How to set your year-end fundraising goal
This post is part of my year-fundraising series. This fall, you can follow along here to receive training and tools that will help you launch a year-end fundraising campaign by October 1. The lessons I'm offering are best for small nonprofits (five or fewer employees). Ready for an amazing and successful Giving Season? Rock 'n' roll.
You don’t have a year-end fundraising campaign unless you have a goal.
The right goal is the “X” on the map that leads to buried treasure.
The wrong goal can end up burying you.
So how do you set the right goal for your small nonprofit’s year-end fundraising campaign?
First, let’s take a quick look at setting goals the good old “SMART” way:
Specific
Measurable
Achievable
Results-focused
Time-bound
Example of a SMART goal:
“Our small nonprofit will raise $10,000 in unrestricted gifts by December 31, 2017, through a mix of event, media, and personal fundraising.”
Do you see how this goal is specific, measurable, achievable, results-focused, and time-bound?
I see it all except for one thing: How does this small nonprofit know that $10,000 is achievable?
That is the crucial question.
Set your goal too high and your year-end fundraising campaign will fail.
Set your goal too low and you work very hard and end up leaving a lot on the table.
So how do you set the right goal for your small nonprofit’s year-end fundraising campaign?
When setting a fundraising goal, I look at two things:
Who is giving the money?
What need does the money meet?
Let’s break down each of those.
Who is giving the money?
This makes a big difference. Your year-end fundraising goal will be very different depending on whether you have 100 or 1,000 people on your donor list. Your year-end fundraising goal will be very different depending on whether most of your donors are recent college grads starting out or late career professionals. If most of your donors are in the habit of giving to you every November and December, your goal is likely to be higher than if this year-end fundraising campaign is your first.
You need to know something about the people who will be the focus of your year-end fundraising campaign.
In the last lesson, I shared my belief that every small nonprofit has a core group of passionate, personal, purposeful supporters. I call these partners. While partners make up less than 20 percent of your total supporters, you can trace up to 80 percent of your total support to their giving and influence.
As partners go, so goes your fundraising campaign. In the last lesson, I gave you a method and tools to ask your partners about their plans for year-end giving. Partners are the kind of donors who will tell you in advance whether they plan to give and how much. If you meet with your partners in September and October, you will have a handle on what they plan to give in November and December.
If you find that your partners plan to give $6,000 to your year-end fundraising campaign, you can use that number to figure out what your total year-end fundraising goal should be.
How?
Do this:
Look back at past fundraising campaigns, big and small.
Among those who gave to those campaigns, look for the names of your partners.
Add up the gifts you received from partners in each campaign.
In each campaign, look for gifts you know you received because of a partner’s influence. Example: One of your partners asked one of her friends to give to your campaign. Note these gifts and add them up.
For each campaign, add up the total amount of money you raised from partners and from people who gave because of your partners.
For each campaign, compare what your partners gave and influenced to the total amount the campaign raised. Divide what partners gave and influenced by the total amount the campaign raised. Example: On a campaign where you raised $10,000, partners gave and influenced $7,500 of the total amount. $7,500/$10,000=75 percent.
Look at all of these campaigns for a pattern. Example: You look at six different campaigns and notice that partners gave or influenced between 60 and 80 percent of the total amount for each one. Across those six campaigns, you figure that partners gave or influenced an average of 70 percent in each campaign.
Now you know that partners give or influence about 70 percent of your total fundraising each time you do a campaign.
If your partners tell you they plan to give $10,000 to your year-end campaign in 2017 and you know that partners are responsible for about 70 percent of what you raise in each campaign, you can figure your campaign goal should be $14,285.
This is not a perfect method, but this method works best for me when planning a fundraising goal. You never really know how acquaintances and strangers will respond to your fundraising appeal; but partners are willing to tell you before you even make the ask. If you know how your partners will respond to your fundraising campaign, you can better predict how everyone else will respond. Especially if you follow the steps I just gave you.
If your small nonprofit has decent records on past fundraising campaigns, I urge you to ask a few more questions to help you really bring your year-end fundraising goal into focus:
How much money did people give to your small nonprofit in October, November, and December in 2016, 2015, 2014 (and as far back as you can find data)?
What percent of your annual fundraising revenue did you raise from your year-end fundraising campaign in past years?
What percent of your year-end gifts over the past few years came from first-time donors?
What percent of your year-end gifts over the past few years came from repeat donors?
What was the average size of first-time gifts donors gave to your year-end fundraising campaign?
Did repeat donors decrease, increase, or keep their year-end giving amounts the same?
Finding the answers to these questions gives you a clearer picture of how donors and fundraising campaigns work at your small nonprofit. Use this picture to help you bring what is achievable into focus.
If you’re not used to looking at data like these, this may seem boring to you. Good fundraisers know that doing this kind of work makes the difference between failure and success. Invest the energy and time to take a closer look at whatever data you can find.
What needs does the money meet?
A lot of small nonprofits start goal-setting by asking how much money they need. I start by asking how much donors are likely to give, then I look at my operations and programs to find a place for it.
Why do I do it this way?
For starters: It’s easier. Think back to the last time you made a budget with your board or your team. Asking anyone who works at a small nonprofit how much money they need will always get the same answer: “More!”
If asking yourself how much you need is the first step of your goal-setting process, you are more likely to set an impossibly high goal that will demoralize and turn away supporters. You are more likely to fail to meet your goal, which could put you in even worse financial shape than before.
That’s why I prefer going to the data and the donors first. If I know that raising $15,000 in November and December is achievable (because I asked my partners and I looked at history), it changes the conversation about how we’re going to use the money.
Now, instead of asking the board and staff to tell me how much money we need to raise in November and December (“More!”), I’m asking this: “I project we’re going to raise $15,000 in November and December. What would be the best use for that money?”
The truth is, you should already have a board-approved budget that answers that question. If you don’t have a board-approved budget that already projects year-end gifts and how you will use them, now is the time to do that work.
Why?
Two reasons:
Knowing how you will spend year-end gifts (operations, programs, etc.) answers the donors’ big question: “Why?” Donors give more when they know their gifts will make an impact. If you plan to use year-end gifts to fund the day-to-day operations of your small nonprofit, that is fine. Be ready to explain why those day-to-day operations are so important to the mission you serve. I’ll write more about this in the next lesson.
Having a conversation about the best place to spend year-end gifts gives you an opportunity to grow and stretch your donors.
What do I mean by “grow and stretch your donors”?
Let’s say you figure out that your supporters are likely to give you about $15,000 in November and December. You have a conversation with your board and/or staff about how to use that $15,000. Now that your colleagues know how much money your year-end fundraising campaign is likely to bring in, their brains will click to budget line items that are close to that figure. Perhaps a board member or program director says: “You know, if we could stretch that figure to $18,000 it would allow us to _________________.”
Now you can have a conversation about whether setting your year-end fundraising goal at $18,000 is achievable. You know your donors are likely to give $15,000 in November and December. You also know that if you raise 20 percent more ($18,000), it would make a big difference to a need that your team identified. How might you meet a year-end fundraising goal that is 20 percent higher than what your data and donors say they will do for you?
Here’s what I would do: I would go back to my partners (drop them an email or make a quick call) and ask them if they would be willing to give 20 percent more if I told them it would help our small nonprofit accomplish __________________.
If most of my partners say they would be happy to increase their year-end gift by 20 percent, I can feel good about increasing the year-end fundraising goal from $15,000 to $18,000.
So, set an achievable year-end fundraising goal by going to data and donors first. Then, compare what data and donors tell you to what needs exist in your budget. If you find a strong case to increase your year-end fundraising goal, simply ask your partners if they will increase their gifts to make that difference. If most of them say they will, you can set a stretch goal for your year-end fundraising campaign.
Putting it all together
Set a year-end fundraising goal that is SMART:
Specific
Measurable
Achievable
Results-focused
Time-bound
Figuring out what is achievable is a matter of looking at who is giving the money and what need the money will meet. Base your goal on what your partners tell you they will do and on as much historical data as you can gather about your past fundraising campaigns. Once you have a goal your data and donors support, compare it to your budget and your needs. If you find an opportunity to “stretch” the goal (increase it from what data and donors tell you is achievable), check back with your partners to find out if they would be happy to increase their year-end gifts to help you accomplish the “stretch goal.”
Now that you have an achievable goal and a list of supporters with partners at the core, you are ready to make a media, message, and “merriness” plan. I’m going to show you how to do that in the next lesson/post.
