Stretch goals: don't aim for a marginal increase. (Fundraising).

Fundraising goals have been a hot topic among nonprofit professionals and in the news media recently. Did organizations exceed, meet or miss their 2001 goals? For those who missed, was it the fault of the economy or September 11?

Anecdotal reports paint a complex picture ranging from bleak to bountiful. As final numbers are tallied and new goals are set or adjusted, the sector should step back and consider the way fundraising goals are thought about, regardless of the fundraising climate.

The pressure to meet goals is often intense. Increasing demands for services, competition among organizations for support, and career ambitions further raise the stakes. Some organizations get so caught up in trying to meet the goal that it can even create an incentive for "creative" accounting and reporting.

Others deliberately set goals that are too low so they can easily meet or surpass them. Unfortunately, this often means the organization and its fundraising do not achieve their true potential.

Meeting the goal is important. It can help a nonprofit demonstrate fundraising prowess, attract funders, inspire donor confidence and future giving, and enhance its reputation. But by setting "stretch" goals based on real needs, nonprofits may reap some or all of the same benefits while raising more money, even if the organization falls short of the goal.

Consider an organization with a campaign goal of $15 million, a low target it is confident it will reach. The campaign exceeds the goal, raising $20 million dollars. Hooray for the overachievers, right?

But what might happen if the same organization, after assessing its capacity and gift potential, stretched toward a $30 million goal that more closely matched community needs?

Suppose the campaign raised $25 million; $10 million more than the lesser goal. Did the fundraising team and volunteers fail because they missed the goal? Or, did they succeed because they successfully challenged the organization and the community and raised substantially more than they thought they could? Would they have raised as much if they had set a lower goal, even if they had exceeded it?

Setting the goal

Here are some concepts that need to be considered when fundraising.

Determine the needs and build a strong case. Stretch goal setting begins with an accurate assessment of constituent needs and organizational capacity, and the goal set should be appropriate to both, but not inflated.

Organizations can only raise money if it can be demonstrated that to provide desired programs and services more than what other revenue sources generate is needed. The essential ingredient for campaigns with stretch goals is a compelling case for increasing support.

If the organization cannot deliver a strong case, it should reconsider the level of investment it seeks from donors. Even long-time donors need sound reasons to increase investments. "We need more than last year' or "It's September, time for the annual appeal" is not a case. The case must show increased activity, fresh initiatives, and evidence of adapting to changing needs.

Do not ignore the past. The amount of money previously raised helps determine the amount that can be raised in the future. An organization that raised $10 million last year may not be able to raise $50 million this year.

Nonprofits should not limit goals to a marginal increase compared to the past year's goal, either. Be aware that if past goals have been consistently low and achievable, donors may question whether a stretch goal is feasible. In part, that may be because the organization has not stretched donors' thinking. Early conversations with key donors about compelling needs and innovative solutions will be crucial in shaping, explaining and meeting the stretch goal.

The organization's goal is everyone's goal. Too often nonprofits simply look at income versus budget expenses and set the difference as the goal without examining the external fundraising environment, the case for support and other critical factors. Goal setting should involve everyone who is responsible for working toward the goal, including the CEO and CFO, key board leadership, the annual fund committee, and major donors, in addition to the fundraising staff.

Collective goal setting is critical so that each person can fully understand and promote the goal. Likewise, it is important to invite the public to buy into the plan from the outset. The nonprofit should explain up front to the public and the media the needs that exist and what the organization is trying to achieve. Organization leaders should make clear that they are not sure that they can reach this goal based on what they would normally expect to be able to do, but that because of the needs identified, they want to strive for the higher goal.

Missing the goal -- now what?

There are many reasons why organizations do not achieve fundraising goals. Environmental factors, such as a slowing economy, can cause donors to be more cautious. Campaigns may rely too heavily on past good will or on a few key donors. Or, an organization may set a true stretch goal and do everything right, and the "failure" is a result of challenging the organization to do more.

When a goal is missed, the first order of business is to look internally and examine both the programmatic and fundraising processes to understand why. Is the case fresh? Was the work necessary to set an appropriate goal done?

Organizations should avoid placing immediate blame on the fundraising team without first conducting a thorough analysis of the campaign. Instead, the missed goal should be seen as an opportunity to examine the non profit's mission, goals, and overall effectiveness, as well as the strength of its fundraising program.

The nonprofit's leaders also should consider how other factors in the lives of constituents might have affected giving. Looking at external benchmarks can help nonprofits determine whether environmental factors contributed to a missed goal. Is the organizations performance in line with that of the nonprofit sector and similar organizations in the area this year? How do its gift history and the mix of its donor base compare with national trends?

The organization also must assess the consequences of missing the goal.

(If there are no consequences, there was no case). Modifications may have to be made to deal with a shortfall, such as trimming expenses without sacrificing the mission.

The organization's leaders must determine how additional funds can best be raised. Is refocusing and launching a whole new campaign necessary and feasible? Can board members, early key donors and other strong supporters who care the most be asked to consider additional gifts? Their early support indicates commitment to the organization's success, meaning they may be willing to give again when the possibility of cuts and unmet needs is brought to their attention.

Perhaps specific unfunded programs or projects can be packaged in a way that will appeal to a donor with similar interests. Consider checking in with early non-donors. Find out why they did not give initially and determine whether the new efforts better fit their interests.

Finally, organizations must be transparent with their boards, volunteers, and donors, and with the public. Non-profits should announce that they have missed their goals, how they are assessing why that happened, and what steps they will take next. If the campaign was a success in spite of missing the goal (for example, if the amount raised is more than it otherwise might have been due to a healthy stretch goal, or if it represents true success in light of the current environment), the nonprofit should make that case clearly and applaud the success.

If the organization failed, leaders should say so and share an honest, critical assessment of why. Organizations that do this enhance the public trust and help to reestablish themselves in a way that will increase future fundraising opportunities.

The nonprofit sector needs to approach goal setting from a different perspective. Stretch goals are not for every organization in every campaign, but they represent an important option that should be considered seriously.

Eugene R. Tempel is executive director of the Center on Philanthropy at Indiana University in Indianapolis.