Fundraising Strategy

You have a development director, a grants manager, a coordinator, and a board that asks for “more fundraising” without saying which kind. A nonprofit fundraising strategy has to settle seven decisions before any plan is worth writing, and this page walks through them in the order a working team can handle. By the end you should know which revenue line you will grow, which you will hold, what retention target you are working toward, and what the board owes the effort.

What a fundraising strategy has to decide

Start with the revenue mix, because every other decision depends on it. National giving is a useful reference point, not a target. Giving USA 2026 puts 2025 charitable giving at $617.20B, and the split by source looks like this.

Source	2025 giving	Share	Change from 2024
Individuals	$394.2B	64%	up 4.1%
Foundations	$117.15B	19%	up 5.7%
Bequests	$62.19B	10%	up 19.7%
Corporations	$43.67B	7%	up 3.1%

Your mix will not look like that table, and it should not. When Bridgespan studied 297 nonprofits founded since 1990 that reached $50M in revenue, over 90% had one dominant revenue category, and that category averaged 90% of revenue. Government dominated for 40% of them, earned revenue for 30%, and small individual gifts for 3%. The strategic decision is which line you concentrate on, not how to spread across all of them.

Growth lines come next. Pick one line to grow and one to hold steady. A development team of four that tries to grow events, grants, monthly giving, and major gifts in the same year grows none of them. The line you grow gets the director’s calendar. The line you hold gets a coordinator and a checklist.

Retention is the decision most teams skip, and it is the one with the clearest math. The Fundraising Effectiveness Project reports that donor retention across its data set edged from 43.1% to 43.3% in 2025, while donor counts fell 3.6% for the fifth straight year. Dollars still grew 5.0%, almost entirely from major and supersize donors. If your retention sits near that average, you replace more than half your donor file every year just to stand still. The planned guide Donor retention strategy: the math, then the plan works through the arithmetic and the fix.

Major gifts follow from the retention numbers. The FEP data says growth is coming from fewer, larger gifts, which means an organization with no major gifts program is standing outside the room where the money is moving. That does not require a major gifts officer on the payroll. It requires the executive director and the development director to hold a few hundred relationships between them and to spend a fixed number of hours a month on them. Major gifts strategy before you hire an officer sets the portfolio size and the calendar.

Grants need a stop rule more than a start rule. In the Nonprofit Finance Fund 2025 survey of 2,206 nonprofits, 81% received foundation funding, 64% said less than half their grants and donations were unrestricted, and 48% said grants had gotten smaller since late 2022. Among those with government funding, 55% were paid late and 84% expected cuts. A grant that covers part of a program’s cost and arrives late is not revenue, it is a loan you made to the funder. Grant strategy: which grants to skip gives you the screen.

Campaigns are a separate decision because they consume the whole organization. A capital or comprehensive campaign is only a strategy choice if you can answer three questions with data: who gives the top ten gifts, whether they have said so, and what happens to annual giving while they do. Capital campaign feasibility: are you ready covers the readiness test and what a feasibility study should cost.

The board’s role is the last decision and the one most often left vague. “Everyone fundraises” produces nothing because nobody owns anything. The strategy should state what each board member gives, how many introductions each makes per year, and which staff member follows up. Board member fundraising expectations that hold has the wording that survives a board meeting.

How to sequence the seven decisions

You cannot make all seven decisions in one retreat. Sequence them so each one uses the output of the one before.

Order	Decision	What you need in hand	Who	Time
1	Revenue mix and concentration	Three years of revenue by source	Finance lead and ED	One week
2	Retention target	Donor counts by year from the database	Development lead	One week
3	Growth line and hold line	Steps 1 and 2	ED, development lead, board chair	One meeting
4	Major gifts portfolio	Top 50 donors by lifetime giving	ED	Two weeks
5	Grant screen	List of open and pending grants with restrictions	Development lead	One week
6	Board expectations	Steps 3 and 4	Board chair and ED	One board meeting
7	Campaign decision	Steps 4 and 6, and only if a building or endowment is on the table	Board	Defer unless forced

Once the seven decisions are written down, the plan is a two-week job. How to write a nonprofit fundraising plan turns the decisions into targets, a calendar, and the document the board signs, with the template.

The numbers that matter

Three numbers tell you whether the strategy is working. Track them quarterly and put them on the board dashboard.

Retention rate is the number of donors who gave last year and gave again this year, divided by the number who gave last year. The FEP average of 43.3% in 2025 blends first-year donors, who return at much lower rates, with repeat donors, who return at much higher ones. Split yours the same way. The FEP’s Q1 2025 release found that donors giving $1 to $100 made up 57.0% of all donors and their number fell 11.1% year over year. If your small-donor file is shrinking at that pace, acquisition spend is filling a bucket with a hole in it.

Cost to raise a dollar is total fundraising expense for a line divided by what that line raised. The Association of Fundraising Professionals puts direct mail acquisition at $1.00 to $1.25 per dollar raised and a renewal mailing to those same donors at about $0.20. It also ranks the other methods without fixed numbers. For medians by budget band, built from tax year 2023 Form 990 filings, read How much should a nonprofit spend on fundraising?.

Method	What AFP says about return
Direct mail acquisition	$1.00 to $1.25 spent per dollar raised
Direct mail renewal	About $0.20 spent per dollar raised
Special events	Lower return than a major gifts program
Capital campaigns	Much higher return than an annual fundraising program
New planned giving program	May show zero return for the first few years

Compute the number per line, not for the whole department. A blended figure hides an expensive event behind a cheap major gifts line.

Concentration risk is the share of revenue that comes from your single largest source, and from your single largest donor. The IRS already forces one version of this calculation. Under the Schedule A instructions, a public charity must show that at least 33 1/3% of its support over the current year and four prior years came from governmental units, the general public, and other public charities, and gifts from any one donor above 2% of total support are excluded from the count. Run the same logic internally with a stricter line. The reason is cash. The NFF survey found 36% of nonprofits ended 2024 with an operating deficit, 52% had three months or less of cash on hand, and 18% had one month or less. An organization with three months of cash cannot absorb the loss of its largest source, whatever the strategy document says about diversification.

Where to start this quarter

Pull three numbers before you write anything: retention split by first-year and repeat donors, cost to raise a dollar by line, and revenue share of your largest source and largest donor. Then hold one meeting with the executive director, the development lead, and the board chair to pick the growth line and the hold line. Write the board expectations in the same meeting. Everything else, including the plan, follows from those three numbers and that one meeting.

When not to do this

A strategy document is the wrong tool when the problem is cash this month. If you have under one month of operating cash, the work is a cash plan and a conversation with your largest funders, not a seven-decision exercise.

It is also the wrong tool when one person raises all the money with no support. Then the strategy is that person’s calendar, and the useful document is the fundraising plan alone. Skip the strategy layer and write the plan.

Hold off during a leadership transition. A fundraising strategy written by an outgoing executive director binds the incoming one to relationships they do not hold. Write it in the new leader’s first six months instead.

And do not write a fundraising strategy to satisfy a funder who asked for one. A document produced for a grant report will describe the organization the funder wants rather than the one you run, and staff will know the difference.

Questions people ask

What is a good donor retention rate for a nonprofit?

The Fundraising Effectiveness Project’s cross-organization average for 2025 was 43.3%. Treat that as the floor, not the goal. Repeat donors return at far higher rates than first-year donors, so measure the two groups separately and set a target for each.

How much should a nonprofit spend on fundraising?

There is no single correct ratio, and a board that sets one without looking at the mix will cut the wrong line. The Association of Fundraising Professionals lists acquisition mail at $1.00 to $1.25 per dollar raised and renewal mail near $0.20, with a capital campaign returning much more than an annual program and a special event returning less than major gifts. Set an acceptable cost per line and judge each line against its own number.

Should a nonprofit diversify its funding sources?

Less than most advice suggests. Bridgespan’s 2024 study of 297 nonprofits that reached $50M found over 90% relied on one dominant revenue category. Diversification protects against loss but costs focus, and the development team pays that cost first. Concentrate on one growth line, and manage the risk by watching your largest source’s share and your months of cash.

What percentage of nonprofit revenue comes from individuals?

Nationally, 64% of 2025 giving came from individuals, with foundations at 19%, bequests at 10%, and corporations at 7%, according to Giving USA 2026. Those figures exclude government funding and earned revenue, which dominate for many human services organizations. Your own three-year mix is the number that matters.

How do I write a fundraising strategy for a nonprofit?

Make the seven decisions on this page in order, starting with the revenue mix and the retention split, then hold one meeting to pick the line you will grow. Write the board’s expectations in that same meeting. Once those are settled, How to write a nonprofit fundraising plan turns them into targets and a calendar in about two weeks.

What is the difference between a fundraising strategy and a fundraising plan?

The strategy is the set of decisions: which revenue lines you grow, which you hold, what retention you target, and what the board owes. The plan is the calendar, the targets by line, and the assignments that carry those decisions out for one year. Write the strategy once every three years or at a leadership change, and the plan every year.