A Fundraiser’s Guide to Creating an Annual Plan That Actually Helps You Hit Your Goals

Lasting stable ministries have efficient and laser-focused annual plans that prioritize three kinds of gifts: restricted, unrestricted, and legacy. 

These kinds of annual plans help you get ahead of familiar challenges, invite bigger and better gifts, impact more people with your important work, and stay on top of your goals as a team. They also fit on one page, are reviewed quarterly by the team, and tend to infuse excited energy throughout an organization.

Sounds like something that’s too good to be true, right? I might second that notion, except that my clients have created annual plans like the one I just described. How? By using the 5 Step Annual Planning System that I’ll walk you through in this article. 

Read to the end and you’ll find Quarterly Annual Plan Review Meeting notes that you can use to make sure your annual plan functions like a living-breathing document that supports your goals throughout the year. 

NOTE: This article is a recap of a webinar. You can access the replay HERE along with slides and PDF downloads.

Most Annual Plans vs The 5-Step Annual Plan

It’s not uncommon for fundraisers to be handed an annual plan at the beginning of a new year that was never discussed with them. Nine times out of ten, it includes a bigger fundraising goal than the previous year. This can feel defeating. Working in the development world is often lonely — your colleagues don’t understand what you’re up against. Before the increased fundraising goals there was already a lot on your plate. But now? 

Now, you’re up against:

• Bigger goals. 
• Conquering these increased goals alone.
• And, not having enough time to achieve this new goal, not to mention the tasks you had before all this.

This is not why you choose a career in the world of philanthropy. It’s just not! 

You chose a career in philanthropy because you wanted to help the important work of ministries flourish. You wanted to make sure people would continue to be impacted by these organizations. And you wanted to build meaningful relationships with the individuals who valued investing in the important work of nonprofits. 

The good news is that being overwhelmed by goals, alone, and not having enough time doesn’t (and shouldn’t) have to be your norm while you’re ensuring the financial success of ministries. You can live into your heart-felt calling alongside an engaged team and reach your goals on time by implementing the 5-Step Annual Planning System. 

Benefits of the 5-Step Annual Plan System 

The 5-Step Annual Plan System is different from other annual planning systems in five ways:

1. Engages many stakeholders. A good annual plan shouldn’t sit exclusively on your desk. The 5-step annual planning system encourages shared ownership from the CEO, CFO or Lead Pastor to your entire development team. 
2. Establishes purposeful commitments and boundaries, which empowers you to say “no” to shiny new ideas that would distract from your core goals. 
3. Provides predictability. A good annual plan breaks audacious long-term goals into yearly and monthly milestones. These smaller specific goals allow you to predict your success and potential income.
4. Creates clarity and transparency. Each project is assigned to a point-person so everyone knows what’s happening and who is doing what. 
5. Empowers leaping growth instead of incremental growth. Incremental growth keeps you on pace with inflation; it doesn’t grow your impact. The 5-Step Annual Plan grows your impact.

With a bold well orchestrated plan you can move farther faster. Let’s dive into making one of these plans! Shall we?

The 5-Step Annual Planning System

“A goal well conceived is a goal half way achieved,” says Michael Hyatt, co-creator of the Full Focus Planner. This is exactly what Nick Tofteland found when he implemented the 5-Step Annual Planning system at Minnehaha Academy. 

He said, “We saw results in year one, but we saw tremendous growth in year three. At any given time I was able to break our goals down into three simple questions: How much? For what? From whom? This simple specificity allowed my team to methodically and strategically hit our fundraising goals on time.”

As the name states, this system is five steps. 

• Step 1-2 is with the strategic decision makers of your organization — usually the CEO or Lead Pastor, Chief Development officer (CDO), and chief financial officer (CFO). 
• After step 1-2 are complete the CEO or Lead Pastor, and CFO should start the budgeting process for the organization.
• Step 3-5 is where you and your development team roll up your sleeves and workout how your goals are going to become real. 

When you’re finished you will have outlined the dates, dollars, deadlines, and doers needed to reach your goal.

STEP #1: Clarify strategic priorities and gift revenue.

Ministry organizations that are financially stable over the long term and grow their impact start their annual plan with strategy. 

The purpose of this step is to clarify what big strategic goals your organization has and what the big picture revenue goals are to meet those goals. These are most frequently three-to-five-year goals and may look something like this:

• Double the number of people reached. Expense over 3 years: Current operating budget needs to increase by $X. 
• Increase impact by establishing a new program. Expense over 3 years: $Y. 
• Securing future impact by growing endowment funds. Expense over 3 years: $Z.

If these are your goals and the finances required, you need to raise $XYZ over the next three years. These specific three-year goals guide next year's goals, which lead to the question, “What needs to happen this year so that we can raise $XYZ over the next three years?”

STEP #2: Assess specific needs for the coming year. 

Based on your three-to-five year goals, your second step is to define what needs to happen this year. I recommend having a clarifying conversation with your CEO and CFO around these five questions:

1. What funding do we need this coming year to realize our most basic strategic priorities? 
2. What funding do we want this coming year to move us further toward those priorities?
3. What non-gift income and endowment distributions are projected to fund these needs and wants? 
4. Which needs/wants can be best positioned as restricted or budget-relieving giving opportunities to donors?
5. What does this mean for the gift income goals we should establish for unrestricted, restricted and endowment/legacy giving during the coming year?

At the end of this step you should be able to say, “If we reach $ABC by the end of the coming year we will be on track to raise $XYZ for our strategic three-to-five year priorities.” 

The completion of this step should establish a shared ownership of your goals with your organization’s decision makers. That same ownership gets established with your development team throughout the following three steps.

STEP #3: Establish targets. 

Now that you and your ministry decision makers have clarified organizational goals, it’s time to make a game plan with your team to hit your annual fundraising goals. 

During this process you establish two things:

1. Dollar targets for the three most essential forms of gift income:

Unrestricted gift income. These gifts will fund your operational budget.

Restricted gift income. This income usually funds specific programs or projects.

Endowment gift income and legacy gift expectancies. This income ensures the sustained flourishing of your ministry.

2. Number and percentage growth targets for the most basic measures of fundraising health:

Donor retention. The donors you keep from year-to-year.

Donor acquisition. The new donors supporting your organization.

Legacy donors. The donors who establish a planned gift or fund an endowment.

The results of this conversation should answer the question: How are we going to take our big annual goal and make it realistic — something we can imagine accomplishing?

There's nothing wrong with this step being heavily informed by past gift performance in terms of numbers of gifts, donors, and planned gifts that you’ve received. Between this information and what you know of your donor’s capacity to give you should be able to make informed decisions.

STEP #4: Identify gift sources.

Now that you know your target numbers, you're going to identify gift sources, constituency segments, and specific prospects needed to reach those numbers. Ask these question for each goal: 

1. Which sources of income will fund each goal?  (e.g. individuals, organizations)
2. Which constituency segments will we target? (e.g. alumni, foundations)
3. Which specific prospects are most ready/able? (e.g. 50-year reunion class, XYZ Fund)

Here are some things that you should be considering in STEP #4:

• If you’ve been too dependent on a particular source of income for too long (e.g. one or two grantmakers), what other sources do you need to pursue in order to diversify your income stream?
• If you have a constituency that you’re too dependent on (e.g. long time members) and haven’t developed others, what goal can you set that will launch your work with those donors you’ll need to depend on in the future? 
• Are there specific individuals or organizations who are ready to make a large gift? Who are the 5-10% of your prospects that could help you get you 80-90% of the way to achieving each of your goals?

Pre-identifying source and constituency segments will allow you to look at your annual plan and take immediate action. This is a critical step to making your annual plan actionable and eliminating overwhelm. 

STEP #5: Establish strategies, timelines, and assignments.

Finally, it’s time to dive into what might be called the nitty-gritty. This step includes assignments, timelines, and strategies for each source and segment you created in step #4. When you’re finished with this step you should have answers to three questions for each goal:

1. What needs to happen in relation to each of the prospect segments to achieve our fundraising goal? 
2. What day will specific mile-markers toward this goal be completed by? (I recommend monthly mile-markers.)
3. Who is responsible for completing these tasks?

Don’t peter-out as you map out this step! Even if you can’t yet define each month’s main tasks, trust that it will become more clear as you make your progress throughout the year. Take the plan to the finish line and remember, this is a working document that you will make adjustments to continuously. Even imperfect tasks and deadlines give you a starting point.

Download the One-Page Template

If you’re holding your breath with overwhelm you can let it out now. 

We have a template for you that has a space and title for everything you need to include in your annual plan (download it HERE). Better yet, it’s only one-page! And the goal is to keep the completed template on one page. This is not a workflow of step-by-step details for each task. It is a map charting the course for how you’re going to get where you want to go. 

You can’t do everything. Even if you have a large staff and abundant resources you still need focus. James Clear, author of Atomic Habits points out the impact of focus, “In order to concentrate on one thing you must, by default, ignore many other things.” That’s my gentle way of saying, “Stick to the one-page annual plan and knock the goals on your list out of the park.”

Quarterly Annual Plan Review Meeting Notes

How many times did you look at your annual plan last year throughout the year as you were creating monthly  goals and weekly schedules?

If you’re like most fundraisers the answer was probably rarely. You knew how much money you were supposed to raise and kept that top of mind, right? I understand. However, this approach to goals usually results in falling behind deadlines and a faulty understanding of where you are in relation to the ultimate goal.

Michael Hyatt, who we mentioned earlier says, “The secret to staying on top of your personal and professional life is to schedule regular times for review and reflection.” Specifically, Michael recommends weekly and quarterly reviews. I practice both of these for myself and my business. And, in my almost 40 years of work in philanthropy, I have noticed that the most successful organizations routinely meet to discuss and alter their annual plan at least on a quarterly basis.

A quality quarterly annual review meeting should include three phases: Look back at the previous quarter, look ahead at the coming quarter, and look at the next quarter.

Look Back

1. Are we on track? Are we ahead?
2. What can we celebrate?
3. Have any priorities changed?
4. What needs increased attention?

Look Ahead

1. Are we on track? Are we ahead?
2. What can we celebrate?
3. Have any priorities changed?
4. What needs increased attention?

Next Quarter

1. What plan can remain in place?
2. What plans need to be revised?
3. Who is assigned to what?
4. What do we WANT to be able to celebrate?

If the celebration question for each phase seems superfluous, don’t give in to that thought. Nehemiah 8:10, says that the “joy of the Lord will be our strength.” Taking note of the things that we can celebrate and be joyful about is a worthy investment of our time. It gives us strength when the going is hard and empowers us to not grow weary in doing good. We can be confident that as we work to further the kingdom of God, He will give us momentum to rejoice over. 

It’s Time to Make Your Annual Plan

You can do this. That being said, we realize we threw a lot at you. So here are three different starting points to get initial traction: 

• Download and print the one-page template if you haven’t already.  
• Do you already have an annual plan? Start plugging your current goals into the one-page template and assigning them monthly milestones and point-persons. 
• Schedule a quarterly review meeting even if it’s just with yourself. 

If you still feel like you don’t know where to start or you want a decision-maker on your team to understand this system, schedule a call with us HERE. We believe in this system tremendously because we’ve seen it transform the financial stability and longevity of so many ministries. If there’s a way we can help you implement this system, we want to do it!

This article was co-authored by Brenda Moore, CFRE and Sisi Roose.