Before setting fundraising targets, a charity needs to understand three things: what it needs to fund, what resources are genuinely available, and what it will do if expected income does not materialise.
A resource development plan answers these questions over a defined period. It links funding needs to income sources, expected receipt dates, responsibilities and risks. It is different from a budget, which estimates income and expenditure, and from a cash-flow forecast, which shows when money is expected to come in and go out. A dashboard helps management monitor the plan and interpret changes.
This guide explains how to prepare an annual plan that can be completed and reviewed, and provides a practical template that charities can adapt to their size and work.
Step 1: Set the planning period
Choose a clear period for the plan, such as the financial year or the next 12 months. Divide it into months or quarters, depending on the timing of funding and commitments. A charity waiting for grant instalments at different points in the year may need monthly monitoring, while another may review some income sources quarterly.
Keep an annual plan and review income and payment forecasts regularly. NCVO suggests that small and medium-sized charities in the UK update cash-flow forecasts monthly and look ahead on a rolling 12-month basis, tracking restricted funding separately. This can be used as a practical reference, while taking account of local circumstances and requirements. www.ncvo.org.uk
Step 2: Identify the needs the plan will cover
Start with the activities and commitments the charity needs to fund during the planning period. Record the full cost of each need, when the money will be required and whether the expenditure can be deferred.
Group the needs in a way that helps management prioritise them:
- Programmes and projects: the costs of delivering activities and achieving intended results.
- Institutional and operating needs: such as systems, human resources, compliance and essential roles.
- Cash-flow needs: expected gaps between payment dates and receipt dates.
- Operating reserves: determined and managed under the charity’s reserves policy, separately from funding for routine expenditure.
Do not treat reserves as a recurring expense like salaries or rent. Record them as a planning item linked to the charity’s reserves policy and risks.
Needs and funding gaps
| Need or programme | Full cost | When funds are needed | Priority | Funding available for this purpose | Funding gap |
|---|---|---|---|---|---|
| Education programme | SAR 600,000 | Quarters 1–4 | High | SAR 400,000 | SAR 200,000 |
| Core operations and systems | SAR 300,000 | Throughout the year | High | SAR 100,000 | SAR 200,000 |
| Staff training | SAR 100,000 | Quarter 2 | Medium | SAR 0 | SAR 100,000 |
| Total | SAR 1,000,000 | SAR 500,000 | SAR 500,000 |
These figures are hypothetical. “Funding available” should include only resources that may be used for that purpose, after accounting for restrictions and commitments.
Funding gap for each need = full cost − confirmed funding available for that need
Step 3: Separate received funds, commitments and forecasts
Before identifying new sources, classify the resources already included in the charity’s plan. Do not combine them in one figure: their certainty and timing differ.
| Funding status | Examples | How to include it in the plan |
|---|---|---|
| Received | Donations or instalments paid into the charity’s account | Record the amount available and any restrictions |
| Confirmed but unpaid | A signed agreement or an instalment due under clear terms | Record the amount, expected receipt date and conditions |
| Forecast based on evidence | Regular donations or recurring income supported by past collection data | Show as a separate forecast, with its basis |
| Unconfirmed opportunity | A grant application or renewal still under consideration | Include in the pipeline, not as available funding |
If a funder has given initial approval but further conditions or approvals remain, record the funding according to its actual status. A confirmed agreement does not mean cash is available before the payment arrives; review receipt dates against upcoming commitments.
Step 4: Select funding sources that fit the need
After identifying the gaps, assess which sources could meet each need. A charity does not need to use every source, and not every source suits every purpose.
Possible sources include institutional grants, major individual donors, individual and regular donations, crowdfunding, earned income or waqf, where appropriate and permitted. Assess each source against:
- Its suitability for the funding purpose.
- The amount that may be available and the level of certainty.
- Flexibility of use and any restrictions.
- Expected receipt date.
- The cost of securing and managing it.
- The team’s capacity to deliver.
- Its effect on funding concentration and reliance on particular sources.
Also distinguish between a funding source and a collection channel. An individual donation is a source; a campaign or platform may be a channel for reaching the donor and collecting the gift. Keeping these separate helps prevent double counting.
Source selection matrix
| Need | Proposed source | Reason for choosing it | Restrictions or risks | Decision |
|---|---|---|---|---|
| A specific education programme | Institutional grant | The programme fits the grant’s scope | Instalments depend on reports | Apply after reviewing the conditions |
| Development of a shared system | Capacity-building grant or flexible support | The system will serve several programmes | Ongoing costs after set-up | Prepare an implementation and operating-cost plan |
| Equipment for a publicly described centre | Crowdfunding | The need, cost and intended result can be explained | Depends on audience reach and campaign costs | Test the message and audience before setting the target |
Step 5: Build an opportunity pipeline for each source
For every funding opportunity, record the target amount, its status, costs, timing and the person responsible. Include the next action rather than listing only the funder or campaign name.
| Source or opportunity | Target amount | Status | Estimated likelihood | Weighted planning value | Estimated cost | Decision or receipt date | Owner | Next action |
|---|---|---|---|---|---|---|---|---|
| Education grant | SAR 250,000 | Application under review | 40% | SAR 100,000 | SAR 8,000 | End of Quarter 2 | Grants lead | Complete supporting documents |
| Centre equipment campaign | SAR 120,000 net | In preparation | 60% | SAR 72,000 | SAR 15,000 | Quarter 3 | Campaign lead | Test the message and audience |
| Major individual donor | SAR 80,000 | Initial contact | 50% | SAR 40,000 | SAR 3,000 | Quarter 2 | Executive director | Present a short funding brief |
Weighted planning value = target amount × estimated likelihood of receipt
This value is an internal planning tool for comparing opportunities. It is not income received or guaranteed. The estimated likelihood should be based on the charity’s data and experience, and shown separately from confirmed amounts. The charity should not commit expenditure based only on a weighted estimate.
Step 6: Test the plan against three scenarios
Scenarios help management understand the effect of delayed or unrealised funding and prepare decisions in advance.
- Conservative scenario: some opportunities do not materialise or are delayed. Which commitments can still be met? Which costs can be deferred?
- Base scenario: confirmed resources and forecasts supported by reasonable evidence are achieved. What gap remains?
- Growth scenario: additional opportunities are secured. How will the charity use the new resources once received and their conditions are verified?
Hypothetical example
Suppose the charity’s annual needs total SAR 1,000,000, and it has SAR 500,000 received or confirmed under funding agreements. It also has opportunities in progress with a total target of SAR 450,000, but the estimated weighted value of those opportunities is SAR 212,000.
| Scenario | Confirmed funding | Supported forecasts | Weighted value of opportunities | Approximate planning total | Gap against needs |
|---|---|---|---|---|---|
| Conservative | SAR 500,000 | SAR 100,000 | SAR 80,000 | SAR 680,000 | SAR 320,000 |
| Base | SAR 500,000 | SAR 100,000 | SAR 212,000 | SAR 812,000 | SAR 188,000 |
| Growth | SAR 500,000 | SAR 100,000 | SAR 450,000 | SAR 1,050,000 | No gap; planning surplus of SAR 50,000 |
These figures are illustrative. Weighted opportunities and targets are not available funding. If a gap remains in the base scenario, the plan should identify who will manage it and what decisions will be reviewed if it is not closed by the agreed date.
Step 7: Prepare a response to funding gaps
For each risk, define an action, an owner and a review date. Responses may include updating the cash-flow forecast, negotiating a payment schedule, seeking another suitable source, or changing the scope of an activity with the relevant parties’ agreement.
A concise risk and decision log could look like this:
| Risk or change | When should action be taken? | Action | Owner | Review date |
|---|---|---|---|---|
| Grant instalment is delayed | If the delay affects essential payment dates | Update the cash-flow forecast and contact the funder | Finance lead and executive director | Within one week |
| Campaign is below expected progress | If receipts fall below the approved interim forecast | Review reach, messaging and costs | Campaign team | Mid-campaign |
| Grant application is unsuccessful | When the decision is received or its due date passes | Activate an alternative or review the activity’s scope | Resource development and programme leads | Immediately |
The charity should not use restricted funds for another purpose without a valid basis for doing so. Reserves should not become an automatic solution to recurring deficits; they should be used under the approved policy and delegated authority, while the causes of the gap are addressed.
Step 8: Assign responsibilities
Specify who makes decisions, who updates the data and who follows up each opportunity. One person may hold several responsibilities in a small charity, but the roles should remain clear.
- Board: approves direction, priorities, policies and acceptable risk within its authority.
- Executive management: connects the plan to the charity’s priorities and responds to changes and gaps.
- Resource development team: follows up opportunities, proposals, campaigns and funder communications.
- Finance team: verifies receipts, restrictions, costs and payment dates.
- Programme leads: estimate needs and confirm the charity’s capacity to deliver commitments.
For each action, record the owner, deadline, expected result and evidence of completion. A target such as “increase grants” needs to be translated into specific opportunities, an owner for each application, a submission date and an estimate of the required effort and results.
Practical resource development plan template
The following table can be copied and completed annually. It should sit alongside a separate budget and cash-flow forecast, as a funding plan does not replace either of them.
| Plan area | Information to record |
|---|---|
| Planning period | Start and end dates, and review dates |
| Total needs | Full cost of each programme and institutional need |
| Funding received | Amount received, its purpose and any restrictions |
| Confirmed funding not yet received | Amount, funder, payment date and conditions |
| Recurring income forecasts | Estimation method and supporting historical data |
| Funding gaps | Gap for each need and date the funds are required |
| Selected funding sources | Why each source fits, target amount and cost |
| Opportunities in progress | Status, estimated likelihood, timing, owner and next action |
| Scenarios | Conservative, base and growth scenarios, and their effect on delivery |
| Risks and responses | Risk, trigger for action, response and owner |
| Governance and review | Approver, update frequency and location of recorded decisions |
Source tracking register
| Need | Source/channel | Target | Received | Confirmed but unpaid | Unconfirmed | Cost of securing and managing | Receipt date | Owner | Next action |
|---|---|---|---|---|---|---|---|---|---|
Record the funding source and collection channel in separate columns where needed. Figures in this register should agree with the budget and financial records; unconfirmed forecasts should not be added to actual receipts.
Review and improve the plan
Review the plan at agreed intervals and compare actual results with forecasts. Check the amount received, timing, progress of opportunities, cost of securing resources, remaining gaps and the effect of changes on programmes and cash flow.
Do not change figures simply to make performance appear better. Record the reason for each change, the resulting decision and the person responsible for it. Management accounts can support this process by helping leaders compare actual income and expenditure with the budget and monitor performance. www.ncvo.org.uk
Conclusion
A resource development plan becomes practical when it links each need to its cost, each gap to a proposed source, each opportunity to its status, likelihood and owner, and each risk to an action and review date.
Start by identifying needs, then separate received funds, commitments and forecasts. Select sources that fit the needs and test the plan against different scenarios. Review receipts and cash flow regularly. This helps the charity connect its funding ambitions to its actual capacity to deliver, and make clear decisions when circumstances change.
