be appropriate to the nature of your charity and proportionate to its size. It also needs to meet the objective –achieving existing funding needs, organisational growth to increase impact, or maybe a specific major project goal.

When we are developing a strategy for a client we take all this into account in planning our methodology. However, we wanted to make the following guide useful for as many charities as possible, so we are going to set out a general practical approach which should be appropriate for most established charities with a track record of fundraising who are seeking organisational growth.

Follow these steps and you’ll be on the right path to developing the strategy that your organisation needs and deserves!

Fundraising Strategy Infographic


Our infographic below provides a quick overview of the process for developing your fundraising strategy. Scroll down for the full detailed guidance.

Fundraising Strategy Infographic

How to Develop a Fundraising Strategy – Full Guide


1. Define the Funding Channels that the strategy will address

The funding channels are the different categories of income that the organisation is already accessing or might expect to be able to access in future.

Defining these categories now will enable you to take a consistent approach to comparing past and future results as well as making comparisons with other charities. Your top level categories might look something like this:

  • Individual Giving
  • Community Fundraising
  • Trust and Foundations
  • Corporate Fundraising
  • Public Sector Funding
  • Earned Income
  • Other Income

It is important that with your final list of categories you also have a clear breakdown of sub-categories. For example, legacies would normally form a component of individual giving, sponsored challenge events would fall under community fundraising. Smaller charities may only need a fairly simple breakdown, whilst larger charities may need multiple levels beneath the top categories.

To analyse your own income history this ideally needs to align with your internal income reporting. To compare with other charities it needs to align with their reporting. SORP helps here but it’s worth having a look ahead at the potential comparators you will analyse before finalising your categories.



2. Internal Review

Once you have defined the funding channels, it’s time for the first element of the review phase.  For any strategy, it’s important to look internally at what approaches the organisation currently takes, what it has achieved over recent years and what resources are at its disposal.

By thoroughly understanding and analysing internal factors you can establish where the potential opportunities lie and what the current barriers to growth are. You can also take stock of the wider strategic direction of the organisation and consider how this may affect fundraising direction.

The internal review could include:

  • Organisational aims and objectives
  • Organisational strategic plans and targets
  • Stakeholder consultation
  • SWOT analysis (Strengths, Weaknesses, Opportunities and Threats)
  • Fundraising resource breakdown
  • Income analysis by source and trends over time
  • ROI analysis and trends over time



3. External Review

After the internal review, it is helpful to assess the external environment. This includes looking at what other similar charities are doing and how they are performing as well as any benchmarking data from voluntary sector studies and reports.

Without looking at what others are doing and how the rest of the sector is performing, you won’t have a full picture of the opportunities that could work for you. It’s really common for our clients to have pre-set notions of what they should focus their fundraising strategies on. Sometimes these are spot-on but more often than not, the external review provides the research that shows alternate strategic approaches are more likely to work for their charity.


Comparator Analysis

We usually start the external review with comparator analysis. The first step here is to identify suitable comparator charities. These need to be working in the same thematic or geographic space as your organisation, provide similar services and be similar or larger in financial turnover.

You may already know of suitable charities, otherwise Guidestar UK is a good site to help find candidates. The advanced search function enables filtering by turnover range along with keywords.  It’s best to start with a list of 6-10 comparators. From here you can do some initial research via their charity commission entry and website to refine the list down to 3-4.

To refine the list, we are looking for comparators that:

  • Show an income growth trend over recent years
  • Have comprehensive detail breaking down income and expenditure in their report and accounts
  • Appear to demonstrate good practice in their online communications and social media presence

Once you have decided on the comparators, you can go ahead and research their fundraising and marketing. Key areas to look at include:

  • Income mix – values and proportions
  • Income mix trends over time
  • Fundraising resources, costs and ROI
  • Approaches to different funding streams
  • Any strategic plans
  • Any elements of strong practice or good ideas that you can learn from


Sector Trends

There are a range of options for identifying sector wide trends in fundraising ROI and typical funding mix. These can be really valuable in providing broad fundraising benchmarks to assess your success to date and potential targets going forward. Sources include:

  • NCVO Civil society Almanac – an annual publication which analyses income and expenditure data for over 165,000 voluntary organisations across the UK. The data is a few years old due to reporting delays but gives some good broad indices.
  • Fundratios – Institute of Fundraising (IoF) in partnership with the Centre for Interfirm Comparison assess and benchmark sources of voluntary income. Again this data is a few years old and uses a fairly small sample size but gives some additional detail including ROI by income source.
  • Charities Aid Foundation – annual UK giving report looking at frequency of giving and average gift size
  • nfpSynergy – provide a range of research reports
  • CharityComms Digital Benchmark – This is a paid service for UK charities to pool digital communications data in order to benchmark against other charities.


Other External Factors

Depending on the sector your charity works in you might want to undertake an analysis of other potential external factors that may affect your fundraising strategy. The Opportunities and Threats identified as part of your SWOT analysis may cover this sufficiently or you may want to break it down into more detail using PESTLE analysis.

PESTLE stands for Political, Economic, Social, Technological, Environmental and Legal. Under each area you can list emerging and potential changes that could have an impact on your organisation. For example at the time of writing, GDPR (General Data Protection Regulation) is a major new Legal requirement for fundraisers and charities to address.



4. Funding Source Review

Having done all the research and analysis across the internal and external review, now is the time to bring it all together.

Going back to your funding source categories, you can use your findings to develop a detailed SWOT analysis for each source. The balance of strengths and opportunities against weaknesses and threats should give you a good basis to assess which funding sources have the most potential to generate returns for your charity over the short, medium and long-term and establish a priority ranking on each source.

Once you have prioritised the funding sources you want to focus on you can then set out your plan for implementing each. This should draw on the opportunities identified through comparator analysis and other external research as well as drawing on your previous fundraising experience and results from your internal review.



5. Targets and Resource Requirements

A strategy needs targets, otherwise how will you measure success? But how do you set those targets? You have two main options:

  • Research led target identification
  • Organisation led target identification

Let’s consider each and you can decide which is best for you:


  • Research led targets

In this approach you let the research guide your individual targets. Let’s say your internal review identified that individual giving has been trending up at 6% per year over the last five years. You have also identified that your donor stewardship has been weak. Could you double that growth rate with your new implementation plan? What growth rate have your comparators seen over the same period for that income source? Are their fundraising resources comparable to yours? Is there scope for increasing, reallocating or upskilling your fundraising resources? Can you expect steady growth over the strategy timeframe, or will the gains mostly come after a period of investment? Using all of the research findings and asking lots of questions like these, can help you to derive suitable targets for each source. Your final target is the sum of all of the funding sources you are pursuing.


  • Organisation led targets

This approach is where the Board or Senior Management Team set an overarching target. This could be based on existing financial needs or a particular growth target. Let’s say they want to double the organisation’s income within five years. The strategy is then aimed at identifying the:

  • Feasibility of achieving that target
  • Resources needed to do so
  • Growth rate required for each funding source over each year of the strategy implementation

The same approach as before can be taken to identify initial target figures. These then need to be adjusted to achieve the overarching target. This in turn has an impact on the implementation approach and resource requirements. You can go back and revise the implementation approach accordingly or you can create additional implementation options so cost benefit can be assessed on the research led target model vs the organisation led target model.


Resource requirements

Subject to the approach you have taken, the resource needs may be modest or may require substantial additional investment. There may even be a number of options for implementation, such as outsourcing elements of the fundraising, different staffing structures or different income targets.

It is a good idea to set out all of the options in a matrix with pros and cons of each, costings and potential impact on target income.



6. Fundraising Strategy Action Plan

The final and perhaps most important element of your fundraising strategy is the action plan.  This takes your final implementation plan and sets it out in individual actions. These actions each need to be assigned to an individual or team, with a set deadline. The action plan is a live working document and should be updated on a continual basis with progress reporting.

Like the strategy itself, the action plan needs to be appropriate to the scale of your organisation and your growth targets. Larger organisations or those with ambitious targets will need more comprehensive operational plans.

It is essential to schedule regular reviews of the action plan to ensure all stakeholders remain focussed on planned actions and targets.




Follow this guide to developing your own fundraising strategy and you will be well on your way to turbo charging your fundraising.

Remember that a fundraising strategy does not belong on a shelf. Keep it fresh and keep on developing it with more research and experience as you go. You also need to ensure buy-in from all stakeholders. Involving them in development is an important factor here along with clear communication on the vision for what growth will enable your charity to achieve.

Review of the strategy and action plan should be an ongoing agenda item for SMT and Board meetings – it is the means through which your charity will sustain itself and grow.

We hope you enjoyed our guide to developing your fundraising strategy. If you have any questions, feedback or just want to chat to one of our fundraising consultants, then please get in touch.




Other Pages you may be interested in

Our Fundraising Strategy Services

Fundraising Strategy Case Study – How we supported The Sickle Cell Society to double their income in just three years

Grant Funding Prospect Research – How to guide

Grant Fundraising – 12 Top Bid Writing Tips