Every nonprofit or charitable organization that doesn’t have a guaranteed source of income (and almost none do) will do best at raising money if it works toward a particular fundraising goal – that is, an amount of money that it wants, needs, and believes it can raise, over and above expenses, within the next year or fundraising cycle.
But with so much uncertainty in the fundraising world, how do you arrive at this number? Ideally, setting the dollar amount of your fundraising goal should be a collaborative process, overseen by the group leader, with input from whoever handles your group’s money matters; most likely the board, finance committee, or any other relevant participants.
The resulting number will represent all of the income that your group brings in and all the expenses it foresees paying out along the way.
You might already have a minimum number in mind, such as “It will take $40,000 to avoid our library assistant being laid off.” But that figure doesn’t account for the expenses you’ll incur along your fundraising path. In fact, arriving at your total income figure is — and typically should be — a more complex process, in which your planners look at:
- how much money is needed to meet the needs and goals you have identified as well as continue your group’s work
- how much money was raised last year
- how much can reasonably be raised this year
- the absolute minimum your group can get by on to reach its goals, with appropriate penny-pinching, and
- a reasonable dollar amount that will cover the projected expenses.
Such predictions can be difficult to arrive at. And your urge may be to simply say something like, “Well, we know we need to raise $8,000 for our marching band’s new uniforms, so let’s just keep trying to raise money until we get there.”
The problem with such a blind approach is that you may never get there. For one thing, some fundraising methods are simply so time-consuming and inefficient that anyone running the numbers in advance could predict they would raise only a small sum.
For another, aiming high can become a powerful motivator — while aiming low can turn into a self-fulfilling prophecy.
Take the case of Aileen, who isn’t really sure what her church’s overall fundraising goals are, but likes to help by organizing a yearly catered Thai dinner. A local restaurant provides meals for $15 a plate, the organizers spend about $25 total on drinks and utensils, and people pay $20 each to attend (she’s afraid they won’t be willing to pay more). About 25 people usually buy tickets, bringing the net profits to about $100. It’s a fun event, and a surefire moneymaker given that they sell tickets in advance. But would you plan such an event if you were trying to raise several thousand dollars within a limited time?
These are the kinds of issues worth considering as part of your planning process.
NOTE: The above is an excerpt from The Volunteers' Guide to Fundraising: Raise Money for Your School, Team, Library or Community Group (Nolo). Please see that book for more information if you’re with a small, mostly volunteer-run group. And for help planning your fundraising strategy in a larger group with paid development staff, see Effective Fundraising for Nonprofits: Real-World Strategies That Work (Nolo).