How To Write A Fundraising Plan

November 2, 2013

The fundraising plan is not the same thing as a fundraising proposal or a business plan. A fundraising plan is a document that is internal to your business on which you work, and outline how much money you will need, and identify the resources for where you can raise that money. To learn more about writing a fundraising proposal, please take a look at our article on how to write a fundraising proposal.

In this article we will cover how to know how much money you need to raise and identify the various ways to raise that money. Here is a brief video on writing a fundraising plan.

Fundraising Plan Section: How Much Money Do You Need To Raise

Most people will take as much money as they can get. I would too. But that is not how you should approach this section of your fundraising plan. What you must do is identify the next important milestones your business needs to reach, and then add up how much money you need to raise in order to get there.

Here is a tutorial explaining how to figure out how much money it will take to get to the milestone that you set for your business.

As the video explains, you just need to itemize your costs and revenues, and count how much money you need per month, and how many months it will take you to get to your fundraising goal. Here is an article explaining how to calculate the amount money you should try to raise.

Fundraising Plan Section: Fundraising Sources

First, here is a video on 7 sources for your fundraising ideas.

Since I created that video I have actually added an either item to the list. Let’s recap the eight sources for your fundraising. Four of them are from institutions and four are things that more or less just depend on the entrepreneur raising that money.

Fundraising Plan: Loans

The four institutional ways to raise money are loans, grants, investments and donations (often via crowdfunding). There are micro-loan companies like Lendio, Prosper or Kiva. Their loan requirements tend to not be too great. The question is more of whether it is a good idea to get a loan to fund your business. Most of the time, loans are too risky and for that reason are not a good idea. Here is a tutorial on how to get business loans.

Fundraising Plan: Grants

Next, let’s examine how to get business grants. There are many grants available. You can research them on grants.gov or your local government sites or various community sites you may belong to. Here is a video on how to get business grants.

Fundraising Plan: Investors

The next item to add for your fundraising plan is whether you will be able to raise money from investors. Investors come in many different shapes and sizes and they tend to have very different methodologies. One good resource to find investors is AngelList. The general overarching themes that investors do have is that they look for proven team, high growth, and billion dollar markets. So understanding that criteria, it is easy to deduce that most businesses do not fit that profile.

Fundraising Plan: Donations

The next item to focus on in your business plan is whether your business or project will be able to raise donations. Donations can be raised the old-fashioned way by mailing past customers, or calling them. Or donations can be raised through a relatively new way to get donations. And that method is called crowdfunding. Here is a video tutorial on how to raise money via crowdfunding.

The next four points in your fundraising plan on which you can focus is how you can raise money by doing the legwork on your own. The next four fundraising techniques are to 1) get part time work, 2) get money from the revenue of the business 3) try creative ways to raise money like events or something similar, and 4) try to get money upfront from upcoming customers by offering them discounts. Let’s take a look at these in some more detail.

Fundraising Plan: Fundraising Through Getting Work

Let’s stop and consider what happens if you get a full time or part time job to fund your business. You will possibly be able to save a thousand dollars a month or more if you try hard, and you will also have a chance to learn about the industry in which you will do business if the job you get is in the same field as your business. So it is a good thing to do. The challenge with this approach is that you can’t raise too much money.

Fundraising Plan: Your Company’s Revenue

This is many people’s favorite way to raise money. It is very dependable and it is actually the best long-term way to sustain your business. It will help you to not have to rely on investors or other kinds of institutions. Additionally, it is the most natural way for your business to raise money. Note that if you raise money from loans or investors, that process has nothing to do with running your actual business. But if you raise money through your own revenue, then that effort has everything to do with getting your actual business to function right.

Fundraising Plan: Creative Techniques

Some people find success in raising money by doing something creative. Here is one example. A few years ago I was trying to grow a group hiking site. It was difficult and I never raised money for it. But I started doing cool hiking events like hikes to find lost shipwrecks or old cannons that were in the area. And by having those amazing themes, I was able to get lots of people to attend, and sometimes charged money for attending the event. That money went to helping me fund the website development. It wasn’t a lot of money, but it was nice. And the great thing about events is that they can happen on a regular basis. So once you find something that works, you can do it many times more. Here is a video explaining some creative techniques to raise money.

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Fundraising Plan: Upfront Revenue

Sometimes what you can do is to get money from clients upfront. So if you get a customer order, but cannot fulfill that order due to not having the money to create it, you can ask that customer to pay upfront so that you can use that money to create that product for them. You can get them to agree by offering a discount.

Further Fundraising Resources

For more business-starting resources, please take a look at our business planning mobile apps. Here is the iOS business plan app and here is the Android business plan app. Here is the iOS fundraising app and here is the Android fundraising app. And here are our business apps on the Kindle. And here is an article where I give the argument that our Android apps are the best business apps on Android.

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Autor: Alex Genadinik