How to Move Away From Funding the Gap

Have you ever been asked to raise an unrealistic amount of money for your nonprofit? You’re not alone…

At many nonprofits the budgeting process goes something like this:

1. Outline the staff, overhead and programmatic expenses
2. Estimate the revenue you’ll bring in through programs and services
3. Realize that the revenue will not cover the expenses
4. Tell your fundraising team to raise the money needed to fill the gap

There’s one problem here (ok there are many problems but I’ll highlight one…) just because we want to do something doesn’t always mean that we can. 

Now don’t get me wrong, I’m all for breaking ceilings and doing what we thought couldn’t be done. And I’m also pragmatic. 

Say as an organization you’ve raised roughly $500,000 a year for the last 3 years. If you are all of a sudden asked to raise $1M this year, while you might want to do that, you may or may not have a donor pipeline to support that goal.  

There’s a better way to set a fundraising goal. It starts with understanding your donor base and your past fundraising success. From there you can create a plan of the activities, events and appeals you’ll do for the year and how much you think you can raise from each. 

When we set goals around our metrics we set our team and organization up for success. The budgeting process works best as a combined effort between the finance, fundraising and program departments. 

It can take time to change how your organization does its budgeting. If you’re being presented with a goal that you think is unrealistic, start by asking questions such as: How did you come to this number? How do you envision we raise this when our numbers last year were much lower? 

At the same time, begin laying the groundwork so that you can help set the goal for next year. This starts with educating yourself and your leadership. Consider these 5 tactics:

1. Understand what’s realistic. It will be impossible to have a productive conversation without understanding the nuts and bolts yourself. Review your fundraising metrics and trends so that you can understand what’s realistic for your specific organization. Create revenue projections based on your previous years’ of funding.  
2. Empower yourself with data. It’s hard to argue with data. Presenting well-organized data will show you’re prepared and knowledgeable about your fundraising team’s financial position and what’s possible. 
3. Take charge by creating a fundraising plan. Now that you know what’s realistic and you have the data from your past fundraising activities, map out what your fundraising initiatives for the year and how much you think you can raise from each. Make sure the plan you’re creating can be realistically implemented by the team you have in place. 
4. Share the plan with your team. People like to follow leaders with a vision and a plan. Share the plan with your team so that they understand how it all fits together and how you’ll get to your goals. Seeing the plan on paper and seeing how the money will come in can help shine a light on what’s realistic - especially for those who aren’t in the trenches with you everyday. 
5. Moving forward, don’t work in a vacuum. If your leadership is looped into your work year-round, you’re less likely to end up on different pages about fundraising expectations at the start of the next fiscal year. Find ways to work collaboratively and share updates with leadership year-round to mitigate this issue in the future. 

Including your leadership in your fundraising efforts is so important. It can also be tricky. That’s why in today’s freebie I’m sharing 5 tips for how to include your leadership in fundraising strategy all year long.

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