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Setting your major donor fundraising targets

When it’s time for budget setting on top of everything else….how can you get an ambitious target for your major donor fundraising, that’s also achievable?

Although major gifts can be transformational, they can also be a tricky customer when it comes to budgeting. If just one major gift doesn’t come in, you can easily be left with a large gap to your target.  Yet it can be easy to feel bold with major donor predictions.

There could be that one wealthy individual out there that you haven’t yet met, couldn’t there? They might be able to give £100,000 or more….

I’ve known leadership and fundraising teams to add thousands of pounds to a major donor target in a flash.

When all the other income streams don’t add up to what your organisation needs for next year, it can seem a simple fix to add zeros to the major donor target.

A major donor fundraising target of £1.1m
The previous year’s income £85k
A charity with an 18 month old major donor fundraising programme.

This was how I started a role heading up a major gifts team nearly a decade ago. This was quite some growth that had been predicted -13 times more income in a year! I assumed (never assume!) or hoped there were opportunities behind the target. On further investigation, this wasn’t the case. It had been decided that major donor fundraising meant millions of pounds of income.

With such an unachievable goal, the major donor fundraiser had, unsurprisingly, become demotivated. In my first few weeks on the job, with 3 months of the year to go, I had to report a significant risk to income.

We desperately want to raise more for our causes and believe we can. It is vital to plan for new major donor fundraising opportunities, identify new potential major donors (not from the Rich Lists!) and inspire them. The charity I was at were hopeful and ambitious when they set that £1.1m target. They wanted to raise more.

So how can we keep the ambition but stay realistic when putting our major donor fundraising budgets together?

Here are 5 top tips to having more confidence in your major donor budget:

1 Resist the temptation to just increase last year’s figure

You increase last year’s income by 50% — because you’d like to see 50% growth. This is a very quick way of setting a budget but it isn’t robust. Let your opportunities and your plans tell you what that growth figure should be.

2 Identify confirmed pledges

If you are not sure whether a gift will come in or not, put them in the pipeline of opportunities below. Include in pledges major donor income that is 95%-100% likely to come in. If this is zero or low, you could consider a focus on multi-year asks over the coming year. Then when you look at pledges in 12 months time, it should be far higher.

3 Build a pipeline of major donor fundraising opportunities

You can use your caseload/list of existing and potential major donors here but don’t just add a name of a “cold prospect”. Only include people who you know are high-net-worth and when there is some connection to your organisation. Estimate a gift amount for each of them — this can be uncomfortable for those you know less well, but still include it. Then include the percentage likelihood of success. If for example, you estimated a £20k gift with a 50% likelihood, you’d end up with £10k going towards your budget.

4 Consider those major donors you don’t know

This is the trickier element – you might not want to limit your major donor fundraising programme just to those individuals already on your radar. You may have meetings coming up where you’re likely to get some introductions to new potential major donors. You might be investing in some wealth research. As your budgeting might be taking place 15 months out from the end of your next financial year, you may have time to develop some of these new relationships within the year.

This thinking though can allow the hope and ambition to edge up to unrealistic levels. You could end up adding extra zeros to your budget without basis. It’s a judgement call.

5 Challenge your figures – don’t decide it in isolation

Some of you will have finance colleagues, your line manager or CEO who talk through your budgets & challenge you.  If you don’t, then create this process. Saying out loud why you’ve made certain decisions and discussing the judgements you’ve made is crucial, particularly when the decision you make about one major donor could influence your entire target.

6. Perfection isn’t possible for major donor fundraising targets!

Did you smash your figure? You obviously weren’t ambitious enough!

Did you not manage to reach it? There’s a hole in income…

This may sound familiar. Don’t aim for complete accuracy, because it will never be possible.

DO aim for an ambitious budget, but one that you truly believe you and your team could achieve.

Photo of Louise, charity fundraising consultant

Louise Morris is Founder of Summit Fundraising. She is a major donor fundraising specialist and has worked with over 100 charities helping them raise large gifts.

This was posted on 28 October 2021.

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