When I ask nonprofit leaders how much they aim to raise this year, I often get answers like, “Good question. How much do you think we can raise?” or “Whatever funds we need to match our expenses, that’s what we’ll raise.”
I recommend that rather than pulling a number out of the sky, you approach your goal-setting systematically and develop a target based on your organization’s fundraising reality. After all, your fundraising goal is the bedrock of your development plan, so you want it to be right!
Know what you raised last year
As a starting point, consider what’s been raised in the past. If you raised $200,000 last year it’s unlikely you’ll suddenly jump to $5 million this year (although it’s been known to happen via a surprise bequest).
Some organizations will take the prior year’s number, add 5%, 10% or 20%, and call it good. While this is better than having no fundraising goal at all, it barely scratches the surface. Let’s dig deeper.
Examine your donor data
Here’s where your donor database really pays off! Run a report that shows each donor’s total contributions from the previous year. Include foundation grants, corporate grants and sponsorships, and gifts from individual donors.
Now, review each gift from foundation funders. In many cases, you can predict grant funds. For example, if last year’s grant from ABC Foundation was part of a 3-year grant, you can count on their support again this year.
Next consider each of your corporate partners. If your board member who works for XYZ Company has reliably secured a $10,000 event sponsorship for 3 years running, you can you can be reasonably confident this gift will come through again this year. On the flip side, make sure you re-set your expectations if that board member has changed jobs.
Engage volunteers and other staff
None of this work should be done in isolation! Pull together a committee of folks to work on either the whole list or sections of the list. If you have a corporate fundraising committee, be sure to talk through the corporate donor list with them and get their input.
Now look at your individual donors. Solicit help from your board members and other volunteers who know your donors personally. If you think a donor will give again, will they give at a higher level? Historically, has your organization been successful at moving donors to larger gifts?
If you don’t know the capacity of your donors (i.e. how much they are able to donate), do some research.
This sort of donor analysis works best for major donors. If your donor list is huge, you may not be able to take the time to review all donors. If you have a number of small gifts, sum the small gifts from last year into one total and simply add 5 or 10% to determine a goal for this year. The amount that constitutes a “small gift” will vary by organization. For some it might be $25 and under, for others $250 and under, for others much higher.
As you’re forecasting gift amounts, keep in mind other factors that may impact your ability to raise funds in any given year, such as a change in volunteer leadership. One organization I know underestimated the impact of a single committee member on their annual fundraising event. When this committee member took a year off after 5 years on the committee, the organization’s event revenue plummeted $50,000.
Other examples include your staff and their ability to do the work, your CEO’s effectiveness as a fundraiser, how well you’ve been cultivating and stewarding your donors over the past year, and whether you have an effective acquisition program in place.
Externally, the state of the economy and competition with nonprofits doing similar work will come into play.
Once you’ve forecasted your foundation, corporate and individual gifts, add in a conservative amount for any new initiatives you may be trying this year, such as telemarketing, direct mail or a new event.
Then, total is all up and voilà, there’s your annual fundraising goal for the year, based on reality! Congrats!
What are your tips for setting an annual fundraising goal? Please share them in the Comments box below.
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