Analyzing Fundraising Goal Increase: By How Much?
Some time ago, an email raised the question: “When you are setting your fundraising goal for the coming year, is there a formula or commonly accepted “rule” on which to base an increase over the prior year’s goal?”
There is a basic ethical rule in fundraising — that you cannot and should not raise more money than that for which you have established a need.
The strategic planning process of an institution, its annual planning, and income forecasting all lead to the establishment of fundraising goals — goals that are established based on two major criteria.
The idea that an annual fundraising goal can be increased arbitrarily, not based on actual need, is counter to the whole concept of accountability to our constituents.
To raise money, we tell our prospects of our needs and ask them to help us meet that needs. If we raise our goal beyond our institution’s actual (established) need, but still tell prospects we “need” their support, we are (in essence) lying to them.
Only if an increase in an annual fundraising goal is based on a real need — not a “we can always use the money” rationale, does it have legitimacy.
In addition, the existence of a need for additional funding is only half of the justification for increasing the goal. The other half has to do with whether that goal will be attainable.
Big rule in fundraising: Never set a goal that you aren’t sure you can meet. And that assuredness must be based on your fundraising history, your knowledge of your current donors, your potential donors, the state of the economy, etc.
In essence, you don’t want to risk not meeting a fundraising goal, as failing to meet a goal suggests to potential donors that your community/constituency doesn’t really support you. Such a failure can (often does) significantly reduce contributed income in subsequent years.
The mistake made by too many “development” officers, including the one who asked the question, is that they focus on the process when they should be keeping their sights on the reason the process was created.
Bottom Line: Setting a fundraising goal is an involved process that requires serious thought and evaluation, not an arbitrary “rule of thumb.” See: Constructing The Gift Table and How To Use The Gift Table
Have a comment or a question about starting, evaluating, or expanding your fundraising program?
Contact Hank Lewis. With over 30 years of counseling in major gifts, capital campaigns, bequest programs, and the planning studies to precede these three, he’ll be pleased to answer your questions.