The importance of annual plans
Annual plans are great. As a fundraiser you can't live without them, because it's your blueprint for fundraising success. Below a few reasons why I think you have to spend at least 10% of your whole year working on next year's plans.
What do I mean with an annual plan in fundraising? In short, I would say a narrative document which explains all of your fundraising activities, and answers all why, when, how, who and how much questions.
Obviously the annual plan should be linked to the overall organizational strategy. And attached to the narrative there should be a kind of excel document explaining the numbers in detail per activity per month…
That sounds like an awful lot of work and, to be honest, it is! But it's only the most important document in your fundraising department, so let's do it anyway...
Involvement and agreement
The fundraising team needs to own the plans, so they have to work on it from the start. As a fundraiser you're constantly thinking about the future, because you can always improve and refine your program. But you really have to start thinking about next year at least 3 months before you have to submit your plan. Are there any brainstorms going on in your nonprofit to discuss all programs and channels you are (not) using in this period? The more fundraisers are stimulated to think about plans for next year, the better these plans get executed.
But involvement and agreement also relates to your Management Team or Board, because annual plans are ideal for explaining what it is that you are actually doing. This is the best moment to get them excited for your plans. If you are running a major donor program they need to be aware what is expected from them in this area. And as one of the bigger expenditure posts in your organization they need to be aware of the financial implications of both the investment and the returns of short and long term fundraising scenarios.
Ambition and target setting
Annual plans are showing ambition and targets, hopefully. There should be compelling reasons for an annual plan not to show any income growth, but there is absolutely no reason not to show ambition to improve your fundraising program. In general the Head of Fundraising gets his/her target from the General Director, MT or Board. Then s/he has to translate that target in a set of preconditions and a strategic framework for the fundraisers to work with, e.g. maximum expenditure budgets, individual targets per segment or channel, focus areas, et cetera, without limiting them in their own ambition and thinking.
Ideally your annual plan gets translated into individual development or performance plans, which includes SMART targets per fundraiser. It all started with the long term organizational strategy; this is translated into strategic objectives for fundraising; these are translated into quantitative and qualitative goals for the fundraising department; these goals should be translated into an annual target, which are divided into specific projects, segments, channels, etc. where the fundraisers take individual responsibility.
Planning and reasoning
Obviously, an annual plan is used for a general overview of when and what activities take place in the next year. This planning can be relatively general if, and only if, all activities are supported with more detailed planning documents. In the Excel document there should be a higher level of detail, which is needed for the financial projection of income and expenditure throughout the year. The narrative should focus on explaining why you have made certain choices to focus on area A and B or prioritize C above D and E, why you use your financial or human resources in such a way, want to start a brand new fundraising channel or explain your latest tests to battle your first year attrition.
Monitoring, evaluation and accountability
As a fundraiser you can keep quiet to your boss and keep your results in the dark so nobody will point to you when targets are not met. Or, and this is a bit of a crazy idea, you can explain them as much as possible and let them in on any 'secret' you have so they understand you need to prioritize and squeeze the resources you have to get the desired results. The latter will work a lot better. The whole accountability bit is a lot easier if your management is well informed, because they won't get any surprises.
Being more open and honest also gives you a reason to skip all sorts of general excuses towards higher management why the target is so difficult to reach. Reasons are only worth mentioning if they are sufficiently substantiated. It's known, but also adds no real value to mention in one sentence, that you are in a very saturated market and next year it's going to be even more saturated...
The annual plan, and especially the document containing all the monthly figures, gives an excellent tool to monitor the progress of your plan throughout the year. Only if you monitor your activities and results well, you can decide whether you need to adapt your strategy to reach your target.
What fundraisers often forget is that when they leave the organization, they leave with a substantial amount of fundraising information and insights stored in their head. A well documented annual plan is a great source of information for any successor in the years to come. Look back and see if you can find a proper archive for the strategic choices you've made in the last 3 years. Would the current situation make sense for someone who starts tomorrow?
Good luck with your plans!
[This post is slightly adapted from a post that first appeared on 101fundraising.]