FAP532

CHAPTER 5
 STRATEGIC PLANNING

• Bare in mind that nonprofits vary widely in terms of

size, available resources and structure.
• There is no one correct structure for a fundraising plan
and no right way of organizing fundraising activity.
A fundraising plan contains:

i) Objectives,

ii) Generic fundraising strategy

iii) An overview of Tactics the organization will adopt in

relation to each form of fundraising undertaken.
 SETTING FUNDRAISING
OBJECTIVES
• Druckers (1990) notes, objectives have a particular
significance for nonprofit organizations.
• Fundraising objectives ensure that the organizations
gives adequate considerations to exactly what will be
achieved and at exactly what cost.
• Objectives are also important part of the plan as they
are the only mechanism by which its success can be
measured.
• Fundraising objectives should be address the following
THREE issues:-
• i) the amount of funds that will be raise.

• ii) the categories of donors that will supply these fund

(i.e individual, corporate, foundation/trust)
• iii) the acceptable costs of raising these funds
• To be managerially useful, good objectives should
exhibit the following characterisrics. They should be:
• 1) Specific – related to one particular aspect of
fundraising activity /or one particular category of
donors. Attempting to combine activities might lead to
confusion and lack of focus.
• 2) Measurable – words such as maximize or increase
are not particularly helpful when it later becomes
necessary to assess the effectiveness of fundraising
activities. They should specify quantifiable values
whenever possible – ie to achieve 10 per cent increase
in legacy/income.
• 3) Achievable – fundraising objectives should be derived
from a thorough analysis of the content of the fundraising
audit, not from creative thinking on the part of managers.
• 4) Relevance – Fundraising objectives should be
consistent with the objectives of the organization as a
whole. They should supply a greater level of details,
identifying specifically what the fundraising function will
have to achieve to provide the nonprofit organization with
the resource it need to continue to offer the desires level
of services provision.
• 5) Time-scaled – good objectives should clearly specify
the duration over which they are to be achieved. Not
only it will help in planning the strategies and tactic by
which they will be accomplished but it also assists in
permitting the organization to set in place control
procedure to ensure that the stated targets will be met.
• Thus, a good fundraising should be SMART (Specific,
Measurable, Achievable, Relevant, Time-scaled)
• Eg. To attract RM500,000 in voluntary income from
individual donors by end of December 2018.
 KEY STRATEGIES

To address the means by which the objectives will be

accomplished. It is useful tpo consider this in relation to
the following categories:-

a) Overall direction

b) Segmentation strategy

c) Positioning strategy

d) Case for support

A) OVERALL DIRECTION

• Pertains to the selection of fundraising methods that

will be use to raise funds.
• Each strategies option is outline below:-

• i) market penetration – involve the fundraiser in

attempting to raise more funds from existing donor
markets. Thus, the organization may be using direct
marketing to attract new donors it nay choose.
• Involves the least risk compare to the four options
• ii) Activity development – engenders a higher degree of
risk because the organization achieves growth by
developing new forms of fundraising that will attempt
to use to solicit fund from existing donor groups.
• Charities employing direct mail to raise fund mights
create a new products such as “Adopt a Child” or
“Sponsor a Cat” that be be used to generate a greater
commitment and loyalty from the donor base
• iii) Market development – involve the organization in
seeking new markets for its existing fundraising
products or activities.
• It will looks to target new groups of donor who have
not previously been addressed by the organization.
• iv) Diversification – constitutes the highest risk
strategy. It involve targeting new donors with new
products and thus the organizations has no experience
on which it can rely.
 B) MARKET SEGMENTATION:
SEGMENTING INDIVIDUAL

• The process of identifying suitable groups of donors to

target.
• Kotler (1991) defines: “the task of breaking down the
total market (which is typically too large to serve) into
segments that share the common properties’.
• Segmentation allows the fundraiser to develop a
specific offer likely to appeal to the needs/onyerests of
certain groups of donor
• The rationale of segmentation is simply that by
focusing on a distinctive set of needs or interests, the
nonprofit can develop a fundraising programme that
uniquely address these issued.
• There are a variety that can be used to segment both
individual and organizational markets as outlined in the
next slide.
• 1) Demographic segmentation: -

• a) age b) Gender c) Family life cycle d)

Income/Occupation e) Race/Ethnicity
• 2) Geographic segmentation:- on the grounds of where
people lived
• 3) Psychographic and lifestyle segmentation:-
segmentation by attitudes, values and value system is more
common especially where organization are actively
attempting to change societal attitudes and behaviours.
• Lifestyle has been defined as ‘a person’s pattern of living in
the world as expressed in the person’s activities, interests
and opinion.
• Lifestyle portrays the whole individual interacting with
his/her environment.
• 4) Post hoc segmentation:- when donors have been
recruited, offering their first donation, it becomes possible
to apply wider range of ‘post hoc’ segmentation criteria
based on an individual’s now known behaviour and interest.
• The goal is to to target individuals with communication
they will find more personally appealing.
 SEGMENTING BUSINESS
MARKETS
• In commercial context segmentation operates at TWO
levels:-
• 1) the nonprofit to consider which organizations it will
target
• 2) who within these organizations should be contacted
• Marketers refers to this group as the decision-making
unit. It typically comprises:-
• i) Initiators – those within the organization that raise
awareness of the nature of the cause or trigger the
initial consideration of whether or not to offer a gifts.
They may have personal link to the cause or have raise
the issue with the management in response to a
communication from the charity.
• ii) Decider – Those individuals who will effectively
take the decision over whether support will be offered.
• They may be managers, more senior staff such as
directors or chairman.
• They may have no direct contact with the nonprofit and
simply take decision on the basis of evidence presented
to them by the other members of their team.
• iii) Participant – members if this group are nominated
by the corporate to take responsibility for the decision.
• They may serve in a committee or meet on ad hoc basis
to consider the merits of a particular approach from a
nonprofit.
• iv) Influencer –These may be influential people within
the organization or they may be external contacts or
consultants. They are merely opinion leaders.
• v) Gatekeepers – These individual ‘guard’ the senior
staff and thus make it difficult for the nonprofit to get
its message across.
• Frequently, a secretary or personal assistant will filter
calls to senior members of staff and will intercept mail.
• They are thus the important category to consider since
they control access to other members.
 EVALUATING THE SUITABILITY OF
SEGMENTS

• In practice there are 7 criteria that can be used to evaluate the potential
offered by each segment proposed.
• 1) Measurable

• 2) Accessible

• 3) Substantial

• 4) Stable

• 5) Appropriate

• 6) Unique

• 7) Sustanable
C) POSITIONING STRATEGY

• Once the organization has decided on appropriate

segments for the fundraising plan to address, it will be
necessary to develop a strategy that will shape the
message the nonprofit wishes to project in the minds of
these targets.
• Positioning :- the act of defining in the minds of the
target audience what a particular organization stand for
and can offer in relation to other nonprofit,
 D) CASE FOR SUPPORT

• It is critical concept of fundraising. It provides a

rationale to donors for their support of the organization
and should engender a sense of immediacy, excitement
and importance.
• In designing a case for support, the document should be
able to address each of the following qeustions
• Who is the organization and what does it do?

• Why does it exist?

• What is distinctive about the organization?

• What must be accomplished?

• How will this campaign enable to be accomplished?

• How can the donor become involved?

• What is in it for the donor – why should they give to this effort?
• To answer these, the portfolio should include:-

• - The mission statement and the ultimate goals of the

organization
• - The specific objectives that the organization is now seek
to achiece
• - An outline of programmes and services that the nonprofit
provides (should clearly express how it implements its
objectives and the impact it has on the cause).
• - A description of the governance structure.

• - Staffing plans –the nonprofit should express how both

paid staff and volunteers will be used in the appropriate
delivery of programmes
• - Statement of non-financial resource – consist of
descriptive of the facilities the nonprofit can offers and
a list of the resources that can be brought to bear on
service or programme provision.
• - Financial statement – a detailed set of the
organization’s account should be including in the pack
of case resources
• - Planning documents – to include both a statement of
the nature of the planning process and copies of
strategic plan the nonprofit may have produced.
• - History – a brief summary of when and why the
organization was created and a list of the past
achievement.