Mind the Gap

It’s not news that if you don’t have a goal in mind, it’s likely that you won’t get there. So many nonprofits create a fundraising goal that is based on increasing last year’s results by some percent.

Other nonprofits decide on their fundraising goal by using the amount of their gap. That London_Underground_2614020bis, how much more revenue they need to keep their doors open and their programs running.

Both these methods have some validity. But the emphasis is on the word some.

The first way of creating a goal has good PR value—we are increasing last year’s accomplishments!–but little else. The second performs a necessary function. Fundraising can bridge the gap between revenue that comes in and what it really takes to run your organization. BUT (and it is a but worthy of all caps) your fundraising goal should be built on much more than simply meeting immediate needs.

According to the Nonprofit Almanac put out by the Urban Institute, less than 14% of most nonprofit revenue is brought in by private gifts. These gifts includes contributions and grants from private foundations, corporations, and – mainly—individuals.

What if you decided that philanthropy should account for 20% of your operating budget? I’m not saying that if your operating is $1,000,000 that $200,000 of it should come from private charitable gifts. No, I’m saying that if your budget is $1 Million, and currently $136,000 (or the 13.6% that, according to the Urban Institute is what is a typical nonprofit brings in via fundraising) is what your organization relies on to bridge its gap, then by all means raise that—and raise an additional $64,000 to grow your organization.

Perhaps this additional money will go toward ensuring you have a strong reserve, or growing a program, or (and I know this is really subversive) increasing salaries so you are paying salaries that equate to equal jobs in the for profit sector. Whatever you do—and whatever your numbers are—I’m merely suggesting that fundraising goals need to do more than consider only a bit more than you know you can do or the precise amount you must do.

 

Janet Levine works with nonprofits, helping them to increase their fundraising capacity. Learn how she can help your organization at www.janetlevineconsulting.com or email her directly at janet@janetlevineconsulting.com

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About janetlevineconsulting

For over 20 years, Janet Levine has worked for and with nonprofit and educational organizations, helping to grow their advancement programs. Her consulting company, Janet Levine Consulting, serves a wide range of organizations from small, all-volunteer agencies to major national organizations. She regularly teaches courses in non-profit management, fundraising and grant development, both face-to-face and online at http://courses.lmlearningstation.com/. In addition to her nonprofit work, Janet brings years of experience as a business and sales manager in the for-profit sector. She has an MBA from the Graziadio School of Business at Pepperdine University.
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