Don't Take the Easy Way Out When Setting Development Targets
I would be a wealthy woman if I had a dollar for every time I heard a version of, “We added a percentage increase over last year’s dollars raised to set our fundraising goal for this year.” To this I say, why?
An accurate, fact based development forecast is not only important for your organization to have a realistic expectation of revenue, but also the analysis to formulate the target number provides essential insights into your donor caseload. Once you intentionally calculate your development goal based on concrete data, you have your caseload selected and prioritized.
Funding can come from six revenue types: individuals, events, corporate, foundations, government and other (point of sales campaign, online auctions etc.).
For purposes of this post, I want to focus on the individual donors’ target, but the approach is similar for corporations and foundations as well.
Individual Development Target = Reliable Renewals + Upgrades + Recovered Dollars (LYBUNTS and SYBUNTS) + New Dollars
In order to calculate your expected revenue, you need to go name by name. There are no short cuts.
To account for the fact that there is some guess-work, I suggest assigning probability of successfully receiving the ask to each donor and multiplying it by the ask amount for an adjusted or weighted total. Using a weighted total will take into account how far along the prospective or renewing donor is in your moves management continuum. For example, a new prospect with good alignment but no outreach may have 10% probability and a new prospect that is very close with the campaign chair, has come to one event and has already had a pre-conversation about giving this year may be assigned 80% or higher.
Within each category of donors, you can break down your analysis further to received, committed or pending/prospect dollars. Once you have your target amount from your data, you should think about trends and any expected changes for the coming year both internally, communally, sector-wide and nationally that may affect your figures.
Forecasting is a labor intensive exercise but well worth the time to ground your fundraising planning and force you to think about the best approaches to maximize your development efforts.