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Use Data to Inform Annual Fund Revenue Budget

We've reached the third and final video in our series on using data to project revenue, this time focusing on the Annual Fund.

Today, we're tackling a common budgeting approach that might sound familiar: applying a percentage increase to the current year's goal.


But how often does this approach lead to large variances, either up or down, or even worse, budgeting a number because 'that's what we need to do'?


Let's explore a more data-driven and strategic method.


Common Budgeting Approach


Have you ever applied a percentage increase to the current year's fundraising goal and used that as your budget for the following year?


Most, if not all, of us have.


But here's the challenge: Were you then left to figure out how to achieve that goal without any additional resources?


Did it often lead to large variances or budgeting just because it seemed necessary?


The pitfall of using percentage increases as the sole basis for your Annual Fund budget is that it often lacks a strategic plan.


It assumes that you can achieve a higher goal without addressing the 'how.'


So, what's the alternative?


Data-Informed Projections


Let's build your Annual Fund revenue budget based on data.


Start by estimating the number of donors per giving level and the lowest amount at each giving level.


Let's illustrate this with an example:


Suppose you have one hundred donors at the 'Bronze' giving level, each contributing a minimum of one hundred dollars.


That's a projected revenue of ten thousand dollars just from the 'Bronze' level.


Repeat this calculation for each giving level below the amount your organization considers a major donor.


To project revenue from major donors, project revenue for each donor individually taking into account their specific circumstances and your plans for making the ask.


Once both parts are completed, add up the numbers to get your comprehensive Annual Fund projection.




So, here's the key takeaway: Data-driven projections provide a solid foundation for your Annual Fund budget.


It helps you set realistic goals and create a plan to achieve them.


By understanding the 'how,' you're in a better position to secure the resources needed for success.


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