How do I set destination to outside webroot?

I've had luck using ../ write files outside the webroot, but with the infinite potential server setups your mileage may vary. Try specifying it as an absolute path (eg: /var/www/whatever). Apache will need the ability to write to the folder but it sound like you know what you're doing on those lines.

Is this still an issue? If so please reopen.

I have not found a solution for this yet, Steps:
I have set my webroot to /var/www/example.com/site/
so my drupal installation is in the folder "site"
to make the backup directory outside of the webroot I created a folder:
/var/www/example.com/backup
then I did:
sudo chmod 777 /var/www/example.com/backup
sudo chown -R www-server.www-server /var/www/example.com/backup

and last I added the complete path under
http://example.com/admin/config/media/file-system
/var/www/example.com/backup

the error message: The directory /var/www/example.com/backup does not exist and could not be created.
funny enough I have the tmp directory in the same path under:
/var/www/example.com/tmp
and tmp works as expected. What am I missing? Do I have to set something outside of drupal?

In my case there was an open_basedir restriction in place that blocked access to the directory below webroot except the ones manually opened.

Adding an open basedir directive in my server config helped.
This should be put into the comment warning of the error:

The directory /var/www/example.com/backup does not exist and could not be created. Do you have open_basedir directives added?
or something similar, so that people don't have to search for that error.