Strategic Fundraising Plan
Issued: October 13, 1999

Introduction

1. Strategic Planning
2. Fundraising Plan
3. Assessment of Fundraising Potential
4. Contributions to non-profit and donors motivations
5. Fundraising Vehicles
6. Solicitation Strategy
7. Writing Proposals
8. Stewardship and Cultivation
9. Marketing and Communications
10. Fundraising Cost Guidelines
11. Documentation

Conclusion

Introduction

In 1996, Ernst & Young, conducted a feasibility study on supplementary funding for the Canadian Marine Rescue Association (CMRA). The study concluded that the level of support that could be raised through corporate sponsorship was low and unlikely to impact the budget of the organization.

This document, the 1999 CCGA Strategic Fundraising Plan, is a proposal to prove this study wrong and demonstrate that it is possible for the CCGA to diversify funding sources as other organizations did. The Royal National Lifeboat Institute (RNLI) is one example of successful appeal to the public.

At the present time, we know that fundraising concepts have limited support amongst the membership of the CCGA and that the fundraising market potential is very different from one region to another.

While the 1996 study proposed that sponsorship be developed at the national level and implemented primarily at the regional level, this strategic plan proposes both development and implementation at the national level. When the CCGA regions decide to proceed with fundraising on their own, we hope this plan will also be helpful in developing regional fundraising strategies. To enhance the educational value of this document, we have deliberately insisted on defining each concept before looking at their possible implementation by the CCGA.

This Strategic Plan is made of 11 parts ; each part intends to respectively answer the following questions: 

Part 1 : What is a strategic plan ? How is it elaborated ?

Part 2 : What is a fundraising plan ? Part 3 : How can we assess the CCGA readiness and fundraising potential ?

Part 4 : Contributions to non-profit where do they come, where do they go.

Part 5 : What fundraising vehicles should the CCGA use ?

Part 6 : How to elaborate a solicitation strategy.

Part 7 : How to write proposals.

Part 8 : How to cultivate prospects.

Part 9 : Why communication and marketing programs are so important. 

Part 10 : What costs guidelines should be followed ?

Part 11 : Is there any documentation that can help ?

1) Strategic Planning

This strategic plan examines the mission of the Canadian Coast Guard Auxiliary (CCGA) and proposes fundraising programs to achieve it in conjunction with sustained funding by the Department of Fisheries and Oceans.

Strategic planning can be described as the means by which leaders and managers imbue fundraising with vision, purpose and legitimacy. Strategic planning is all about giving direction to fundraising and having concrete plans to implement programs.

In such a plan, the vision for the future must be written to describe the organization’s orderly assessment of the present and its informed view of the direction it has set for itself.

As fundraising must be solidly based upon current mission and guided by a plan, strategic planning for fundraising is basically driven by the need to define a preferred future and figure out how to get there.

Prior to embark in such a journey, the organization must make an internal assessment of its strengths and weaknesses and also make an external assessment of opportunities and threats.

For example, one of the key strengths of the CCGA is its ability to enhance a company’s corporate image. The Auxiliary is a reputable organization providing a vital service to Canadians which can be viewed very positively by corporate sponsors.

On the other side of the coin, key weaknesses of the CCGA are the small target audience and low advertising benefits to the sponsors.

This strategic plan examines the:

• Case for support;
• Potential giving constituencies;
• Volunteer and staff resources;
• Fund-raising programs, and;
• Budget.

It also identifies : ! Fundraising strategies most likely to be productive ! Priorities for new fundraising activities ! Additional investment that may be needed ! Incremental income projections ! Realistic implementation plan and budget

As this is the first document being prepared to launch a global national fundraising initiative, the plan will not go as far as elaborating specific budgets and income projections. These will be developed before each individual fundraising initiative is initiated.

Strategic planning must be vision oriented, market driven and concerned with clients, resources and competition. Fundraising will be an investment in the future of the CCGA. The aim is to build a network of foundation, corporate and individual funders and develop a long-range fundraising plan that includes a variety of sources and approaches.

The planning process must set funding priorities, translate them into good proposals and identify the fundraising vehicles with the highest potential. To determine funding priorities, the organization must identify what is needed to achieve its mission, what it will accomplish and what it will cost.

There are four categories of support:

• Operating: Funds are used to cover the costs of running programs to meet needs;
• Special Projects: Funds are restricted to start or pursue a project with limited time frame;
• Capital: Funds are raised to purchase equipment;
• Endowments: Planned gifts used for long-term investment or operations.

The CCGA has already identified a number of needs toward which additional funding could be directed. These are : Search and rescue costs and operational materials, equipment and training.

Hopefully, this strategic plan must build consensus and commitment among the various CCGA boards to get everyone working at their own pace toward the same goal.

2) Fundraising Plan

Fundraising plans contain goals, objectives, and action steps for securing private funds. They are an integral part of the overall strategic plan.

Each fundraising plan that emerges must list strategies for approaching donors/investors. It must set challenging yet attainable goals. For example, a typical master goal could assert the aim of the organization to reduce the dependency on governmental funds, substantially increase private support, increase and diversify revenue base, involve volunteers, etc.

Financial goals should be set for each area of income, such as :

• Governments grants and contributions;
• Public and private foundation grants;
• Corporate grants and sponsorships;
• Church and civic programs;
• Earned income (fees, sales);
• Individual gifts and bequests.

The plan must also identify cost-effectiveness measurements and reasonable cost guidelines.

3) Assessment of Fundraising Potential

Before undertaking a fundraising campaign, it is important to test internal readiness and external feasibility. To enable the CCGA to approach fundraising effectively and efficiently, a good analysis should look at an organization’s existing sources of revenues and compare the situation with similar organizations.

This was done in 1996 by Ernst & Young with five case studies looking at organizations which are similar to the CCGA.

Internal Readiness

The Ernst and Young study concluded in 1996 that ``The CMRA is not prepared to step straight into fundraising with any level of success. (...) The organization is at an estimated 3-5 years away from being in a position to fundraise efficiently.``

Tremendous progress has been made by the organization since. The CCGA already adopted a mission statement and identified its most important values and its greatest strengths as an organization at the Mississauga Policy Forum in June of 1998. Some of the questions discussed were :

Where are we today and what are we selling to the public, to our members and donors?

Is what we are today what we want to be tomorrow? What kind of financial resources will we need to finance the objectives we have in mind for tomorrow?

Are the CCGA volunteers behind our vision and do they understand the goals ahead? Where do they fit in?

The responses to these questions will help guide the CCGA in deciding what organizational form is necessary for effective production of income from the private sector. How will volunteers be involved? Should the CCGA appoint an advisory board? Should the CCGA appoint an honorary spokesperson? What will be the roles of National Council, the regional boards of directors, national and regional business managers, etc. Should we involve fundraising consultants?

External Feasibility

Fundraising does not begin at high levels of performance. A key prerequisite is to know what the public thinks about the organization (how the CCGA is perceived) before starting to ask for contributions. The CCGA must ask itself : What is the most important for the public to know about our programs and services? Answers to this question can help greatly with decisions on what methods of solicitation to use and what results can be expected from each.

The CCGA must also analyze the following elements:

• Visibility/Image in the community. Do our potential publics perceive us in the same manner we perceive ourselves? How do we communicate our goals and objectives to the public?
• Potential for support base.
• Projected goal.
• Perceived capacity to fund raise. With whom are we competing?
• Mission importance among other community priorities. Do potential publics approve of our work and endorse our objectives?
• Is there anything particularly unique or distinctive about our approach to the field?
• Credibility.
• Potential for identifying potential prospects.

One of the fundamental problems facing the CCGA is its lack of marketability. The organization has a low profile outside the marine community and companies tend not to sponsor organizations with low profiles. Also, the CCGA audience reach (members + people being rescued + boating public) was estimated by Ernst & Young to be in the tens of thousands at best which provides little leverage to the organization in a highly competitive sponsorship market.

At the same time, the CCGA has some of the best ingredients to raise its public and corporate image : the organization is unique in the services it provides and it offers high quality programs. Uniqueness is very appealing for some sponsors.

Internal Readiness and External Feasibility analysis may have one of three basic outcomes :

Go ahead: The conditions and leadership are there.

Take certain actions first: These can be internal steps toward staff readiness, board preparedness or may be an external task like implementing a communication and public relations program to raise organizational visibility in the community.

Do not go ahead in the foreseeable future: This can be the result of low public esteem, no financial support indicated, etc.

In 1996, the Ernst & Young study estimated that the profile of the CCGA wasn’t strong enough to entice major sponsorship from corporations looking to obtain significant publicity. ``There is little awareness that the CMRA is both distinct from the CCG and is volunteer based.``

By having a low public profile, the organization found itself in a position where it was very difficult to raise funds.

Despite this, Ernst & Young recommended implementation of a two-step fundraising strategy to develop a donor base from which to grow in future years.

Step 1 : Public Awareness Campaign
Step 2 : Fundraising campaign including a variety of activities

The name change from the CMRA to the CCGA certainly did a lot of good for the organization’s credibility. On the other hand, it may have reinforced the perception of the public that the CCG and CCGA are a single entity. The need for efficient communication and marketing programs remain obvious.

4) Contributions to non-for-profit: Where they come from and where they go

Where the contributions to non-profit organizations come from (1995):

• Individual 81%
• Bequests 7%
• Foundations 7%
• Corporations 5%

Where does the fundraised money go to (1991):

• Religion 54%
• Education 11%
• Human Services 8%
• Health Care 8%
• Arts & Culture 7%
• Others 12%

Every year, in every community, for every case, the big money comes from gifts and bequests of individuals. Corporations provide only 5% of the total giving to non-profit organizations. Roughly 27% of that 5% goes to Health and Human Services.

Donor Motivations

Why individuals give?

• 55% feel that those with more should help those with less
• 43% for the feeling of personal satisfaction
• 39% to give back to society
• 31% to serve as an example to others
• Other reasons are to:
• Help make something happen
• Bring attention to an issue
• Support the provision of a service
• Promote the common good
• Respond to a crisis
• Encourage cooperation

Attitudes about fundraising improve when people realize that the investment goes beyond the organization and into the community.

Why individuals don’t give?

• Personal preferences: Higher priorities
• Contrary beliefs: Disagree with mission
• Finances: Can’t afford to give
• Lack of communication: Organization/Mission not known
• Relation with prospect: No connection/linkage
• Management: Misuse of donations, Poor policies, High fundraising costs, Poor management

Why corporations give?

Most corporate contributors support the groups that improve their public image of good corporate citizen. By allocating dollars to a good cause, companies are getting goodness by association; the company is getting community recognition and is looking good to the general public as a result of the donation.

Other reasons are to:

• Complement employee interest
• Show business support
• Demonstrate leadership
• Create a healthy climate to conduct business

At the same time, companies are looking for ways to bring charitable giving more directly in line with corporate goals and needs. In other words, they want to use their gift dollars in creative ways to get ``a big bang for the buck``, to leverage each gift into something of value to the company, and to receive some tangible return on their investment.

Corporations spend their money to get what they want. If the CCGA represents the values that corporations want to reach, chances are it can make a deal that will benefit both. The Auxiliary must however demonstrate that, dollar for dollar, it is the best place for the company to put its money. The CCGA must therefore develop strategies by which it will help corporations achieve their goals of more profits, more customers and happier workers.

5) Fundraising Vehicles

In this section, we will identify the methods commonly used to raise funds and elaborate on those we feel are the most promising for the CCGA.

To raise money successfully, the CCGA must choose the right development roads to follow and once it has decided on its strategy, the Auxiliary must monitor its progress.

Sixteen basic methods are employed to raise funds. The effectiveness of these methods requires careful consideration of strategic criteria plus aspects unique to each one.

• Annual campaigns
• Personal solicitation
• Gift groups
• Membership drives
• Direct mail
• Special events*
• Small business solicitations*
• Corporate solicitations*
• Cause-related marketing
• Foundation solicitations*
• Project funding*
• Capital campaigns
• Major gifts
• Planned giving*
• Product sales*
• Workplace giving (United Way)*

* Indicates type of vehicle to be prioritized initially in this Strategic Plan.

Special Events

Special events such as the CCGA Annual Rescue Competitions tend to be of greater interest to most foundation and corporate funders than are general requests to cover operating expenses. Special events are labor intensive but when successful, they provide excellent community visibility. Other advantage are :

Active roles for volunteers who work for the organization; 

• Opportunities for leadership training and development;
• Opportunities for ``friend-raising``, cultivation of new prospects and donor relations;
• An occasion for public education about the CCGA and its mission through media coverage.

It is proposed that sponsors be identified and proposals made by the CCGA National Office to support the annual regional SAR competitions and the national competition.

Planned Giving

Approximately 7% of Canadians are leaving some of their assets in their wills to non-profit groups. However, according to a study, 42% said they would consider a bequest to a non-profit group if approached.

Establishing a system whereby people are asked to bequeath money may be a relatively straight forward initiative for the CCGA to put in place, and in the long term, it could become a worthwhile source of revenue. After all, two thirds of the revenues raised by the RNLI come from legacies and wills.

Between 80 and 90% of large gifts and bequests come from donors who have given to an organization in the past 3-5 years. The CCGA may need to start by building a broad base of regular contributors and build relationships.

For a relatively modest contribution, the donor will get credit now for a very large gift that will benefit the charity later. Example in the U.S.:

A 40-yr. old woman can pay $1,199/year for five years for a $100,000 life insurance policy. She can deduct the payments from her taxable income as a charitable gift. So, for a total of $5,995 less $100 a month, she leverages a $100,000 gift. The payment to the charity is a certainty and there is little paperwork.

Marketing Planned Giving

In the coming months, it is proposed that the CCGA National Office develops in conjunction with a specialized firm informational and promotional material to educate the public about planned giving methods:

Booklet 1: A case statement on the mission, purpose and values of the CCGA.
Booklet 2: Describe various planned giving methods and their advantages.

Corporate Fundraising

Corporations usually give through :

• Company foundations ;
• Direct corporate giving ;
• Executive discretionary funds ;
• Marketing budgets ;
• Research and development budgets ;

Typically, sponsors’ interest and funding levels are directly correlated with audience reach. This is why the CCGA needs a marketing plan to increase the number of people it reaches and, in doing so, raise the appeal to a majority of corporate sponsors.

It is proposed that the CCGA keeps rising its profile through communication and marketing programs and set up an appeal that would be directed at several national corporations. With regular opportunities for request submission, and a commitment of the time required to cultivate companies, gradually increasing income can be realized.

One must understand however that a corporate contribution is by far the toughest dollar to rise. For every corporate donation, there are often more than 100 requests. Most grant making now is based on a competitive application process. Successful corporate solicitations involve planning time, staff-consuming research, cultivation of potential donors, writing and re-writing proposals, and meticulous follow-up.

Five steps can be identified for successful corporate fundraising :

• Develop an effective case for support. The case for support must address the specific services provided by the organization and how a grant will sustain and enhance the organization’s programs and services.
• Conduct research to determine those companies that may be interested in supporting our cause. The purpose of research is to target those companies that can support the CCGA so we can focus cultivation and solicitation on those that are the most likely to provide support. Once a list of potential corporate funders has been created, the next step is to develop accurate profiles of their giving.
• Develop and implement a cultivation program designed to attract the interest of potential corporate donors.
• Initiate a solicitation strategy at the appropriate time.
• Provide post-grant follow-up and additional cultivation that will encourage future support.

The CCGA also needs to be flexible with its sponsorship arrangements because companies have a variety of interests and target markets. Sponsorship proposals must be tailored to the individual company’s marketing needs.

Cause-Related Marketing

Cause-related marketing is an advertising campaign that includes a promise to give a certain percentage of the increased revenue from product sales to a charity.

A non-profit organization that agrees to the use of its name as part of the promotion can expect to receive a cash benefit and a share in the promotional visibility.

Cause-related marketing provides a mutually beneficial relationship between a corporation and a non-profit organization in which the former pursues marketing and promotional objectives while the latter seeks fundraising and public relations objectives.

If a non-profit organization is recognized by corporate decision-makers as being able to enhance market acceptance of products and services and to support the establishment of corporate social responsibility, the cause-related marketing can be a good fundraising strategy. However, it is usually understood that the concept works best for organizations that are highly visible and appealing. At the present time, no single CCGA program stand out as providing opportunity to increase a company’s sales. Nevertheless, it is proposed that the CCGA National Office remain attentive to any opportunity that may arise.

The partners must clearly identify what they have to offer. The corporation must also state what it is looking for in terms of markets, credibility and public image. Finally, the non-profit organization must be willing to adjust and align the thrust of the appeals to the prospect’s concerns.

6) Solicitation Strategy

When the CCGA will have decided who its best prospects are likely to be, it must develop a solicitation strategy to educate them into becoming future donors. Fund raising methods must be well defined as well as the intended use of funds raised.

To be successful in fundraising, the Auxiliary must be able to rely on key ingredients. It must promote the fact that it has :

• Programs based on identified community needs ; 
• Past achievements that speak for themselves ; 
• Programs that are highly effective and provide measurable results ; 
• Qualified and respected staff ; 
• Volunteers that are recruited carefully ; and, 
• An effective organizational structure.

With these conditions in place, the CCGA can develop a solicitation strategy following these steps :

• Develop initial strategy (define objectives, evaluate prospect market) 
• Select fundraising vehicle 
• Identify qualified prospects (those who share your values) 
• Prepare fundraising plan 
• Prepare communication plan 
• Cultivate prospect 
• Involve prospect in programs to make them feel the importance and urgency of the need 
• Evaluate reaction 
• Prepare full presentation and make the formal solicitation 
• Follow-through 
• Begin donor relations program and perform recognition

The 70/20/10 rule of thumb

• 70% of fundraising efforts should be positioned at cultivating and soliciting those prospects who already have strong ties with the organization ; 
• 20% of fundraising efforts should target other prospects who are already familiar with the organization ; 
• 10% of fundraising efforts should be directed at prospects outside the traditional market of the organization.

Donors are always interested in knowing :

• What is the scope of the organization ? 
• How long has it been in operation ?
• Does it have a planning process ? 
• What is the organization’s standing in the community ? 
• Will the investment go beyond the organization and into the community ?

7) Writing Proposals

Most foundations/corporations require solicitations to be made in a written document called a proposal. It must persuade the donor/investor that the non-profit organization is a good investment.

Before writing a proposal, the organization must determine which projects are more likely to be funded as most funders prefer to give grants in support of special projects and new ideas rather than general operating expenses.

When the priorities of the organization that should be developed for submission to foundations and corporations are identified, the time has come to start thinking about writing proposals.

In general, a proposal includes the following components :

• Executive Summary
  • Summary of the proposal’s main points. Identification of the organization. Qualifications to carry out the project. Specific purpose of the grant. Anticipated end results. Amount of money requested. Total project budget.
• Organization Information
  • Establish the competence and credibility of the organization and its volunteers. Describe the mission, expertise and outcome of major programs and services on the community. Links with similar organizations. Explain organizational structure, financial viability and ethical principles (fundraising policy). Stress the uniqueness of the organization. Position the CCGA as an organization that meet needs, not as an organization that has needs (Donors give because organizations meet needs, not because they have needs.).
• History and Background
  • Founding date. Operation statistics.
• Problem Statement
  • Statement of the problem to be addressed. 
• Statement of Need
  • Identify, document and validate the community need that is related to the concern and mission of the organization. Explain why the need should be addressed and how it is consistent with the organization’s ability to respond to that need. Describe proposed solution.
• Project Description
  • Say what the project will do and how it will advance the mission. Elaborate on the contribution the project will make to the community. Identify the proposed strategies and activities to tackle the problem. Identify the distinctive features of the project.
• Plan of Action and Project Methodology
  • Explain why the plan is cost-effective, who will be working on the project. Who are the other cooperating organizations. Give a detailed description of the activities that will take place to achieve the objectives. Elaborate on the methods to measure and assess the results.
• Goals, Objectives and Estimated Outcomes
  • State the ultimate result and the expected immediate and long-term results. Estimate how many people will be impacted. Explain why the CCGA can accomplish these goals and what are the measurable outcomes.
• Budget & Funding Sources
  • Say how much money is needed. Position the contribution as an investment in the communities being served. Identify other donors.
• Conclusion
  • List the benefits you can offer to the donor. Explain how will its support be acknowledged and publicized.

It is proposed that a number of foundations be identified and solicited by the CCGA National Office.

8) Stewardship and Cultivation

The traditional notion of stewardship refers to ensuring that a donation is spent wisely and in accordance with the donor's wishes. That notion has evolved and stewardship has come to mean the essential function by which organizations develop lasting relationships with their donors/investors. Stewardship can now be defined as the continued involvement, cultivation and care of those who give or, in other words, the process of involving and appreciating donors/investors, and bringing them into a deeper relationship with the organization after the donation is made.

The cultivation stage makes the prospect aware of the need for the services that donated funds will support. It includes educating the prospects by explaining the needs and use of donations. When trying to secure a large donation, cultivation usually represents 80-90% of the entire process. For example, the average $100,000 gift to a university requires at least seven personal visits over eighteen months.

Stewardship requires building and maintaining relationships with prospects and contributors. In seeking and engaging donor-investor, organizations are making a commitment to communicate regularly regarding the return on their investment : the impact of the gift and the continuing importance of the need the organization is meeting in the community.

With the high level of competition that exists, organizations have little success in asking for initial or renewed gifts when they do not cultivate the prospects and become stewards to their donors.

Cultivation also means you shouldn’t communicate with prospects only when you want money. Prospects should be included on mailing lists to get the organization’s newsletter, annual report, brochures, media coverage and marketing material.

9) Marketing and Communication

Lack of awareness is one of the major obstacle facing the CCGA. While the organization is looked upon with respect and appreciation by those familiar with it, the vast majority of the Canadian population does not have an understanding of what the Auxiliary is and what benefits it provides.

On the opposite side, the Red-Cross is a non-profit organization that corporations like because it has: 

• a long history of productive partnerships with corporations ; 
• high visibility 
• a universal appeal 
• an extremely committed corps of volunteers

In 1999, the CCGA initiated a program of communication to express its purpose and goals, and to articulate the mission to targeted audiences. The program includes Public Service Announcements and a number of public relation programs aimed at raising the profile of the organization.

The principles of good public relations are : 

• Deeds, not words, have the greatest influence on public opinion ; 
• Public opinion must be earned, it cannot be bought ; 
• Leadership and action are required ; 
• Publics must be kept informed.

The elements of a typical communication program are :

• An annual report designed for donors, volunteers and friends ; 
• A fact book to provide a mid-year update on the organization’s operation ; 
• A newsletter to inform members and donors ; 
• Press releases to communicate news of significance ; 
• Specialty brochures to promote fundraising programs ; 
• Mass marketing efforts such as Public Service Announcements ; 
• Targeted events to convey special information.

In short, to be successful at fundraising, the CCGA must be successful in raising its visibility in the public.

10) Fundraising Cost Guidelines

Reasonable fundraising cost guidelines must be established. For example :

• Benefit events : 50% of gross proceeds
• Corporations and foundations : $0.20 per dollar raised
• Planned giving : $0.25 per dollar raised
• Capital campaigns : $0.10 per dollar raised

11) Documentation

Information such as corporate giving criteria is sometimes hard to find. When considering a prospect, fundraisers must try to gather as much data on the contribution program as possible. Information such as the prospect’s priorities and procedure for application, prior giving history, the amount, purpose and project details of previous grants made.

There are several excellent software packages designed to help track and retrieve donor information. There are also a number of directories that publish corporate and foundation giving policies, field of interest, grantmaking procedures and trends. For example :

Corporate Community Investment in Canada and Campaign Outlook are published by the Institute of Donations and Public Affairs Research (IDPAR), at the Conference Board of Canada.

The Canadian Directory to Foundations published by the Canadian Centre for Philanthropy.