Tag Archives: major gifts

Are Your Annual Fundraising Goals Are Too High, Too Low, or Just Right?

Do you think your annual fundraising goals are:

  • Way too low,
  • Somewhat too low
  • Just about right
  • Somewhat too high
  • Way too high
  • N/A

This is one of the questions we ask when we conduct an Organization and Development Assessment Survey which we ask clients to complete when we begin engagements. Depending on the client, there are between 60-90 questions on the survey that help us understand an organization’s current situation, and its potential for improvement.

Off target fundraising goals

But I love this question.

This question shows an organization’s optimism, how well it tracks its gifts and whether it understands what their goals could or should be.

Based upon the answer to this one question, we can help improve outcomes, but that is another whole article.

The facts are clear. According to a recent article by Zach Shefska of MarketSmart, only 43% of organizations met their major gift fundraising goals in 2019. Unless there were unusual, unexpected circumstances, 57% of nonprofits need to improve their goal setting along with their fundraising capabilities.

To treat this subject with the detail it requires, this will be a two-part article with the “extremes” today, and the middle ground next week.

If your answer is that your fundraising goals are:

Way too low” – your organization probably

  1. had an unexpected windfall (that new $200,000 gift or a one-time stellar event with great honoree(s) you weren’t expecting) that skewed your results;
  2. experienced an expected reduction in staff during the year which led to extremely conservative goal setting; or
  3. pulled a number without a plan.

If it’s the new, and very large donation, I hope you have your stewardship in place. That will be essential to make that person(s) feel great and hopefully give again.

If you had a staff change, consider that you were likely to have a decrease in annual money because

  • you didn’t want to pay appropriately
  • weren’t willing to invest in executive search to fill the post (which seems like a poor trade-off), or
  • you didn’t think you could hire right away.

Remember that staff turnover costs money. Investing in your staff’s satisfaction is essential.

If you just pulled a number without a plan, I hope that you have since corrected your mistake and created a fundraising plan.

Way too high” – your organization probably:

  1. had a senior officer—without real development experience or knowledge of your donors—set a high goal without a plan on how to achieve it
  2. unexpectedly lost one or more major donors/cancelled an event
  3. had a change in fundraising staff or volunteers

Setting goals without a plan is more common than people like to admit. It is a practice that leads to trouble for the organization. If you are not working on a detailed plan to improve donor retention, move donors from mid-range gifts to major gifts, or create new strategies and stewardship for major donors, you should not be increasing your goal. A big goal may make the leadership feel good in the short term, but the reality will harm both staff and volunteer leaders’ morale and confidence in the long-term.

Unexpected losses are unfortunate. A one-time occurrence of this kind, if at the wrong time of the fiscal year, is virtually impossible to overcome. But, more than once, then it is the organization’s fault. Consider diversifying annual fundraising. It may be easier to have one $100,000 donor than 10 donors at $10,000 but losing one $10,000 gift will have less of an overall impact.

Over-reliance on events can be catastrophic when an honoree gets sick or a last-minute snowstorm postpones your organization’s largest source of income. It’s great when the event works, but when it doesn’t, your goal may end up “way too high.”

Did your volunteer fundraisers leave this year? It pays to have a constant source of new fundraisers each and every year. I know organizations that rely on the same 2 or 3 volunteers for 10+ years. They write the letters, make the follow up calls and ask their friends with only minimal staff involvement. That creates stale messaging, donors who remain the same or decrease their amounts (no real incentive to do anything else) and fundraising that drops dramatically with any change.

“N/A” – Your organization does not have fundraising goals – your organization probably should:

  1. Walk through the streets while people yell “Shame!” and throw fruit at you (a Game of Thrones reference)
  2. Know you need help for 2020

Goal setting creates accountability, expectations and demands a detailed plan. With a solid plan, our development operation will not be based on wishful thinking but rather a set of prepared processes that will ensure success.

That leaves fundraising goals that are “Somewhat too low,” “Just about right,” and “Somewhat too high” for Part 2. Check back on our blog www.merskyjaffe.com, and if this blog was forwarded to you, then subscribe on our homepage to read the rest.

And, if you would like to talk to us about a Organization and Development Assessment for your nonprofit call us at 800.361.8689.

Mid-level donors count too!

Fundraisers love major donors. How could we not? They provide the necessary funds to keep our nonprofits running. We also love new donors. Bright, shiny and falling in love with our organization. In many ways, these two types of donors re-affirm our devotion to our job (or volunteer) choice. But, what about those mid-level donors?

I am talking about the donors in that range that gets them noticed above the entry-level gifts of $25 or $50 but not quite close to your major gift level. You diligently thank them each year – maybe even 7 times, but they can be so much more valuable to you. Mid-level donors may be the future of your organization.

Understanding mid-level donors

  1. Consider why they give that amount. Are they…
    • Major donors who use this as an entry-level gift to test your stewardship?
    • Giving because a friend—maybe one of your board members—asked them?
    • Someone who has just increased to this amount.
    • Donating to a specific fund or appeal?
  2. Do you already know them? Are they…
    • Volunteers who are showing their support?
    • Event attendees who have started to give additional support?
    • Friends and/or family of board members?
  3. How long have they been giving? This can tell you a lot. Let’s say you consider $200 as a minimum, mid-level gift. If…
    • It is a first-time gift (that is not part of crowdfunding or event-related*), this often indicates there is a greater gift potential and that they are testing the water with your nonprofit. Your stewardship and acknowledgement practices will be the reason that person continues to give or does not renew and turns to test another organization.
    • this is their second gift, they definitely should be on your radar. Donor retention for the win! They may not be ready for a significant upgrade, but they appreciate you and you should definitely let them know that you appreciate them. They may be your future major donors, long-time supporters, volunteers, board members, etc….  
    • They have given for 5 or more years. Celebrate them as you would a major donor. 5 years at $200 is a $1,000 donor. And consider whether they are ready for an upgrade beyond the 50%+ that you suggest in your annual appeal letters. Depending on their age, they may be prime prospects for a planned gift. And or a monthly gift.
  4. Why should you care so much about these donors?
    • If you had 20 donors who give $200 for 10 years, that would be $4,000 per year or $40,000 over 10 years – assuming you retained each of those donors with no increase nor decrease. How much work have you put into a $40,000 grant that you didn’t receive? These are people who already want to give to you. Again and again.
    • Imagine if you moved 50 or 100 of your entry-level donors into this category in the next two years.

In other words, it’s time to focus on these amazing donors. And once you have identified them and their giving habits, don’t forget to create a plan to deepen their engagement. Work to retain their gifts or upgrade them. And stop treating them like the $25 donors that we like, but don’t know enough about yet. (You should know any donors that have been giving for more than a few years but that is a whole other blog post.) Make them feel special and acknowledge them wherever and whenever you can.

As always, if you want help customizing your plan or understanding what these donors lifetime potential may be, email me or schedule a time to talk by clicking here.

*Crowdfunding and event-related gifts should be treated separately. You have the opportunity to convert some of these donors to life-long supporters, but some will only give because they are asked by a certain person for a one-time gift. Acknowledge and attempt to steward but don’t spend too much time on this group.