Goal, Projection and Actual: Time to Plan Your Next Fundraising Year
Photo by Rachel Danner on Unsplash
College presidents are no strangers to making high stakes decisions with too little data.
Planning for next fiscal year often requires exactly that. Given budget planning cycles, board meeting schedules and mid-summer fiscal year starts, now is the time to take a hard look at the financial resources you will have available next year.
Many presidents will convene offsite cabinet retreats in December to assess where the institution is mid-year and to begin conversations about next year. First quarter data should be available, and much is already known about second quarter performance. Assessing these data are important pieces of information for predicting what you will have to work with next year.
There is more confusion than there should be in higher education among three terms commonly used in business: Goal, Projection and Actual. There are administrators who will adjust goals (really projections) throughout the year based on year-to-date performance (actuals) while “projecting” they will raise at least what they already have in hand. Guess what – they’re never wrong and they never miss a goal!
Goal
Your job as president is to set a fundraising goal for the year with your advancement office’s input and your board’s approval. Unlike campaign planning, for annual planning and assessment, focus on a cash-in-hand goal. Hold to the goal once the budget is approved and/or the fiscal year starts. Even when you know that you will miss the goal, use that awareness constructively as information that can influence a mid-course correction and planning for the subsequent year. Measure the gap, manage the gap but don’t ignore the fact that you once had reason to believe you would perform better than you have. Conversely, don’t raise the goal in a high performing year. Raise your projection and celebrate exceeding the goal.
Projection
Your goal-setting process should be grounded in past performance and current prospect plans. As a result you should be able to assess where you are relative to outstanding, completed and future asks at any time on any day. As you gather the cabinet for winter retreat, ask your advancement office for calendar year-end and fiscal year-end projections. Break the projections into cash-in-hand, written pledges, and expectancies. Expectancies should include verbal commitments, future asks in which there is a high degree of confidence in getting to “yes,” and a reasonable proxy for past performance that does not include the pledges and expectancies already accounted for.
Actual
When your team uses the terms Goal and Projection consistently, it is easier to be brutally objective about Actual totals. Keep measurement of cash-in-hand (gifts and paid pledges) separate from pledges. Unlike campaign accounting, for annual assessment and planning, only count pledge payments due during the fiscal year in question not the total value of a multi-year pledges. Celebrate multi-year pledges and count them in campaign totals, but don’t let them be oranges counted against your annual apples goal.
When you are ready to set realistic, yet ambitious, fundraising goals and exceed them, call me.
In the meantime, Download: 3 Things Every College President Should Know About Fundraising.
Pro Tip: When setting next year’s goal, examine about five years’ worth of fundraising performance as well as current year projections. The more years you use, the more you account for unexpected large one-time gifts as well as unexpected economic downturns and disappointing donor turndowns.