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Linda Lysakowski, ACFRE

About Linda

What is a Development Audit and when does your organization need an audit?

A Development Audit is an internal assessment of your fundraising program and your readiness to embark on new development ventures. The Development Audit looks at involvement of board, staff and volunteers in the fundraising process and offers recommendations on how to best use the human resources available to the organization. It further evaluates the strengths and weaknesses of your development systems, including fundraising software. The audit also offers suggestions to help improve donor communications and stewardship.

Many organizations consider a Development Audit when they are:

  • Preparing to embark on a major gifts, capital or endowment campaign;
  • Not satisfied with the results of their annual giving program;
  • Seeking to increase Board participation in fundraising efforts;
  • Attempting to compare their results with similar organizations;
  • Looking for an objective evaluation of their development program;
  • Trying to diversify their funding streams;
  • Engaged in the strategic planning process;
  • Looking at restructuring their development office;
  • Seeking to take their program to a higher level of professionalism.

In most cases, the audit is done by a consultant in order to gain both objectivity and utilize the knowledge and years of experience the consultant will bring to the table. The staff, while not involved directly in the evaluation process, will need to devote time to the audit process. Typical staff roles include:

  • Completion of Development Audit questionnaires;
  • Providing supporting documentation;
  • Meeting with the consultant to clarify information and set goals for the audit.

The board is also involved with the process, usually completing questionnaires and participating in interviews with the consultant. Typically the board chair, chair of the development committee and other selected board members will be involved in interviews. The consultant generally makes several visits to the organization to meet with key staff, board and other volunteers.

These are the typical areas addressed in the audit:

1. The Organization’s Readiness for Fundraising

  • Legal Structure—does the organization have 501 ( c ) 3 status?
  • Organizational Structure—to whom does the development office report?
  • Strategic Planning—does the organization have a long range plan?
  • Fundraising Guidelines—are there gift acceptance policies in place?
  • Case for Support—is there a written organizational case for support and case statements to support various fundraising needs?

2. The Board’s Role in Fundraising

  • Board Composition—is the board diverse, and does it have the appropriate mix of skills and talents?
  • Board Performance—is the board actively involved in fundraising and do board members support the organization financially?
  • The Development Committee—is there a development committee or other volunteers involved in the fundraising program?

3. The Role of Staff

  • Departmental Structure—is there adequate staff, doing the right jobs with the right tools?
  • Functions of the Development Office—does the development staff have the time and skills to perform all development functions?
  • Training & Educating Staff—is there a commitment to professionalism in the development office?
  • Educating Role of the CEO in Fundraising—is the CEO involved in fundraising and does he/she communicate regularly with the development office?

4. Systems & Procedures

  • Donor Database Software—is there an adequate donor software program in place and is staff trained to use the program?
  • Procedure Manual—are procedures in place to receive, record and acknowledge gifts?
  • Hardware—is there adequate hardware to support development systems and programs?
  • Internet Usage and Website—does staff use technology to improve donor relations?

5. Cultivation & Stewardship

  • Legal Structure—does the organization have 501 ( c ) 3 status?
  • Organizational Structure—to whom does the chief development officer report?
  • Strategic Planning—does the organization have a long range plan?
  • Fundraising Guidelines—are there gift acceptance policies in place?
  • Case for Support—is there a written organizational case for support and case statements to support various fundraising needs?

6. The Integrated Development Program—does the organization rely too heavily on one source of funding or is there a plan in place to develop funding from various sources including:

  • Grants
  • Special Events
  • Direct Mail
  • Internet fundraising
  • Telephone Fundraising
  • Major Gifts
  • Corporate Appeals
  • Planned Gifts

Once the Development Audit is complete, the report should be used to develop a strategic plan for development, addressing the areas raised as issues needing improvement in the Audit. A comprehensive Development Audit can help an organization build on its strengths, overcome its weaknesses and address opportunities for future growth.

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