Q: Do you have any models you recommend for forecasting income from individuals to one’s non-profit?

A: This is tough. The amount of revenue you receive from individuals will depend on many factors. Usually, individual gifts from many donors are considered among the most stable revenue sources: even if you lose a few donors, you will probably also gain a few new ones, so each individual is easier to replace than a major foundation or corporate funder.

To get a general sense of your donor base and what to expect in the future, you can look at your donor pyramid (distribution of gifts at different levels). Typically, you will have many gifts at the lower levels, and fewer major donors at the high end of the pyramid. Your goal is always to bring in new donors and upgrade existing donors to give more as their relationship with you is strengthened. If you have good strategies for donor acquisition and donor cultivation, your return from donors is likely to grow over the years as the number of donors increased as well as their commitment. Along with donor levels, monitor donor loyalty (repeat giving). Set a goal to increase donor retention each year.

So, knowing your donor base at a statistical level will help you predict revenues. However, getting to know your donors as individual people will help even more. Once you have a good relationship with a donor, you can ask them about their plans and get a sense of their level of commitment to your organization. You will also know what motivates them and what special projects might be of special interest, so you can tailor your asks. If you have very large donors, it is especially important to talk with them to get a sense of whether you can count on their support next year. If you can’t ask them directly, look at their giving history to your organization. Don’t budget expecting one-time large gifts to automatically repeat!

This year, all bets seem to be off: the recession is affecting some people’s giving levels, and many more are giving the same overall amount, but giving larger gifts to their top causes rather than spreading the money around so much. Given this trend, nonprofits who have failed to build strong relationships will be most negatively impacted.

One additional thing to be thinking about as you set revenue goals: gifts from individuals definitely do not come in evenly through the year. May-June and November-December are traditionally the top months for individual giving. It is not atypical for nonprofits to receive 40% of their donations during the last six weeks of the calendar year. The timing of your revenue will also be affected by the timing of your campaigns: when do you approach major donors, plan your big event or send direct mail? Forecast accordingly.

All this is to say that it is difficult to forecast revenues for individual giving. I wish you the best as you work to make an educated guess!