Friday, December 1

Projections, predictions, and the problem of past performance

It's Friday, December 1st - the first day of the last month of the year.

Which means in 31 days all of 2006 will be closed. Except for those first few days in January 2007 that we plan to continue logging gifts into Raiser's Edge and hoping the auditors will let us book late deposits back to 2006.

Without cheating can you write down your 2006 gross fundraising goal off the top of your head? Can you write it down to the dollar or do you have "rounded zeros" budgeting? What about your expenses? Or can you remember your annual budgeted net... and can you back into the last number if given the first two?

What about your best guess projections for 2006 against those budget guesses... Can you guess - within $1,000 - how close you are going to be at the end of the year? Do you have the ability to constantly compare this year to last year at this time? Should you be able to?

I have a fundraising friend who tracks daily trends in website giving, but even on Christmas Eve, he says his guess can be $100,000 or more off because he can't estimate the spikes he hopes for during the last 7 days of the year. I know another major donor fundraiser who gets 85% of his annual budget in December... and when I saw him last he looked pretty worried. "Hopefully I get a couple of those IRA rollover gifts this year because of the tax law change... but who knows."

My point is... sure, I so there are some things that we can control up to a point and then after that "luck" takes over. But that is such a minor part of what we do.

Too often I hear of fundraising departments that believe it is their job to analyze past campaigns after they happen in order to analyze which techniques worked best. But, it discourages me when I hear fundraising who feel they do not have a responsibility to provide cash flow prejections and predictions to the finance teams.

Even if you work in a development office where there are several different types of appeals, renewals, and acqusition mail campaigns going on at the same time... and if you also have board events, grants pending, major donor dinners coming up, and maybe even telemarketing... I hope you'd be able to pencil out where your year is going to finish within a $1,000.

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