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How to Set (and Meet) the Perfect Fundraising Goal for Your Nonprofit’s New Endowment

By: David Goldner

After you’ve allotted the time and resources to ensure that your nonprofit is ready for an endowment, the next question you must answer is: how much money do we raise? This decision, like many choices in business, comes down to your organization and specifically your current goals and operating budget.

Long-Term Fundraising Goals

The typical rule of thumb when setting a long-term fundraising goal for an endowment is that an endowment should be double your organization’s annual budget. Setting this long-term goal will do two things for your organization:

  1. Provide you with a reasonable fundraising goal to aspire to over time (remember, Rome wasn’t built in a day and neither will your endowment fund)

  2. Grab the attention of potential donors by setting a fundraising target that is big enough to incite interest without seeming unrealistic or unattainable

Your long-term fundraising goal should result in an ongoing payout that will provide long-term financial support to your organization. For example, if a nonprofit has an operating budget of $500,000, cultivating a $1 million endowment would provide $40,000-50,000 yearly to the organization at 10% of the annual funds.

Short-Term Fundraising Goals

When it comes to setting an initial, short-term fundraising goal, $50,000-100,000 is typically a good kick off point for most organizations. Again, this amount will vary based on your organization’s current goals and budget, but for most nonprofits, setting a smaller goal up front will help ensure your organization doesn’t lose heart while pursuing your long-term fundraising target.

Meet Your Fundraising Goals

For many nonprofits, the stumbling block in endowment management is not just setting your fundraising goals, but meeting them. The following are just a few ways to get your fundraising efforts off the ground:

  • Identify donors who have a history of contributing to your organization and may already possess the funds they plan to donate in the future, and ask if they are willing to help jump start the endowment for your organization

  • Offer a legacy type of naming opportunity for a large gift (such as in the $250,000-500,000 range) to start the endowment

  • Set a board policy that requires board members to contribute to the organization’s endowment during the term of their board service in addition to your normal annual giving request

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Published October 20, 2016

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