5 Guidelines for Establishing Effective Annual Giving Goals

Posted on 03/09/2016

SMART GoalsThe practice of goal setting is quite common in annual giving. Too often, though, goals are conceived in haste or simply handed down by managers without enough thought or consideration. When this occurs, goals become hollow and ineffective and lose their ability to motivate staff. In fact, it can actually demotivate them.

A common problem is that goals are often confused with tactics. Goals are the things you expect your program to achieve. Tactics, by contrast, are the actions you will take to help achieve your goals. If goals are the anticipated result, then tactics are the means to achieve the result. For example, “increase alumni participation by 1 percent over the prior year” is a goal. A tactic to help achieve that goal might be “increasing the number of fundraising events for recent graduates.”

If you expect your annual giving goals to be effective, then they’ll need to be SMART—an acronym that stands for specific, measurable, ambitious, realistic and time bound.

  • Specific. Broad and generic isn’t going to get you very far. You need to be clear about what you are trying to accomplish. For example, “growing the annual fund” is not a specific goal. Be sure to specify what programs and constituencies are your highest priorities and explain what outcomes you expect for each. You can’t do it all, so don’t be afraid to say that you’re going to focus on some areas more than others.
  • Measurable. You won’t achieve what you don’t measure, which is why it’s so important to have quantifiable goals. For example, “increasing alumni donor counts” lacks a measurable and quantifiable target. With an immeasurable goal like that, what would be the motivation to achieve a large increase as opposed to a small increase? By contrast, “increase alumni donor counts by 5 percent over the prior year” provides the annual giving staff with a clear idea of what constitutes success.
  • Ambitious. The purpose of goals is to motivate growth and to accomplish more than has been accomplished in the past. Just like it’s important to set the bar high when soliciting gifts from individual prospects, it’s important to set the bar high for staff when it comes to goal setting. For example, if your program secured 5,000 alumni donors last year, then setting a goal of 5,001 alumni donors this year is not very ambitious.
  • Realistic. Setting the bar too high can be as unproductive as not having any goals at all. For example, if your program secured 5,000 alumni donors last year and has shown no growth in alumni donor counts over the past few years, then setting a goal of 7,500 alumni donors this year may be unrealistic. Unrealistic goals often result when they are assigned without input from the annual giving team. This is referred to as a “top-down” approach to goal setting. Unrealistic goals can also occur when they are developed in a vacuum without data to support them. Regardless of how they occur, unrealistic goals can result in a “doomed to fail” mentality and they do nothing to inspire creativity or hard work.
  • Time bound. Goals need to have a deadline. Although most annual giving programs identify where they expect to be by the end of the fiscal year, they should also set short-term milestones for achievement throughout the year. Setting monthly or quarterly goals can provide a way to assess progress along the way and identify problems before it’s too late. For example, imagine that your goal is to secure 5,000 alumni donors by the end of the fiscal year with 3,500 of them secured by the third quarter. If by the end of the third quarter you have secured only 3,000 alumni donors, then you may want to consider adding another mailing, hiring additional callers or implementing an extra incentive in the final few months of the year.

When it comes to goal setting, it’s also important to keep the big picture in mind. That’s why long-term goals are important. Long-term annual giving goals can be particularly important in the context of multiyear fundraising campaigns. Consider the following table, which maps out a path for increasing alumni participation rates by 1 percent each year over a five-year period. In addition to defining annual targets for alumni participation rates, it also specifies targets for each of the key drivers of alumni participation, including alumni of record counts, donor counts, and retention rates. The value of a table like this is that it not only states where you want to end up, but it also describes how you intend to get there.

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8.2_Five Year Projection Grid

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