Normally, a goal is set with a combination of top-down and bottom-up approaches.
Top-down approaches look at the scale and ambition of the project and the funds required to make a significant difference to the campaign. Bottom-up approaches look at the network, and determine what level of support is likely or possible from it.
Various platforms have different models for the campaign goals. All-or-nothing funding means that when you set a target, you will only receive the funds if you reach that target. Keep-it-all does what it says on the tin - even if you don’t reach the target, you’ll get to keep the pledges.
All-or-nothing models create urgency and a strong motivation for donors to give. As a result, they are significantly more successful, so we recommend using them if possible. However, obviously they come with the risk of absolute failure. Therefore it is usually advisable to set targets at such a level that they are likely / almost guaranteed to be met. We then advise raising additional targets ("stretch goals") as the campaign grows.
When looking at the target amounts to set for “all or nothing” campaigns, our recommendation is to use a combination of bottom-up modelling tools applied to estimated network sizes, as well as top-down project targets. This allows you to to ascertain a range of scenarios for fundraising, and also to highlight the key challenges to achieving your goal.
For a project, try to determine your aspirational targets based on a top-down approach. For example:
Bottom-up approaches normally employ a “money table”, identifying key constituents who could contribute to the campaign, approximate sizes of these bases, conversion rates, and average donation sizes. For example:
Hubbub has developed a crowdfunding simulator, which uses an extended version of the money table to simulate a campaign using a method known as Monte Carlo simulation. It produces reasonably well-bounded estimates of the amounts that can be raised from the existing network using a bottom-up approach.
An analysis of the alignment and overlap between the top-down and bottom-up approaches will inform your choice of appropriate minimums and goals for the project, and will also provide clear guidance for how to position stretch goals.