Hugg’s Monthly Tip: Running ahead to stay in place

Hugg's Monthly Tip

Even in our relatively price-stable times, it’s important to remember that to stay the same as last year, you need to raise more money next year than you did this year. The math is simple… you need to keep up with whatever inflation occurred last year.

Let’s take what you needed to raise in 2013 to keep from falling behind.

In 2012 the Consumer Price Index (CPI) rose 1.7 percent. That’s a handy number to use, but it could be that in your industry, costs went up more (or less).

Taking CPI as our guide, that means that for every hundred dollars you raised in 2012, you needed to raise 1.7 percent more, or a $17 increase for every $1000 you raised, to be “even” in 2013. Not much? If you raise $150,000 in annual fund gifts, that means you need $2,250 more in 2103.

Remember, that’s just from 2012 to 2013. From 2013 to 2014, you need to use $152,250 as your base.  Yes, like bank savings, just to stay even in buying power, your annual fund goal must “compound.” Any less and you suffer “compound erosion” of your ability to carry out your mission.

This can be a pretty depressing thought, especially when your donors aren’t getting wage increases and your staff wants them!

Do you need more dollars? Yes. But how?

For the answer, stay tuned for “How many donors to a dollar?”

Leave a Reply

Your email address will not be published. Required fields are marked *