Fundraising, Development, and Revenue Generation
Core concepts
Revenue generation for a practice or nonprofit includes earned revenue (services, retail optical), grants, individual giving, corporate and foundation support, and events. Development is the systematic cultivation of donors; fundraising is the ask.
Know the donor cycle: identify → qualify → cultivate → solicit → steward. Understand the case for support, the gift pyramid (many small gifts, few large gifts), and moves management (planned, tracked donor contacts). Distinguish annual fund, major gifts, planned/legacy giving, and capital campaigns.
Grants require alignment of funder priorities with program design, a logic model, a budget narrative, and reporting. Know restricted vs unrestricted funds and the importance of cost recovery (indirect costs). Ethics: gift acceptance policies, donor intent, acknowledgment, and confidentiality. Know basic donor retention math - retention is cheaper than acquisition.
Traps
- Spending restricted funds on general operations - a serious compliance breach.
- Confusing a pledge (commitment) with a gift (received); recognize pledges per policy.
- Assuming a large one-time gift substitutes for a diversified revenue base.
- Soliciting before cultivating - the ask should follow relationship building.
Rule of thumb
Retention rate = (donors who gave again ÷ donors from the prior period) × 100. A 10-point retention gain often beats a 10% acquisition increase.
Worked example
Prior year 500 donors; 300 give again this year. Retention = 300 ÷ 500 = 60%. If average gift is $100, improving retention to 70% adds roughly $5,000 without new acquisition cost.