Building a Goal Chart

This column continues the series on fundraising fundamentals. Over the next few months, we will review various tools to help you achieve your goals.

In last week’s column, we discussed building a campaign gift chart and how assessing the number of prospects at various gift levels can illustrate how to achieve a campaign goal. This week, we will look at a different type of chart, a goal chart, which uses actual donor data to forecast fundraising success.

Let’s start with an understanding of donor data, which we outlined in this previous column. The two key measures we will dive into this week are:

  • Donor retention, which measures how many of the donors who gave in one fiscal year, for example in FY22, gave again in the next fiscal year (FY23). Those donors become your focus for renewing again this year (FY24). Be careful to not simply divide the number of donors in one year by the number of donors the next year. Retention rate is not a measure of how many donors but truly a measure of specific donors and their loyalty (retention) or lapse (attrition).
  • Average gift, which measures donor generosity, on average, and means total raised in one fiscal year divided by the number of donors who gave that year. Analyzing average gift by donor category or type is helpful. For instance, the average gift of corporate donors may be substantially higher than the average gift of individual donors. Calculating by donor category or type will ensure the average is a good measure. Also, if there is an outlier gift or two, we recommend calculating the average without the outlier(s) so that the average is not artificially high.

Using these data points to calculate fundraising goals is critical for successful budgeting and development planning. The following chart illustrates how this works:

In the example, the goal is $90,000 raised from individual donors.

  • First, how many donors gave in FY23? – in this case, 280.
  • Second, what is the donor retention rate? – 48%.
  • Third, multiply 280 x 48% and the number of renewed donors to give is – 134.4.
  • Fourth, what is the renewing donor average gift? –  $276.
  • Fifth, multiply 134.4 x $276 and the amount raised from renewed donors is –  $37,094.
  • Sixth, subtract $37,094 from the goal of $90,000 and the amount to be raised from new donors is –  $52,906.
  • Seventh, what is the new donor average gift? –  $125.
  • Eighth, divide $52,906 by $125 to determine how many new donors will be needed – 423 to reach the goal of $90,000.

Once these calculations are made based on current and actual data, then you can forecast what’s possible by varying one of the factors. The first three shaded columns vary donor retention but keep average gift constant, and the second three shaded columns vary average gift but keep retention constant.

Running these scenarios allows you to assess if the budgeted goal of $90,000 is feasible, and if so, what retention and gift rates your team needs to meet or exceed in order to be successful.

We have found this chart to be helpful for both development professionals and finance professions because, often, finance budgets fundraising goals by the “fill the gap” method. When the math is clearly articulated, it is much easier to plan for, and achieve, goals.

Understanding your donor data is helpful for transactional work like a budget forecast, but it’s also critical for relationship work. Building a fundraising strategy based on this data gives you a clear picture of where to invest your time and energy with donor engagement.

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