Setting Fundraising Growth Goals

I regularly have conversations with nonprofit fundraisers and executive directors who ask me to help them determine what an acceptable level of growth is for their coming year.

Is 10% growth right? Should it be 15% Or maybe only 5%?

My guidance to each leader asking this question, and to you today, is that setting an arbitrary goal is a terrible idea. Just because you or your board or some outside advisor tells you that you should be growing at X% per year doesn't make it possible or likely.

Goal setting and annual planning have to be rooted in data and rigorous analysis.

You need to review the status of each of your revenue streams and donor audiences. What do you know about the donors in each of those areas? Does the data indicate that they are retaining at higher levels year-over-year? Lower levels? Are they giving larger or more frequent gifts, or have either of those metrics decreased in the last year? What percentage of your revenue is coming in recurring monthly gifts, which are more highly predictable? What percentage of your revenue is coming from gifts of assets (i.e., DAF, IRA, Stocks, etc.), which are more impervious to economic downturns? Have you had a meaningful conversation with each of your top 50 donors in the last quarter, and do you have an understanding of what their support will look like in the coming year? How has the economy impacted your supporter base, and what is their behavior telling you about the future of your fundraising efforts?

Once you understand your various revenue streams and supporter base, you need also to assess internal capacities. What are your funding priorities for the coming year, and how do those align with your donors and their philanthropic interests? Do you have good alignment, or is there a disconnect between your organizational priorities and your donors' objectives? What about your internal investment plans? Are you planning to spend the same amount of money to engage and build meaningful relationships with your donors? Are you increasing your investment in donor relations, stewardship, and even solicitation, or is your organization planning to decrease spending in any of these areas?

All of these questions should inform and shape your annual revenue and growth projections. If your donor base is growing, revenue is up, you are aligned with supporters in objectives and fundable projects, and you are investing more year-over-year in engaging your donors, there's a highly likelihood that you'll see growth in the coming year.

But if your donor base is shrinking, retention is down, your best donors are disengaged, and/or you are reducing investments in fundraising and donor relations, you should anticipate a decrease in revenue year-over-year.

This is why understanding your fundraising landscape and being intentional about assessing the data and giving trends is crucial to your planning and goal setting for the coming year. It's also why it's a terrible idea to engage in the guessing game of setting any type of arbitrary growth goals for your organization.