Developing a fundraising strategy
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Posted: Wed 3rd Apr 2024
London is a great city in which to launch a new business or project, giving you access to a vibrant entrepreneurial ecosystem that wants you to succeed.
When starting out, it's really helpful to have a good plan for raising funds. Even if your business idea is small and you think there will only be a small amount of money involved, you never know what's around the corner. Having a strategy in place can lessen the risk and help you plan for different scenarios.
If you need to use a premises (either on your own as a tenant, or renting a space for a short time), you'll need to think more about financing and how you might want to take advantage of different ways to raise money.
Certain grants and funding are only available to particular types of organisations (like charities), so you'll need to consider your own business' structure when coming up with your plan.
Remember: there's no one correct structure for a fundraising plan and no "right way" of going about fundraising. Simply put, a fundraising strategy helps you answer the questions: "Where are we now?" and "Where do we want to be?".
How to approach writing your plan
There are lots of ways of thinking about the funding options for your project.
When preparing to write your plan, you should start with a SWOT analysis, which identifies strengths and weaknesses (internal), and opportunities and threats (external).
You don't need to share this information – it's most useful for your behind-the-scenes planning, so be as honest as you can in your assessment. Strengths and weaknesses are internal, while opportunities and threats are external and may not be as much under your control.
Here are some examples of what you might include in your SWOT analysis:
Internal factors
Strengths
Passionate leadership.
Good reputation for delivering on goals.
Good relationships with commercial partners.
Weaknesses
Limited contacts to rely on in the industry.
Have already used most of your funding from existing grants.
Limited opportunities to earn income from a variety of sources.
External factors
Opportunities
Plenty of public interest in your project.
Local authority funding available.
Shifting external priorities/areas of focus.
Threats
Established competitors.
Change in environmental regulations (could affect premises costs).
Template for your fundraising strategy
Introduction
Explain why you're developing this strategy. Are you fundraising for a specific project? Are you a new organisation? If so, what was the genesis of your idea? You might want to include information on your vision and mission, and how funding will help you to achieve these aims.
Context
Provide more information on the industry you're operating in. This could include information on grants that have been made available for a similar project or direct competitor. Or, you could explain that there are no grants available for your needs, which is why you're seeking funding.
You should also review your current position. That means explaining the experience (or lack of) that you and your team have in fundraising. Detail any outside factors which might affect your ability to raise funds.
Objectives
Explain how much money you need and what objectives you're trying to achieve – grants and funds will want to see that you'll use the money effectively and strategically.
For example, are you just starting out, expanding or adapting to a changing landscape?
It can be helpful to split the funding you require into different areas, including:
Core: funding to support daily operations.
Restricted: for funds from grants that restrict how they can be spent.
Capital: for equipment or premises.
Reaching the objectives
Explain any ideas you have for raising funds. You can split this into general and targeted activities.
General activities might include recruiting people with fundraising experience or making the organisation more attractive to funders.
Targeted activities could look at specific grants, donations or one-off fundraising activities.
Some examples of fundraising activities include friends and family, direct sponsorship, advertising, street stalls and collections, special one-off events (such as shows and dinners), raffles/lotteries, grant funding and crowdfunding.
Capital
If you want to use the funding to take on premises, include a section on capital. This will generally include money for one-off or large expenses (like equipment or buildings), as opposed to resource expenditure, which includes day-to-day running costs like salaries.
Capital expenditure can have a big impact on your short-term finances but then help to generate more money in the future. If you expect to be in this situation (for example, the rental cost of a new premises will be met by sales from those premises in 12 months), give an idea of the timeline for covering and exceeding those initial costs.
Resource
Explain what resources you will need for day-to-day operations and how you'll raise and maintain funds to keep everything ticking over.
Timeline
If you haven't already done so in the objectives section, try to include a timeline for how long it will take you to raise the necessary funds and any factors that could cause delays.
Make sure to give yourself some breathing room in case you encounter unforeseen circumstances and provide dates for key targets.
Get fundraising help
If you're feeling overwhelmed by where to start or the number of options available to you, or if you just need some advice, have a chat with a fundraising consultant.
They can also help you to identify your biggest strengths, which you can use to develop a really effective fundraising strategy.
Your cultural and community space toolkit
If you're reading this guide as part of the toolkit for opening, running and growing a cultural or community space, next look at step 12: writing a successful grant application.
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