How To Set A Fundraising Target

When ruminating over the responses to our annual survey, our newsletter subscribers shared once again (for the third year running) that unrealistic fundraising targets continue to be a source of de-motivation and frustration.

The challenges of the past few years have meant that the vital services which charities provide have never been more in demand. With higher demand, comes higher costs, and a growing fundraising target.

Ambition is to be admired.  I’d love every single fundraiser in the WORLD to take Trust the Process or Major Gifts Made Simple.  However, knowing what I know about making and selling digital products, that’s not going to happen and I’d be foolish to allow blind ambition to take over.

Wild ambition is not an appropriate substitute for evidence and professional knowledge.

And in the words of my esteemed colleague Rachal Minchinton:

“Your fundraising target is not the difference between income and expenditure.”

I am meticulous in setting targets.  Possibly because (in Gretchen Rubin’s Four Tendencies), I am an Upholder (I like to meet expectations set by both internal and external sources).  More likely it’s for the following reasons:

• to help my service delivery colleagues to accurately plan for the year ahead
• to manage the expectations of leaders and trustees
• to ensure I feel motivated by working towards something realistic

I also love to geek out on spreadsheets, numbers and predicting the future.  I find this work hugely satisfying and once complete, I can’t wait to get started on smashing my goals!

Here are some simple tips for how to set a (more accurate) fundraising target.

Please note, they are designed for charities who are not starting from scratch but who have at least one year of fundraising experience behind them.

1. Look at each donor from last year and asses whether or not they might give again

No sh*t Sherlock.  Lucky for all of us, this stuff isn’t rocket science.

Sounds simple doesn’t it but it’s worth stating as the obvious place to start.   For trusts and major gifts, generate a report from your database containing all of your gifts within a 12-month period.  Export into a spreadsheet with the following categories:

• Name
• Date of last gift
• Amount of last gift
• Project supported (if relevant)
• Notes / comments

Go through each gift and ask yourself:

• Have we spent the money on what we intended?
• Have we kept the donor up to date with progress?
• Do we know them and if so how well?
• Are we eligible to ask for another gift and / or will it be timely / appropriate to ask again?

Answering these questions for existing donors will help to make as accurate as possible an assessment on what might happen in the coming year.

Make sure you factor in the time it will take to look after these donors over the coming year (I cannot emphasise just how precious your existing donors are to your organisation).

It goes without saying that the more years a donor has been giving and the warmer your relationship with them, the more confident you can be that they’ll give again the following year.

2. Make a judgement on the amount you plan to ask for

Start to think about the amount you’d like to ask each donor to give.  For each donor, ask:

• Will we be asking for a similar amount or a different amount?

If it’s a different amount, make sure you know why and be able to clearly articulate the reason for asking for more or less (because your Finance Director / Fundraising Director / CEO might ask).

If this is backed up with actual intelligence from the donors themselves (i.e. a conversation where you’ve explicitly discussed this) then all the better and the closer your predicted target is likely to be to the reality.

For low level giving, look at each campaign or event and break down the following:

• Number of donors
• Average gift size
• Average sponsorship raised

Think about what you might expect to get if you ran the same event or campaign again in exactly the same way.

• Would the results be the same or different?
• What external factors might make a difference?
• What could you change or tweak to positively influences the results?
• How are you stewarding donors / participants to warm them up for next year’s campaign / event?
• Do you need a complete re-think? If so then why?

Don’t be afraid to set low and high targets for each donor / campaign event.  Make sure you can explain how you’ve come to each of these figures.

3. Exclude anomalies

If you’ve received some big gifts relating to a one-off project (maybe a capital build?) then be wary of including these donors in next year’s forecasts.

For any gifts you know are a one off, discount these too (e.g. a charitable trust has wound up and has given you one final grant).

Make sure you can explain why your target is likely to be lower this year.  Don’t let yourself be backed into a corner with the following ‘fundraising bulls**t bingo’ phrases:

• “I’m sure a big gift will just pop up””
• “We’ll probably get a big legacy in at the last minute.”
• “Let’s just apply to the Lottery / write to Richard Branson” (ffs)
• “I just need to you really give it everything you can this year” (this is the worst, gaslighting thing a manager can ever say)

4. Extenuating circumstances

One of our favourite books is Rework by Jason Freid and David Heinemeier Hansson.  One of the best quotes from this book is “Planning is guessing.”

As someone who absolutely loves to plan ahead and who feels safe and happy when she knows what’s around the corner, this quote was difficult for me at first (Tony was cool with it though…).

However, it now delivers a useful reminder not to get too caught up in predicting the future.

For everything I’ve said about the importance of putting dedicated time and effort into setting a fundraising target, it’s also important to remember that the unpredictable will happen.  We cannot ever be completely in control of things in life, or in fundraising, the latter being an area where we have very little control over the decision making.

• Bad weather means an event gets cancelled
• A lifelong legacy pledger suddenly gets divorced
• A major donor’s company goes into administration
• Your warm contact at a charitable trust leaves and you no longer know the person on the other end of the phone

To end, I’ll say that I believe there are two main things will protect you from this stuff to a degree:

• Having as many streams of income as possible
• Investing time and money into stewarding warm donor relationships

The quicker a non-profit can build on these two principles, the more protected their work will be for each year that passes.

For more tips on setting KPI’s and expectations for trusts and foundations, click here.