Monday, October 18, 2010

Are Your Income Expectations Realistic?

Do you expectations match reality? Use this checklist to test them.

Are your income expectations realistic? Yes, if you . . .

1. Base them on experience. You earned a similar amount in the past.

2. Establish them around industry standards. That is, someone in your sector regularly achieves this outcome with the same kind of inputs you plan. Your organization will struggle to make the funds it needs if it invests 5 percent of its budget to obtain foundation funding vs. the national standard of around 18 percent.

3. Support them with a solid strategy. Expenses less other income does not equal the amount of individuals’ donations you will raise. You can have all the pieces to make a ship model in a bottle, but without the instruction sheet, the strategy that gets you from here to there --the model will gather dust. For income, how exactly will you increase individual donations by 5 percent next year? What will you do today to work toward that goal?

4. Have access to the required resources. You can’t make spaghetti if you lack pasta and tomatoes. Do you have what you need to do the job? For your planned giving effort, do you have donors who have been giving consistently for seven years?

5. Own or invest to gain the necessary skills. You can have a bathing suit, plenty of grease and be at the shore, but this doesn’t mean you’re going to be successful swimming the English Channel. Do people in your organization feel comfortable asking for money?

6. Commit. You, your board and members may understand surviving requires different actions, but if all of you continue to embrace change halfheartedly, over time your expectations will become unrealistic.

7. Flex, as needed, in response to changing conditions. Groups who had the base, industry knowledge, skills, strategies, resources and commitment for a winning capital campaign, faced new challenges in the face of the Great Recession.

The more of these criteria you can say yes to the more realistic are your income expectations. For more about setting realistic expectations see Setting Realistic Expectations About Income. This article is the lead article in this month’s Added Value Newsletter, subscribe today.

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