How to Set a Fundraising Goal (Not Too High or Low)
This was another popularly asked question we felt most free resources did NOT accurately cover, so we're here to help! When deciding "what should my dollar goal be for my fundraising campaign?" there aren't many great resources, as far as we could tell, to actually set a specific number. This is a question every nonprofit staff and board has at one time or another, and in this helpful guide, we will walk you through how to determine a goal that is challenging enough to grab the attention of your community, but not so large that it is unachievable.
First and foremost, our desire as fundraisers is to have the "perfect goal" before starting, to the dime what we think we can raise before we do any research or ask for any donations. That unfortunately is a little unrealistic, but we can get pretty close, allow the goal to be fluid, and dial in the exact number after we've received some donations, but before we announce the goal publicly. So from the organizations perspective, we don't know the goal until we're well on our way raising money, but publicly, we hope to announce a dollar amount that ends up being close to what we end up raising.
Here's how that works in practicality...
Determine how much you need for the "thing" - This could be a program, operational funding for a year, a building, new equipment, a scholarship, or anything else that can be funded partially OR fully by philanthropy. For example, if the new building your organization needs costs $2 million, start the goal there as a place to get the equation going. Also, keep in mind, the new thing might increase your operating cost in the short or long term, so try to account for hidden costs in the goal. Maybe the goal is now $3 million to cover any additional expenses for a year or even two years.
Review your fundraising history - This doesn't work as well if you're brand new and don't have a sense of your donor base size, but we know there's good data to support that all nonprofits raise substantially more inside a campaign that just in general fundraising. This gives your organization a time constraint to build urgency and a usually specific need to fund, which is almost always more inspiring to donors. Take your rolling annual fundraising average through the past few years not in campaign mode, multiply it by 6-10x, and use that to set a multi year campaign goal. Check that against your need you determined above ($2 million, $3 million, etc.), and if the numbers are close, you know you are on track to finalizing that goal. If you have no fundraising history, you can look at other organizations in the area or skip this step.
Determine how many top prospects you have - Review your list of prospects and how much you anticipate they could give, if they were so inspired, and use the 3:1 ratio, prospects to gifts, to estimate how many gifts you'll actually receive. On average, asking 3 donor prospects for cash gifts results in one "yes", one "no", and one "maybe/not right now/not that much". This isn't an exact science, but it tends to be really close to reality, and if you work in fundraising long enough, you know across a multi-year campaign, it is almost always true. Once you have your top prospect ratio determined, ask if these top 5-20 gifts account for around 80% of your current working goal. This is a great indicator if you're on track. If it's right on the money, you can further solidify that number.
Review other key factors that can influence success or failure - These include, but are not limited to:
Your reputation in the community - do people respect your staff/board/cause?
The average campaign goal of your community - does yours fall in the general range?
Does your leadership and board endorse the goal?
These are not as important as the first few steps, but can influence the goal up or down as a finishing metric. Once you have your number based on all that information, you are ready to launch your silent phase, where you collect your lead/major gifts, but don't announce the goal yet.
5. Achieve pledges that equal 30-50% of your goal, THEN announce a final number - Say you do land on $3 million as a goal, you'll want to be past the $1 million mark in pledges at least before "setting" or finalizing that goal publicly. If you raise that first third quickly, you can consider increasing the goal, but if you struggle, you can lower it slightly before launch.
And that's it! You've successfully set a fundraising goal that is both challenging and achievable based on actual data, and by following fundraising best practices, you have an extremely high probability of raising those transformational funds. If this process seems daunting, or this is your first campaign, consider conducting a feasibility study to have a team of outside experts do this process for you. You can read about what a feasibility study does if you'd like to learn more about how it helps in the pre-campaign process.
Starting a campaign soon? Schedule a free call with us to see if it might be a good fit for your nonprofit!
