Fundraising Basics – How to Set Goals

February 20, 2018

Often we’ve worked with clients who’ve missed their fundraising goals by substantial amounts. I typically ask how these goals were established in the first place. Not surprisingly, it usually comes down to setting goals to balance the budget.

For example, many institutions in private higher education practice tuition discounting. This is where the published price for tuition and fees is at one level, but the actual cost is discounted for most students through financial aid or scholarships. Essentially, this is usually done with unfunded aid.

Some institutions have discount rates approaching 60%. Unfortunately that causes budget shortages, and there are only a few ways to fill those gaps: fundraising, endowment or both. We had one client filling the gap almost exclusively through fundraising.

They had an annual fund goal of $4.5 million to cover the gaps caused by the discount rate. For a small school of 2,000 students, that goal was unrealistic and unsustainable. It had gotten to the point where the President had to secure several $1 million pledges just to balance the budget. Eventually they ran out of million dollar donors, which put the institution in serious financial peril.

Fundraising goals need to be both realistic and achievable, and one good way to ensure that is through strategic planning. Actually for goal setting to be effective, it will need to come from a planning process and address three important priorities:

Goals must address true organizational needs – We typically assess organizational needs during the planning process by reviewing a series of reports and conducting interviews and surveys with stakeholders. That process reveals to us the critical issues that need to be addressed.

In fact, often a goal is a critical issue restated as a goal. However, we also help develop strategies and action plans to achieve those goals. Additionally, we tighten up the strategies and action plans by assigning deadlines and champions. That tends to move the action forward related to the goals.

2. Goals must specify realistic increases in giving levels and sources – For example, if we increase our annual giving by 6%, we also have to decide from where that money will come. How many more donations will we need at the $1,000 or more level? Additionally, from where will those increasing donations come (board, individuals, events, etc.)?

It’s also important to ask yourself if that level of increase is achievable. If it’s not achievable then we need to see what expenses or programs can be cut. One nonprofit arbitrarily gave the new development officer an 83% increase over a three-year period. This was way out of line during years that had national industry increases of about 4%. True, statistics vary, but 83% was totally out of line.

Goals must tie to specific sources and targeted amounts and involve the development officer – If your organization is considering budget increases, you’d better have more of a plan than just hoping money will come in. That’s why development planning without the development officer is crazy. Who knows best about where the money will come from? The development officer needs to be a full partner in that process.

If you’re doing realistic goal setting, then you should also have a pretty good idea up front of where that money will come from. I’ve had many cases where the CEO and CFO alone have set the fundraising goals, without any input from the development officer. Typically, those goals are based solely on need apart from any realistic assessment of capacity. As a result they’re often missed.

Next week we’ll discuss how to teach and develop volunteers to help achieve those goals.

“I really support The Covenant Group’s strategic planning process because their approach encourages staff-based support with board buy-in, and I felt that was important given what we were trying to achieve. The outcome is an effective plan that builds consensus and provides a clear sense of direction.”
- Jennifer Scott, Director of Development - The Cabbage Patch Settlement House

“The Covenant Group is highly competent, very experienced and knowledgeable. They provided a broad perspective by equipping us with useful data…and best practices in the field. All in all, they are excellent.”
- Dan Jones, CEO - 21st Century Parks

“The campaign has truly been a miracle. People were committed from the beginning, but…even raising $650,000 seemed like a stretch. To nearly double that amount is incredible! When the plan they developed allows you to hit a goal like that, it builds such a sense of community. The momentum built by the campaign is spilling outside the walls of our church and benefiting others in the process.”
-Father John Hollowell - Annunciation of the Blessed Virgin Mary Catholic Church

“For those of us who don’t do this everyday, The Covenant Group instilled confidence in us. They helped us get through the fear and apprehension by providing us with a process, training and motivation. They taught us and helped us plan in a way that was for the better. We have built lasting relationships with donors and we will continue to steward these relationships long into the future.”
- Sue Finke, Director of Institutional Advancement - Covington Catholic High School

“No one anticipated we could raise this amount. Even the Archdiocese is surprised. The funds raised represent about 15 times our annual giving. But it’s not just the financial results. People stand around talking more than they did before the campaign. There is also a renewed and energized spirit among the parishioners. It’s the most exciting thing to happen in our parish in the last 100 years.”
- Gary Libs, Campaign Co-Chair - St. Mary of the Knobs Catholic Church

“The Covenant Group’s process involved a lot of people in our congregation doing small tasks … that built ownership. They took our vision and put it into a concrete plan. They helped us understand the importance of making our vision clear and laid out the steps to make the vision a reality. Their process built consensus and showed people how they could help. Their methods are based on a solid theological foundation that includes key documents, prayer support, and requisite training … all of which were invaluable.”
- Daniel Montgomery, Pastor - Sojourn Community Church

“Everything The Covenant Group did to help us…in the initial stages was helpful…the development of the case statement; our materials; the training of our Board members; strategies; all these steps laid the foundation for eventual success. They brought such a high level of professionalism, a wealth of experience and a strong track record of integrity and success… just being associated with The Covenant Group helped us.”
- Nancy Doctor, Development Director - Wellspring

“The structure The Covenant Group provided was excellent. It allowed our members to use their God-given talents to benefit the church community They helped us develop a plan and identify key leadership candidates to chair the effort, as well as engaging between 80 to 100 people to carry out the work of the campaign. It was truly a whole congregation effort and The Covenant Group helped facilitate that. They helped us reach our full potential as a congregation.”
- Ron Poisel, Pastor - Christ Lutheran Church

Fundraising Basics – How to Set Goals

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