Podcast: Setting Outrageous Goals: Crafting the Right Campaign Goal for Impactful Fundraising

Season 3, Episode 36

In this episode, Amy and Andrea explore the art of setting the right campaign goal. Is there such a thing as a “right” goal, and how do you determine it?

Discover the three key considerations organizations must keep in mind when establishing their campaign goals. First and foremost, what do you need the money for? Amy and Andrea guide you through aligning your financial objectives with the impactful outcomes you aim to achieve. Learn how to connect your campaign goal to your organization’s strategic plan and avoid arbitrary figures that lack purpose.

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Andrea Kihlstedt:
Have you considered setting an outrageous capital campaign goal?

Amy Eisenstein:
Hi, I’m Amy Eisenstein. I’m here with my colleague and co-founder Andrea Kihlstedt, and today we are going to talk about the all-important topic of setting the right campaign goal. And I’m saying right in quotations, is there a “right” goal? How do you figure it out? What’s the “right” goal? Let’s get into it.

3 Key Concepts When Setting Your Capital Campaign Goal

Andrea, we’re going to talk about three things that are very important to consider as organizations set a goal for their campaign. What’s the first one?

Andrea Kihlstedt:
The first one is the simplest really, what do you need money for?

Concept #1: What Are You Raising Money For?

What are you going to raise money for your campaign? And that really forces you to think through, “All right, why are we doing this campaign? What are we going to do with the money once it’s raised? And is the stuff we’re going to raise that money for important? Does it matter? Is it exciting?” Start out with that question:

“What do we need the money for?”

Amy Eisenstein:
What is the impact that we want to make and how much does that cost? Work backwards from what difference do we want to make? What change do we want to see in the world? What does our strategic plan say and how much does it cost to accomplish that? Because I think people often work in a different direction or arbitrary.

If you’ve come to a campaign goal of 25 million because it’s your 25th anniversary, that has nothing to do with what you want to accomplish in the short and long term.

Your campaign goal initially has to start out being connected to the impact. Now, that doesn’t mean that that’s where you stop your goal. You’re going to add things like fundraising costs, the first three years of new programming, marketing, infrastructure, capacity building. There’s lots of things that you can add to your campaign goal, but they’re all connected to real outcomes, impacts and costs.

Andrea Kihlstedt:
It’s so important. Now, I have to give an aside now here, really when you’re listening to this podcast, if you’ve just been having a conversation with your board chair or president because your organization is about to have its 25th anniversary, and your board chair wants you to do an endowment campaign for $25 million, and you think to yourself, “I’m going to set up a strategy session with Andrea and Amy to talk about that.” I got to tell you, if you do that, what’s going to happen? Amy and I are going to laugh. We’re going to laugh at you and with you and behind your back, we’re going to say, “Oh my goodness, another organization that thinks that 25 years leads to 25 years of endowment.” Just don’t do it.

Get your organization to think more carefully about what the next 25 years is going to bring and what it’s going to take to fund that. Then call us up and say, “Hey, we figured out what we have to raise money for and where it’s going to take our organization.” Then we’d be happy to talk to you. But don’t fall into that 25 years, 25 million endowment. We’re going to laugh at you.

Amy Eisenstein:
In the nicest possible way.

Andrea Kihlstedt:
Nicest way, but we will.

Amy Eisenstein:
It’s a very common mistake, which is why we’re bringing it up. We hear it all the time. You won’t be alone, and we will continue to get those calls from lots and lots of people who have well-meaning, but ill-informed board members who believe that.

Think about it — it has nothing to do with the impact. The number is totally arbitrary and it has nothing to do with what you’re actually able to raise, which we’ll get to in just a minute.

As the first step in figuring out your goal is how much is it going to cost to accomplish what you want to accomplish, then you may come up with an outrageous goal. If you want to cure cancer, that costs a lot of money. You may be coming up with a number that’s so many more times what you currently raise. It seems unrealistic and unlikely. Go ahead.

Andrea Kihlstedt:
Curing cancer is an extreme version of that. But let’s look at a more likely version, which is that your organization wants to have a new building, and it turns out that buying the land and doing the new building is going to cost $15 million, and your organization is never raised in one year more than $500,000.

$15 million may seem totally outrageous. Now, it may or may not be outrageous, but if a $15 million building is what you need to move your organization significantly to the next level of operation, you may be justified in moving down that road because you may need a building like that to actually be able to serve more people and serve them better and make a bigger difference in your community.

If that’s the case, don’t let yourself be stymied just because there are so many zeros at the end of that number.

Amy Eisenstein:
Yes, this is the opportunity to dream big, to plan your dream project. And at this stage of your goal development, we’re going to call it a working goal, or you might think of it like a draft goal. And right now, your working goal in Andrea’s example is 15 million.

Concept #2: Carefully Consider Your Donor Base

Now, step two, let’s refine the goal perhaps a little bit more. What’s step two, Andrea?

Andrea Kihlstedt:
This is a great time to take a look at your donor base, to take a look at the people who are most committed to your organization and to say to yourself:

“You know what? We should really consider whether we have 10 people who are maybe able to give us and might consider giving us gifts of half a million dollars or more, $250,000 or more. Do we have people who are current contributors?

People who are passionate about our organization, who they may not give that to us annually, they may give us a thousand dollars a year annually, but they may have the capacity to give us significantly more.”

Spend some time looking at your donor base and maybe doing a little prospect research. Say, “Do we have people that we can go to and talk to about those top gifts?”

If you’re going to do a $15 million campaign, you’re going to need a gift of about $3 million at the top of that, maybe even a little more. Is there anybody in your community with whom you have had contact, who believes in your organization that you might be able to have that conversation with?

If your answer is yes, we know where that money might be, then you’re really edging towards identifying a campaign goal, but you still have one more thing to do.

Amy Eisenstein:
Hold on, let’s not leave that for yet. I think we can talk about, because I think a lot of organizations, a lot of nonprofit leaders, their immediate gut reaction was, no, we don’t have a $3 million donor. And I don’t want you to stop there.

Actually, it’s not just a 15-minute thought or conversation. Actually set up some meetings with movers and shakers in your community. Talk to your board members. Just because the staff doesn’t know the person, or you can’t identify the 10 people immediately, that might give you half a million dollars or more. It doesn’t mean that they’re not there. I want you to do a little more digging.

Two Helpful Acronyms for Doing Donor Research

Let me give you two acronyms that we use to do some donor research, to think about your donors in a more thoughtful and deep way to do some research.

1. RFM = Recency, Frequency, and Monetary

One, the first acronym is RFM. It stands for recency, frequency, and monetary. You’re going to look at your donor list and look at who are the people that have given to us recently within the last year, within the last five years? If somebody hasn’t given in 10 years, they’re not nearly as likely to give as somebody who has given in the past year.

Frequency is how frequently do your donors give, do they give annually? Do they give monthly? Have they been giving every year for 10 years or 20 years? Those people who have given more recently and who give frequently are likely to be better prospects.

And then finally, of course, it’s money. Monetary, who’s given a thousand dollars or more, $5,000 or more, or $10,000 or more? Whenever we ask these questions:

“Do you have anybody who’s likely to give half a million or more or a million dollars or more?”

Usually the reaction of staff is, no, nobody gives us that amount. And my response is two things. One is, you’ve never asked for that amount before and you’ve never had a project exciting enough to warrant a request for that amount. Don’t worry if nobody’s given you that amount before. Of course they haven’t. But you’re going to look at your donor list with a different eye.

2. ABC = Ability, Belief, and Capacity

The second acronym before we move on is ABC. And we talk about qualifying donors. A stands for?

Andrea Kihlstedt:
Ability.

Amy Eisenstein:
Ability, financial ability, ability to give the gift you’re looking for. You’re looking for people who have the financial ability to give you half a million or more or whatever your number is. How do you know? Have they made gifts of that size to other organizations in your community?

B is for belief. Do they believe in the mission or the cause? How do you know? Do they give to you? Do they give to others?

C is for contact. You have to have contact with these people. You have to be able to email them, pick up the phone and call them, have them respond. Some acronyms to help you whittle down your list.

Andrea Kihlstedt:
Amy, a couple of things to keep in mind. First of all, I’ve found, we’ve found that most organizations that have a professional development staff and that are doing what they should be doing year in, year out, fundraising actually have a pretty good idea of who those donors are. That they don’t have to go through a huge exercise to figure it out. They have a pretty good idea. They could probably list five of them or maybe more of them, that this is not out of the blue that this question comes.

If it feels to you like it is coming out of the blue, it’s probably just because you don’t have a professional development operation yet. Now that points to the fact that maybe you need to do that. If you don’t know quite easily where those gifts are, you probably have some work to do before you do a campaign, or your goal may have to be lower than it would be if you were more advanced in development.

The other thing, Amy, is that you were asking me what A stands for — adorable.

Amy Eisenstein:
A is for adorable. A is for Amy and Andrea, come on.

Concept #3: Aim High and Make it Exciting

Now we’re ready to go to the third thing. When setting your goal, you want to figure out first, what are your plans going to cost? Second, do you have the donors potentially to do at least those lead gifts? And third, now, what’s the final consideration as you work towards your initial working goal?

Andrea Kihlstedt:
How much risk is your organization willing to take on? Is your organization risk-averse? Is it a timid organization? Does it have a timid culture, or does it have a culture that says:

“Let’s try and see what happens? Let’s see. Let’s push the edges. We can always pull back. Let’s push the edges.”

Now, that’s a cultural thing with organizations. You have some organizations, and it often stems from leadership. It may stem from the executive leadership or the board leadership. Look carefully at your organization. Think to yourself or ask the leaders of your organization, “Do we have the stomach to actually take on a working goal, even consider a working goal that is big enough to be breathtaking? Are we that kind of an organization or does it make us as an organization too uncomfortable? Should we be a little more timid?”

Now, if it were up to us, we would always push you to take risks at this early stage. You can test a big goal if you find that it’s not likely to be there once you’ve tested it, talking to donors, you can always pull back your working goal. And I’d much rather have you do that then test a timid goal that’s not particularly exciting.

Raise that money and find that you don’t have enough money to do anything terrific. If your organization has the tolerance and it is important that they do, then by all means push for a larger, more exciting, more heart stopping goal.

Amy Eisenstein:
I think I want to just remind people that risk tolerance is relative. Risk is relative. First of all, we’re talking about calculated risk. There’s two things that you’ve already done to calculate the risk, or at least to come to a reasonable goal:

1. One is you’re basing it on an exciting project.
2. And number two is you really are looking at donors on your list and in your community who might help you realize this dream.

It’s not arbitrary. And you are testing, you’re taking a calculated risk here, and truthfully, you’re not risking much of anything because you’re going to test it in a feasibility study. And you’re going to mitigate the risk significantly more by doing a feasibility study and talking about this project and this goal and testing it with your lead potential donors. And that’s another way of lessening the risk significantly, and finding out if your goal is realistic or not, or in the realm of possibility.

Andrea Kihlstedt:
And just because you’ve chosen what might to some people feel like an outrageous goal, if you say this:

“Really, this is an idea, and these are investments that are going to make such a difference in our community.”

[That] may, on one hand, looked to be outrageous. On the other hand, it’s a perfectly reasonable thing to do if the difference you make having raised that money is big enough. And to that end, I have a great story that I’ve remembered. Can I tell a story, Amy?

Amy Eisenstein:
Go ahead. Tell a story.

A True Story to Drive Home the Point…

Andrea Kihlstedt:
Here’s the story, and I believe it to be a true story. I wasn’t involved in it, I don’t know the actual characters, but the story is this:

There was a town, I believe, somewhere in Texas perhaps. And there was a very large donor who gave significant gifts, and the large donor had a very good relationship with the president of the college that was in that town. And they would go out together, and periodically the president would ask this large donor for a gift to the university, and he often would give a major gift. And the university was gearing up for a campaign. The president starts to approach the donor, his friend, for a big gift. To make the story simple, let’s say it was a million-dollar gift, and he had every anticipation that he was going to get that gift.

At the same time, there was a smaller arts organization in town that was launching a campaign that was a much smaller campaign than the university was launching, and they needed a million-dollar gift at the top of that campaign. And they too went to this donor, whom they didn’t know very well, and they spent some time talking to the donor about what they were trying to accomplish in the community with this campaign they were doing, and what a difference that million-dollar gift would make if this donor would give.

Lo and behold, the president of the college one day wakes up, gets the local newspaper, and in the local newspaper, there’s a headline that says:

“Donor gives million dollars to arts organization.”

President calls up his friend, “Hey,” he says, “I don’t want to be offensive, but why did you give the million dollars to that organization and not to us?” He said, “I got to tell you, they came to me with a million-dollar idea and you didn’t.”

Amy Eisenstein:
Exactly.

Andrea Kihlstedt:
Great story.

Amy Eisenstein:
That’s a great story.

Andrea Kihlstedt:
There aren’t many million-dollar ideas and an idea that’s exciting enough and big enough to make a big difference in the community. And what the president of the college or university had done is to say, “Hey, we’re having a campaign, our centennial campaign, won’t you give us a million dollars?” And it wasn’t an exciting idea. They didn’t get the million dollars, the small arts organization did.

Amy Eisenstein:
Excellent. The moral of the story is your goal needs to be based around a really exciting idea in order to get donors to dig deep and make really exciting gifts. Excellent.

I hope that this has given you a start on figuring out your working goal, your draft goal as you march along towards your campaign. Go ahead, Andrea.

Andrea Kihlstedt:
We hope it’s inspired you to think big and do great things to make a difference in your community.

Amy Eisenstein:
We’ll see you next time. Thanks for joining us.

Andrea Kihlstedt:
Thanks for joining us.