How to write a fundraising proposal

by

Many people on my apps write to me with a question of how to write a fundraising proposal. Some of the time I get that question, the question is a little bit mis-phrased because the person isn’t certain of whether they even need a fundraising proposal. So in this article I will explain when you need a fundraising proposal and how to write a fundraising proposal for various instances. Here is a brief video on how to write a fundraising proposal and almost more importantly how to understand when you need one.

What Is A Fundraising Proposal

The fundraising proposal is a document that outlines why you need to raise money, and what that money will be used for. In particular, what milestones will your project reach with that money. This document is meant to be given to individuals or organizations who would then decide whether to grant you funding in the way they fund projects.

But many individuals and institutions do not necessarily ask for a document that is just a fundraising proposal. Some organizations ask for business plans of various lengths, or some standard documentation that they require. So chances are that the documentation you really need is not necessarily a fundraising proposal document, but a different form of documentation.

Different Kinds Of Fundraising Sources

There are a number of different sources of fundraising. Institutional sources of funding can be better understood if we split them into four groups. The four groups are loans, grants investors, or donations (often via crowdfunding).

Who Asks For A Fundraising Proposal

Investors do not ask for fundraising proposals per se. They usually have other particular documentation that they ask for. When it comes to loans, banks do not usually lend to businesses which have not started. And that is the majority of businesses who try to get loans. For most businesses, the source of loans is more frequently the micro-loan sites like Lendio, Kiva, Prosper, or a number of similar other companies. And those companies do not require a written fundraising proposal. You may be asked for a fundraising proposal by some organizations who may give you grants or donations. But that would be the minority of potential organizations who give grants or donations.

How To Write The Actual Fundraising Proposal

You should have your current financial and tax documents ready. Some of the documents you may need are forms 990, 501(c)3 letter, annual report, business information, financial statements, audit, fundraising permits and support letters. Also add your business plan which includes your balance sheet and the cash flow analysis statement. That will show the current financial health of the business. Here is how to write a cash flow statement.

Additionally, make sure to have a section for the funders and high-level managers of the business, explaining their professional backgrounds. Additionally, explain what the money you are raising will be used for. Explain what milestones you are going to get to with this money and don’t just say “to pay employee salary and buy equipment.” Also, provide a timeline for when you think you will get to your milestones with the money you are raising.

And most importantly, have a very solid understanding of the requirements that your potential funder has. As explained above, there are many different kinds of individuals and institutions that fund various kinds of projects. And each of them has a slightly (or largely) different set of requirements. And most of the time, their fundraising proposal requirements give you a great guide for how to structure your proposal.

And lastly, while this should go without mentioning, the grammar of the fundraising proposal must be perfect. I often assume that it will be, but many people do not submit well written fundraising proposals. If you submit a poorly written document with grammatical errors, that will largely decrease your chances of being funded. So it might make sense to have someone with good writing skills to look over your proposal and correct various grammar issues.

You may also be interested in how to write a fundraising plan.

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. And please check out and subscribe to my YouTube channel where we cover many marketing topics.

Author: Alex Genadinik

by