Ten Questions Every Nonprofit Board Member or Executive Needs to Answer Before Fundraising

A way to assess the costs of fundraising programs in comparison with the return that investment brings. In fundraising, it’s best to understand Numbers, details, and time. Here is a list of ten questions to help you start.

1. Are you raising more money every year for basic operating support?
   1. For every nonprofit that is not planning to go out of business, funding MUST increase every year.
2. Does your funding come from several different sources or channels, with no single source accounting for 60% or more?
   1. If your organization receives nearly two-thirds of its budgetary support from a sole source–whether a grant from the country government, an annual banquet, the United Way, or telemarketing program-you run the risk of disaster. You may be in trouble if even 40 or 50 % of your funds come to you through a single source.
   2. There are a total of eight sources of income a nonprofit, this, of course, may differ for every nonprofit. They are Donors, fundraising store, foundation grants, government contracts/grants, city grants/funds, fundraising events, corporate support, and endowments.
      
      1. Donors are the individuals who donate to your organization for a one time gift or ongoing gifts. You want the donor to become a loyal donor thus you cannot treat your donors as just a source of money, they are people too with their own responsibilities.
      2. Fundraising store is the products your organization decided to sale on its online store to generate profit. This can be anything from pieces of jewelry, T-Shirts, and anything creative; remember to be innovative and not to overprice your products.
      3. Foundation grants are grants from major foundations like The Robinhood Foundation or Open Society; however, don’t hold your breath for too long, because the competition is high and the wait depending on the foundation can be long. Don’t be discouraged to try your luck and apply for grants that apply to you. In Haiti’s case, there aren’t that many grants a local nonprofit can apply to, this is why we WILL disturb this norm.   
      4. Government contracts/ grants, something that lacks in Haiti. This fund would be an investment by the government to a local organization to work on programs that they themselves cannot accomplish alone.
      5. City funds/grants, similar to government grants. The Haitian city municipalities lack the funds to invest in a local organization. And if they so happen to have, the amount is very little.
      6. Fundraising events can consist of any sort of events your organization ask for an in-person donation or charge a small fee. This, of course, can be costly. To bring enough money to guarantee the organization’s financial stability will require an investment from your organization. Fundraising event cost varies by organizations and type of event, so we suggest that you assess your hidden cost before hosting a fundraising event.
      7. Corporate support is exactly what its name implies. The private sector in Haiti does not have enough fund to invest in grants for nonprofit organizations. If they do donate it’s because they have a close relationship to that particular organization.
      8. An endowment “is a donation of money or property to a non-profit organization, which uses the resulting investment income for a specific purpose. “Endowment” can also refer to the total of a non-profit institution’s investable assets, also known as “principal” or “corpus,” which is meant to be used for operations or programs that are consistent with the wishes of the donor. Most endowments are designed to keep the principal amount intact while using the investment income for charitable efforts.”
3. Do you have enough cash to pay your bills at any given time, plus a reserve fund to allow for contingencies?
   
   1. We learned that many local nonprofit organizations do not have enough cash flow to sustain themselves and that they only have two or three sources of income which include money from their board members, money from international nonprofits or International Embassies which are not always guaranteed, as well as, small foundation grants.   
4. Does every member of your Board-without exception-contribute money at least once a year?
   1. Not all gifts need to be large.
5. Is one senior level person clearly designated as responsible for planning & monitoring your fundraising efforts?
   1. Local organizations do not have a fundraising department which to them this practice is foreign. The resources are not available to them like many international organization.
6. Are your financial resource scaled your organization’s goals?
   1. Can you honestly say your resources are adequate to match the ambition level of your goals so that you’re not greatly underfunded?
   2. “Your goals should be more ambitious than your resources” (Steven Mourning)
7. Are you raising money from reliable and predictable sources to cover your fixed expenses (overheads) an, if necessary funding variable expenses from less predictable sources?  
   1. A nonprofit organization has both fixed and variable expenses.
      1. Fixed cost can be Payroll or rent. These expenses are predictable.
      2. Variable cost can be training, fundraising. These expenses are unpredictable.
   2. Do you have a source of income to keep you afloat?
8. Is your record-keeping system efficient and accurate?
   1. Do you know (numbers, names, etc.) your top ten donors?
   2. Do you send out “thank you” letters or emails to your donors?
   3. Do you know how, where, and by whom your donor giving records are maintained, what information is on file?
9. Are your organization’s fundraising activities scheduled in advance and carried out on time?
   1. Do you keep a calendar system?
10. Does your organization have clearly understood gift policies and guidelines on fundraising ethics, preferably in writing?

Ten Question Source: The hands-on guide to fundraising strategy & evaluation