What Is a Nonprofit Development Audit?

A development audit is an internal assessment of your fundraising program and your readiness to take on new development ventures. It looks at how your board, staff and volunteers are involved in fundraising, and recommends how to make the best use of the people you have. It also evaluates the strengths and weaknesses of your development systems, including your fundraising software, and suggests ways to improve donor communications and stewardship.

When does your organization need a development audit?

Many organizations consider a development audit when they are:

• Preparing for a major gifts, capital or endowment campaign
• Not satisfied with the results of their annual giving program
• Trying to increase board participation in fundraising
• Wanting to compare their results with similar organizations
• Looking for an objective evaluation of their development program
• Trying to diversify their funding streams
• In the middle of strategic planning
• Considering a restructure of the development office
• Ready to take their program to a higher level of professionalism

Who does the audit, and who takes part?

In most cases a consultant does the audit. That brings objectivity, plus the knowledge and years of experience the consultant brings to the table.

Staff aren't directly involved in the evaluation, but they do need to set aside time for the process. Typical staff roles:

• Completing development audit questionnaires
• Providing supporting documentation
• Meeting with the consultant to clarify information and set goals for the audit The board takes part too, usually by completing questionnaires and sitting for interviews. The board chair, the chair of the development committee and other selected board members are typically interviewed. The consultant generally makes several visits to meet with key staff, board members and other volunteers.

What a development audit covers

1. Your organization's readiness for fundraising

• Legal structure: does the organization have 501(c)(3) status?
• Organizational structure: who does the development office report to?
• Strategic planning: does the organization have a long-range plan?
• Fundraising guidelines: are gift acceptance policies in place?
• Case for support: is there a written organizational case for support, plus case statements for specific fundraising needs?

2. The board's role in fundraising

• Board composition: is the board diverse, with the right 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 fundraising?

3. The role of staff

• Departmental structure: is there enough staff, doing the right jobs, with the right tools?
• Functions of the development office: does the development staff have the time and skills to cover every development function?
• Training and education: is there a commitment to professionalism in the development office?
• The CEO's role: is the CEO involved in fundraising, and do they communicate regularly with the development office?

4. Systems and procedures

• Donor database software: is there an adequate donor software program, and is staff trained to use it?
• Procedure manual: are procedures in place to receive, record and acknowledge gifts?
• Hardware: is there adequate hardware to support development systems and programs?
• Internet and website: does staff use technology to improve donor relations?

5. Cultivation and stewardship

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6. The integrated development program

Does the organization rely too heavily on one source of funding, or is there a plan to develop funding from several sources? The audit looks at:

• Grants
• Special events
• Direct mail
• Internet fundraising
• Telephone fundraising
• Major gifts
• Corporate appeals
• Planned gifts

What happens after the audit

Once the audit is complete, use the report to build a strategic plan for development that addresses every area flagged for improvement. A comprehensive development audit helps an organization build on its strengths, work through its weaknesses and act on opportunities for future growth.

Quick answers

What is a development audit? An internal assessment of a nonprofit's fundraising program and its readiness for new development ventures. It covers board, staff and volunteer involvement, development systems, donor communications and stewardship.

Who usually conducts a development audit? Usually an outside consultant, for objectivity and experience. Staff supply questionnaires and documentation, and board leaders are interviewed.

What should you do with the audit results? Turn the report into a strategic plan for development that tackles each area the audit flagged.

About the author

Linda Lysakowski, ACFRE, is a nonprofit fundraising consultant, trainer and author. If your organization needs a development audit, reach her at Linda@LindaLysakowski.com. Her books and online courses are at LearnWithLinda.online.

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Work with Linda Lysakowski, ACFRE Board development, development audits, and fundraising training for nonprofits. See Linda's courses and books → · Linda@LindaLysakowski.com