When it comes to creating a budget for fundraising costs and returns, few people are as thorough as Sue Paresky, senior vice president for development at Boston’s Dana-Farber Cancer Institute.
Shortly after she was hired in 1997, Ms. Paresky went through the 13 steps outlined below to create her first five-year fundraising budget. Back then, the institution was raising $32 million annually with 50 full-time staff at a cost of $4.9 million.
Since then, contributions have skyrocketed, reaching $260.5 million in fiscal 2013, the most recent year for which data are available, and the development staff has greatly expanded, to 250 full-time employees. The amount of money Dana-Farber spends on fundraising has multiplied as well: Ms. Paresky says it will total $23 million this year.
That first budget made it all possible, Ms. Paresky says. Before she embarked on the budget process, she conducted a “development audit” to assess her new employer’s fundraising capabilities. Then she carried out the following steps to produce the budget.
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Read all revenue and budget reports produced in the past five years.
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Read capital campaign plans and donor files from the past seven years.
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Analyze trustee and major donor giving for the past five to seven years.
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Meet with the heads of all fundraising programs (e.g., special events, planned giving), other development staff, and key employees in related departments, such as marketing and information technology.
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Meet with key board members, including the board president and the chair of the development committee.
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Meet with the organization’s chief executive to talk about the findings from the previous steps.
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Get permission to create a five-year plan for how the organization could double fundraising returns in five to seven years by spending more on fundraising.
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Draft a five-year budget plan with details for each year on trustee giving, staffing needs, job descriptions, organizational charts, year-over-year revenue projections, costs, and space needs.
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Divide the plan into two parts: one for the fundraising departments (e.g., annual giving, special events, major gifts) and the other for the service departments that support them (e.g., gift processing, human resources, information technology).
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Present the plan individually to the chief executive, the chief financial officer, the chief operations officer, the board chair, and the three trustees who chair the development committee, the executive committee, and the finance committee.
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Make presentations about the plan to the development, executive, and finance committees.
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Adjust some items based on feedback, and submit the fundraising budget plan to the executive and finance committees.
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Get the fundraising budget plan approved by executive committee.
Ms. Paresky has added other budget-planning tools over the years. Now, in addition to creating the five-year budget — a yearlong process that Ms. Paresky starts in the fourth year of each budget cycle — she also oversees the creation of an annual development operating plan, which includes a mid-course review to determine whether changes are needed and a wrap-up report at year’s end that compares fundraising results with earlier projections. In addition, when necessary, Ms. Paresky creates seven-year capital campaign budgets that lay out the goals, costs, likely returns, and other aspects of the big fundraising drives her institution undertakes every decade or so.
Such intensive budgeting and planning, Ms. Paresky says, has helped her achieve several goals:
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Include the chief financial officer, chief operating officer, and other senior leaders, like the vice president for human resources and the director of facilities, in the budget-planning process.
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Make the development office more organized and efficient. For example, because the budget plans include detailed and clear job descriptions, Ms. Paresky says, “everyone knows who does what, and there is no duplication of effort.”
And over the years, Ms. Paresky says that she has learned several lessons about creating viable fundraising plans:
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In reality, a five-year budget is good for only three or four years. Too many things change in five years, given the fluctuating economy, staff turnover, and other factors, Ms. Paresky says, “but the planning process should be for five years, so you can look out to the future.”
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The board should approve the whole five-year plan, not one year or one piece of the plan. Shorter plans may be needed, but the multiyear plan should be approved, as Ms. Paresky says, “in its totality, since all the pieces fit together.”
- The planning that results in a fundraising budget provides opportunities to think outside the box, bring up questions and challenges, and create new efficiencies that lower costs and increase returns.