Why Forecasts Matter More Than Ever
Written by Andrew Sargent
For many charities, investment decisions still sit within guardrails that were set years ago. Breakeven by year 3. Or a 1.5 ROI by year 5. I remember when those rules of thumb worked. I’d regularly see blanket digital acquisition finding new donors for a CPA of £20. But times have changed and how we approach the output of forecasting needs to change too.
The World has Shifted
Recruitment costs are higher. Attrition is different. Campaign performance is less predictable. Supporters are more multi-channel than ever before. So if you’re still holding your investment decisions up against benchmarks from 2015, you risk writing off opportunities that are still worth pursuing.
A good forecast uses the latest evidence: today’s costs, today’s retention patterns, today’s donor journeys. It’s about understanding the reality of now, not the ideals of the past.
Rethinking ROI
Take the classic ROI target: 1.5x after five years. If that now takes six years instead of five but every other channel or product is forecasting to take ten then it’s still a good option. The alternative is worse: doing nothing. And doing nothing leads to one inevitable outcome: your supporter base shrinks, and the problem becomes even harder to solve two years from now.
The Need to Challenge Assumptions
But let’s be clear: not all forecasts are created equal. I’ve lost track of the number of models I’ve seen that magically deliver a fantastic ROI without ever showing the workings. I’m looking at you media buyers. I’m half joking. My point is that not challenging forecasts enough is also dangerous. Especially now, when acquisition isn’t linear. Cold campaigns often contain more warm supporters than people realise. If those dynamics aren’t factored in then the numbers look better than the reality.
What Good Looks Like
A good forecast should:
- Be built on the latest evidence
- Be discussed openly, in the context of today’s climate and your charity’s strategic goals.
- Assumptions should be transparent so you can stress test them.
- It should be flexible to show different scenarios
Forecasts are not there to tell you what you want to hear. They’re there to help you make informed decisions in an uncertain environment.
Explore Further
If you’d like to have a go with our new forecast tool and discuss the outputs with us, we’d be happy to chat. Click on the link below and test some scenarios for yourself