Strategic Planning

For many of us, fiscal year-end is right around the corner. This is often a busy time of year, and while it may not be as hectic as November and December in terms of sheer volume, there are still plenty of things that require our attention, not the least of which is planning and goal setting for the coming year.

This important step often takes a back seat to more immediate tasks such as closing out the books and even vacation time during this time of year. In addition, many organizations rely on outmoded or imprecise “back-of-the-envelope” calculations to create goals for the coming year. But there is hope! Regardless of whether the goal you’re setting is financial or based on activities, or whether it applies to your entire organization or only a small team, here are some practical techniques that can help make your goal setting more proactive, efficient, and accurate.

Be Proactive

It may feel like July 1 is a long way off, but it will sneak up on you whether you’re ready or not, so it’s best to begin setting the stage now to ensure you start the new fiscal year on the right foot. Done correctly, the process of setting and tracking your goal can have many ancillary benefits, including breaking down silos between teams, creating a heightened awareness of other business processes that affect progress towards your goal, and being a significant motivating factor for staff. In order to be successful, a good goal must have the following qualities:

  • Simple: Your goal should be tangible, straightforward, and defined in the simplest form possible; i.e., without any conditions or nested components that must be met in order for the goal to be achieved. Each person involved should be able to identify with the goal.
  • Measurable: You must be able to track progress against your goal, so creating a vague or otherwise unmeasurable goal does no good for you or your institution. During the planning phase, make sure your organization is equipped to track and report back on the data necessary to measure your goal throughout its lifecycle. Reporting on your goal should be quick, efficient, transparent, and accessible to others.
  • Well Communicated & Understood: In order to be able to hold yourself and your team accountable for progress against your goal, it must first be communicated in a concrete, straightforward manner so that each member of your team can identify their roles and responsibilities clearly.  Also, expectations should be set—and followed-up on—from day one.

Increase Efficiency & Accuracy

Goal-setting doesn’t require some next-gen supercomputer or advanced statistical techniques, but on the other hand there is too much at stake to create goals using haphazard guessing or by taking what was done last year and adding some constant percent increase. A thoughtful and comprehensive goal should be created using proven methodologies. Success is often found by combining several methods to provide a range of options that allow you the flexibility to adapt to changing conditions.

Leveraging a data-driven approach to goal setting can increase the efficiency of creating your goal and can have substantial impact on the accuracy of your projections. Adopting a methodical, data-driven approach can also assist in reporting progress towards your goal over the coming weeks and months. A few of our favorite techniques are described below:

  • Trendlines: Using one or more of a variety of forecast trendlines is one of the most popular and easy-to-implement ways to evaluate past data and project into the future. This is easily accessible in programs like Excel, and the current version offers linear (steady growth/decline), exponential (more aggressive growth/decline), and logarithmic (conservative growth/decline) trendlines, among others.
  • ARIMA: A more advanced technique, an ARIMA (AutoRegressive Integrated Moving Average) time series forecast can be a good option if your data can be transformed so that properties of your data such as mean, autocorrelation, and variance are all constant over time (this is known as “stationarizing”) and if you have plenty of data to work with (in the case of seasonal data, at least four seasons is a good rule of thumb). You can use ARIMA forecasting in your goal-setting efforts with the help of specialized software, notably R, Python, and IBM’s SPSS Modeler.
  • Predictive Modeling: Various types of predictive models can also be beneficial for your goal-setting efforts in that they can help you understand what might happen in the future. For example, a model focused on your non-donors’ likelihood to become donors within the next 12 months, or their likelihood to give at a certain level or to a certain unit within your institution, can help you set a range of goals from “very likely” to “aspirational.”
  • “What-If” Scenarios: Compared to supply chain logistics, we as fundraisers have relatively few levers that can be pulled to affect a given outcome. We do have some and testing the potential impact of adjusting certain parameters—such as the number of frontline gift officers, portfolio size, or composition—is the name of the game in “what-if” scenario modeling. Although this may sound too complex or technical to try yourself, it doesn’t have to be (very sophisticated versions do exist, however!). In fact, Microsoft Excel contains a simplified version that allows users to adjust the values of certain formulae. For example, what happens to your year-end total in your so-called “worst case” donor count scenario, and what about the “best case.”

These are just a few of the techniques that can be used to improve the effectiveness and accuracy of your goal-setting. By being proactive and making a few small investments of time and effort today, you can lay the groundwork to successfully track and reach your goals throughout the coming year.