Strategic planning to make your fundraising  pay off

If you want to empower your organization’s fundraising for the long term, two words:

Strategic Planning.

You will need a planning and budgeting process that creates substantial investments in your operation. Real investments in performance improvement rarely pay off in full the same year you make them. Significant gains require a longer-range plan. That’s why we advocate a three- to five-year strategic fundraising planning cycle.

Two Ways to Go

You can take one of two approaches to creating your fundraising strategic plan.

One way is simply to prepare a plan with a multi-year pro forma forecast demonstrating return on investment. This is a business plan.

The other way, which entails a lot more work – and rewards – is to undertake a true strategic planning process. One great thing about this approach is it typically involves the board. That means your staff will have board buy-in.

You have many options for strategic planning. We’ve found that hoshin kanri, an import from Japan that found widespread use through the quality movement, is especially well suited to fundraising. It draws on the same thinking as Lean and Six Sigma. Hoshin kanri clearly links high-level goals and strategies to daily operations.

Hoshin planning offers a better way for people to work together. Unlike conventional strategic planning, which is a once-every-so-often effort, hoshin engages the entire organization in an iterative, ongoing process that acts as a highly visible management compass. It produces organizational alignment – that shared sense of direction that allows a fundraising operation to be greater than the sum of its parts.

No Dust Here

You won’t have to worry about your plan gathering dust. One of the most obvious ways a hoshin-based plan is different is that you usually find it on a wall rather than on a shelf.

Whatever your strategic planning process, every staff and board member of a fundraising organization should be able to clearly articulate the strategic plan and understand how his or her role in making it a reality. The plan must be a simple-to-understand, clear, actionable road map that your staff and board have collaborated to create. Then they need to continually work together to shape the organization’s future and its unfolding strategy.

Measures and Metrics

However you do your planning, use metrics and measurements. They are imperatives of performance improvement. Set key critical-to-quality process measures, with emphasis on cycle time. How many prospecting events will you hold each month? How many connections should you make at each event? How many prospects should you be cultivating at each stage?

CTQ criteria let you know how you’re doing and create a way to alert you when a particular measure is or isn’t being met.

Measure early, and use metrics that correlate with success. Instead of simply measuring things at the end, such as how much money was raised or the total sum each development officer brought in, use measures that help you see at key points whether you are on track for a positive outcome. Not only will you get what you measure, you will build a reliable forecasting system. Your CFO will love you.