Every year, many EDs and Boards look at the budget gap and decides development will close it. They write down a number. No one asks if it’s real. This is magical thinking, they call it budgeting.
Annually, in budget meetings across the nonprofit sector, a number gets written down. It is arrived at by combining last year’s actuals, this year’s expenses, and a gap that needs to be closed. Someone — usually the executive director, sometimes the board finance committee, occasionally a person with a spreadsheet and a great deal of optimism — looks at the gap and says: “development will cover it.”
That number then becomes the fundraising goal.
Notice what didn’t happen. No one asked whether the donor pipeline could support it. No one reviewed retention rates, average gift size, or pipeline capacity. No one asked the development director. The number was constructed entirely from the expense side of the ledger — extracted from a spreadsheet, not from any evidence about what the revenue side could actually produce. It is, in the most precise sense of the term, a number someone made up.
This is magical thinking. It is also remarkably standard practice.
And in smaller organizations — those with one development director, a part-time ED, and a board that approves the budget in a single meeting — it is nearly universal.
The Consultation That Doesn’t Happen
Best practice in nonprofit budgeting is unambiguous on this point: development staff should have meaningful input into fundraising revenue projections before the budget is finalized. This is not a controversial position. It is stated plainly in virtually every nonprofit financial management guide. It is also, in practice, treated as optional.
In practice, especially in organizations with budgets under $2 million, meaningful development input into revenue projections is rare, brief, or nonexistent.
The reasons are understandable if not defensible. Small organizations have informal governance structures. The ED wears multiple hats. The board is stretched thin, if they are engaged at all. And there is a deeply embedded belief — rarely examined, let alone questioned — that the development director’s job is to raise whatever the organization needs, not to define what that amount should be. They are there to execute. The number is not their department.
That belief is the problem. Not the budget process. Not the board structure. Not the economy. That belief.
When leadership sets the revenue target before asking development what’s achievable, they aren’t being ambitious. They’re offloading accountability. The goal travels downstream. Responsibility lands on the person least empowered to change the conditions that determine whether the goal is real. And that person — let’s be clear — will be blamed when it isn’t hit.
A goal without a pipeline is not an ambitious target. It is an unaccountable one.
The Chronicle of Philanthropy reported in late 2025 that the sector experienced a 4.5 percent decline in total donors in 2024 — the fourth consecutive year of donor contraction. The Fundraising Effectiveness Project’s Q1 2025 data shows dollars raised up 3.6 percent while the number of donors fell another 1.3 percent. The sector is raising more money from fewer people. Against that backdrop, setting a growth goal requires not just optimism — it requires a pipeline strong enough to replace accelerating attrition, and then some. Very few organizations have that pipeline. Almost none of them let that fact interrupt the goal-setting conversation.
Boards and the Metric That Flatters
Here is where vanity metrics do their quiet damage.
Roger Craver of The Agitator — who has spent decades diagnosing why fundraising programs fail — defined a vanity metric as data on which you cannot act, data that strokes organizational ego without generating the ‘what should I do differently?’ question. Benchmarking against sector averages. Gross revenue totals. Number of donors on the file. Event attendance counts. Total social media followers.
These are the metrics that show up in board reports. They are legible. They feel like progress. They generate applause in the right moments. And they almost never tell you what you need to know.
Penelope Burk, whose research with more than a quarter-million donors through Cygnus Applied Research remains the most comprehensive available, has documented this gap for decades: organizations track what’s easy to report rather than what drives donor behavior. Her research consistently shows that what actually determines whether a donor gives again — a prompt acknowledgment, a concrete report on what their gift accomplished, the sense of being treated as a person rather than a transaction — almost never appears on a board dashboard. What appears instead is the number.
Instead, boards review total event revenue. They see the gross number from the gala and feel good. What they don’t see: the net after venue, catering, AV, and staff time. They don’t see that the event consumed months of development director bandwidth that could have been spent on stewardship and lapsed donor outreach. And they certainly don’t ask. Because the number on the slide looks like success, and success is a comfortable place to stop asking questions.
Events are not a vanity metric by definition. But measuring only event gross revenue — and presenting that number to a board as evidence of fundraising health — is exactly the kind of data that flatters and misleads in the same breath.
The board sees a number. The development director sees what it cost to produce that number. These are rarely the same conversation.
The metrics that actually matter — donor retention rate, new donor conversion rate, average gift trend, lapsed donor rate, cost to acquire a new donor — require more context to interpret and generate harder questions when they’re bad. Which is precisely why they’re underreported. Hard questions are uncomfortable. Comfortable boards set the same goals next year.
According to FEP data, only 19 percent of first-time donors in 2024 gave again. Nineteen percent. Read that again. The sector is pouring resources into acquisition while losing four out of five new donors before they ever have a chance to become loyal ones. If that number appeared in every board report in America — bolded, on the first page, next to the goal — the conversation about fundraising targets would look very different. It doesn’t. So it doesn’t.
The Development Director as the Designated Failure
Here is what the development director experiences. They inherit a number. Sometimes they were consulted; more often, especially in small organizations, they weren’t. Either way, the number is in the budget, the budget has been approved by a board that will not be in the room when things go sideways, and the fiscal year has started. The development director now owns a target set by people who will face no consequences for having set it.
When they raise concerns — when they point to the pipeline data, the retention trends, the donor relationships that haven’t had enough time or attention to move forward — they are told one of several things. They need to be more ambitious. They need to work harder. That the previous development director managed to hit this number (which is either untrue, unverifiable, or explains precisely why the previous development director is no longer there). Fundraising is just relationship building, and they simply need to build more relationships. Faster. With fewer resources. Starting now.
This is gaslighting. The nonprofit sector has given it better branding, but that’s what it is.
The average tenure of a nonprofit development director is eighteen months. Donor relationships — at every level, from the loyal annual fund contributor to the prospective major donor — take time to build and deepen. The sector systematically replaces relationship managers before those relationships have a chance to mature. The board wonders why the pipeline is always thin. Then they set the same goal again. Then they start interviewing. No one in this sequence appears to notice the pattern. Or if they notice it, they decide that the development director is the variable to change.
In smaller organizations, the problem is compounded into something that would be darkly comic if it weren’t so common. The development director is often also the grant writer, the event coordinator, the donor database manager, and the person who writes the annual report. There is one person — one — assigned an impossible mandate, given inadequate resources, and evaluated on whether they met a goal written before anyone asked what was possible. When they miss it, leadership calls it a performance problem. It is not a performance problem.
The sector has convinced itself that this is a staffing problem. It is a design problem. And the design benefits everyone except the person doing the actual fundraising.
What a Real Goal Actually Looks Like
A real fundraising goal is not the gap between your expenses and your current revenue. That’s a wish. A real goal is the number your pipeline — your actual, documented, evidence-based donor pipeline — can reasonably produce in the coming fiscal year, with appropriate effort, appropriate resources, and appropriate time. The difference between those two numbers is where development directors go to die professionally.
Building a real goal requires four things. Most budget processes skip all of them.
First: a pipeline audit. Before setting a goal, you need to know what is actually in your pipeline — how many prospects, at what stage, with what estimated gift range and likelihood. Your goal is a function of what that pipeline can realistically convert — not your expenses, not your hopes.
Second: a retention baseline. The FEP data is unambiguous — organizations that retain donors at 60 percent or more grow significantly faster than those that don’t. Retention is not a downstream outcome. It is an upstream strategy. If you retained 42 percent of your donors last year, your renewal revenue is roughly 42 percent of last year’s donor count multiplied by the average gift. Before you can plan for growth, you have to plan for replacement. Most organizations do neither. They plan for the number on the whiteboard and call it a strategy.
Third: a capacity analysis. What staff time is actually available for front-line fundraising? Not administrative time, not reporting time, not event coordination — active cultivation and solicitation. A development director who covers grants, events, the annual fund, donor stewardship, and database management simultaneously has, at best, a fraction of their time for the work that actually drives revenue. Retention suffers first — because consistent, personal donor communication is exactly the kind of work that gets deferred when everything else is on fire. The goal assumes a capacity that does not exist.
Fourth: a timeline check. Revenue produced this fiscal year is largely a function of relationships cultivated in a prior one. If your pipeline is thin today, your goal for this year is already constrained — and no amount of activity in January will fix what didn’t happen in March of last year. If it didn’t happen, that’s a leadership and resource question. It was always a leadership and resource question. Someone just decided it was easier to make it yours.
How to Push Back Without Getting Fired
If you are a development director sitting across a table from a board that has handed you a number that isn’t real, first: you are not alone, and you are not wrong. Second: here is what you need. Data, framing, and a counter-proposal.
Data means showing your work. Pull your pipeline report. Pull your retention numbers. Pull your average gift trends and your new donor conversion rate. Lay them on the table — not as a complaint, but as evidence. You are not saying the goal is too hard. You are doing something far more powerful: you are showing what the evidence says. That is your professional obligation. That is what competent people do when they are asked to defend a position. Do it without apology.
Framing means repositioning the conversation. You are not refusing to be ambitious. You are insisting that ambition be grounded in reality — because unreal goals produce one predictable outcome: missed goals, demoralized staff, and a search for a new development director. ‘I want to hit a big number. I want to set us up to actually hit it. Here’s what that requires.’ That is not timidity. That is strategy.
The counter-proposal is where you close the loop. Don’t just push back — offer an alternative. Something like: ‘Based on our current pipeline and retention rate, I can defend a goal of X with confidence. To reach Y, we would need to add Z capacity by this date. Here’s what that investment looks like.’ Give leadership a choice between a realistic goal and an ambitious goal with the investment required to hit it. Force the decision into the open. Make them say yes or no to something specific. Vague encouragement is not a plan. A signed budget line is.
Your job is not to accept a number and quietly fail. Your job is to tell the truth about what’s possible — and document it when the truth is ignored.
Send a follow-up email summarizing the conversation. Note the assumptions you raised and the decisions that were made. Not to be defensive — to be precise. If the goal is set over your objection and it isn’t hit, the record should show what you said and when you said it. That is not insubordination. That is professional integrity — and the only protection available to someone in your position, because the system as currently designed is not protecting you.
For Boards and Executive Directors: What You’re Actually Doing
When you set a fundraising goal without consulting your development staff, without reviewing the pipeline, and without asking what it would actually take to hit the number, you are not setting an ambitious goal. You are writing a performance review that has already been marked unsatisfactory. You have just decided who will be blamed for the outcome. You have not yet told them.
The development director will spend the next 12 months trying to make a number real that never was. They will shortcut cultivation because there isn’t time. They will run the gala because the board expects it, report the gross revenue, and not mention the net — because mentioning the net creates a conversation no one wants to have. They will end the year short of goal, receive feedback that they need to be more strategic, and leave. You will hire someone new, hand them the same number, and wonder why this keeps happening.
This is not bad luck. It is not a talent shortage. It is not a pipeline problem or a sector trend or an unusually difficult year. It is design. And the design has consequences — not for the board members who approved the budget and moved on with their lives, but for the communities that needed fully-funded programs to show up.
If you want a real fundraising program, you need to do three things, and none of them are optional. 1. Include your development director in the budget conversation before the goal is set — not after, not as a courtesy review, before. 2. Ask to see the pipeline and retention data that justify the goal — if you can’t see them, the goal isn’t justified. 3. Fund the capacity — the staff time, the technology, the stewardship infrastructure — that your goal actually requires. Ambition without investment is just pressure.
Stop reporting gross revenue. Start reporting retention rate, new donor conversion, and cost to acquire. When those numbers appear in the board report, the conversation about goals changes — because it has to. Which is where it should have started.
Hope is not a fundraising strategy. I’ve said this for years. Neither is blame. Neither, for that matter, is a number written on a whiteboard by people who will not be in the room when it comes due.