Well just when you thought the year 2020 could not get any stranger we had to go and have a Presidential Election! If you are like me, I am sure you cannot wait until this strange year is over. This brings me to a special offer The Huddleston Group would like to offer organizations, like yours, beginning in 2021, see the link below for more details, but hurry time is limited. Also, in our last issue “Planned Giving in A Small Shop”, we provided a link to a number of documents that would allow an organization to start and run a planned giving program for the first couple of years, those documents will only be available until December 5th. We provided the link below for your convenience.
This month we are going to talk about the lifeblood of any nonprofit fundraising program, Annual Giving. Annual Giving is the financial support that keeps the institution strong. By definition, these are donations made to a college that is utilized in the same year the gift is made. Annual giving is not one annual appeal. It is also not just a year-end campaign. While these are important components of annual giving, they are just components – an important distinction. Annual giving, when planned and executed strategically, is the primary source of future major gifts, capital support, and personal bequests – the very gifts that enable your organization to fulfill its mission. Enjoy
It All Starts with Annual Giving…
An annual fund or annual appeal is the backbone of many successful nonprofit fundraising programs. The term “annual” obviously denotes the frequency of the appeal, but today, “recurring” solicitation is probably more accurate. This is because a year may be too long to wait to communicate needs to donors and ask for financial support.
The effect of an annual or recurring fund is that it establishes long-term relationships with donors and the organization. As donors become regular respondents to recurring solicitations, they become invested in the organization, and the stewardship of these donors can yield great dividends in the future. Reviewing a history of donations can reveal certain giving patterns and clues to what is important to particular donors. These patterns of behavior can be monitored and used to target marketing materials in order to match a donor’s interest and ability precisely.
So the elements of your organization’s annual giving plan of action should include the following:
- Segmentation and evaluation of potential donor groups;
- Cultivation and recognition system to guide and track relationships with prospects and donors;
- Refinement of elements for case materials;
- Identification of cultivation strategies and techniques for enhancing solicitations;
- Development of calendar, task, and volunteer & staff job descriptions; and
- Delineation of the infrastructure to enhance annual fund initiatives.
In order to have a successful annual fund appeal or any successful fundraising program for your organization, you must understand the organization’s culture of philanthropy. One of the most intangible and yet most visible characteristics of any nonprofit institution is its culture of philanthropy. Culture is the composite of thought, word, and action that expresses the fundamental values of any human community. Through observation, listening, and reflection, donors can identify an organization’s attitude toward philanthropy.
In high-performing nonprofit organizations, the culture of philanthropy is expressed in the following manner:
- Consistent fundraising results;
- Broad involvement of volunteers and staff in the identification, evaluation, cultivation, solicitation, and stewarding of donors;
- Language that clearly and unequivocally expresses fundraising as a positive, integral value;
- Clear understanding that fundraising is one of the most important roles for leaders – both administrative and volunteer;
- Institutional fundraising goals that are “owned” by both staff and volunteers;
- A vocabulary which highlights the nobility of giving and the basic human dignity of those solicited; and
- Expressions of fun, humor, and excitement surrounding the fundraising enterprise.
In fundraising, an organization’s culture of philanthropy is expressed in countless ways. Some expressions involve the subtleties of the language used in a solicitation call, while others involve the practices of stewardship and donor recognition. The culture of philanthropy is also expressed in fundraising literature, volunteer involvement, the casual conversation of development staff, and the experience of donors.
People give to people. Often, contributions are given because of how one person feels about another. People also give for people. Effectively communicating how a financial contribution can change a life or make the world a better and more just and caring place can often impact to whom, how much, and when contributions are given.
The annual fund is the cornerstone of a well-planned development program. Once established, it should never be suspended. If continuity is broken, it is difficult to rebuild the momentum. The annual fund program not only produces a steady flow of unrestricted and designated support but also lays the foundation and cultivates donors for major, capital, and endowment gifts in the future. Many major gift donors will initially come to be involved with your organization through annual giving.
The annual fund should be used to help foster and establish a culture of philanthropy that is donor and relationship-centered.
The purpose of the annual fund is to
- raise funds to support the greatest areas of need;
- increase awareness of your organization within the local and broader communities;
- identify major gift prospects; and
- cultivate future leadership for your non-profit.
The principles for the success of the annual fund are
- a well-defined need and purpose;
- an efficient and trained organization;
- realistic benchmarks and goals;
- well-planned action steps and a well-planned timetable;
- a logical order for upgrading donors through planned solicitation techniques;
- recognition and appreciation appropriate to the level of the gift; and
- a sequence for the addition of new volunteer committees and new constituencies.
In order to reach out and make a solicitation for support, you have to have names. Where do these names come from? List brokers exist who can sell you just about any information you could want, but I believe it is worthwhile to build your own lists no matter how difficult this may seem.
Building your own list of potential donors forces you to get involved with all sorts of people and build connections with those who ultimately support the organization. Start with your own name; add 10 or 20 of your friends and family members or those who will make a gift because they have a relationship with you. Have other organization leaders do the same with 10 or 20 of their family members and friends. Not everyone will donate, and some may do so grudgingly, but a few will not only give but will also become interested in the work of your organization. These people are key donors because they are the next step toward an additional 10 or 20 people. As new donors become interested in doing more than just making financial gifts, continue to ask each other to invite others to join them in their support.
Let’s do some math. Say you have 5 key organization leaders. Each solicits 20 people and 12 of 20 make a gift. Just 2 of these 12 donors decide to invite 20 more people to participate, and they experience the same level of success. From just the work of the 5 organizations’ leaders in the first appeal for funds, you have received 60 donations and now have 60 names on the list. Since 10 additional people from this group ask their friends and family to get involved in the next appeal, their work will add another 120 donors. Of these donors, 20 agree to contact their family members and friends for the third appeal, and they add 240 more donors. In just three solicitations, five people have developed 420 donors, 70 of which are actively recruiting more people to help.
The quality of these donors is good due to the fact that they were all personally solicited by someone with whom they had a relationship. Some people may scoff at this approach as simplistic, but fundraising is a business of relationships. When an organization is just getting started, you have to count on personal relationships rather than counting on people who believe in your cause to step forward on their own. People don’t give to causes. People give to other people in support of causes. Generally speaking, if there is no relationship, there is no donation.
Once you obtain donors, never let them go. The first gift is the hardest to obtain, and it is far easier to increase the current donor’s level of giving. Take the time to leave a personal note of appreciation, even if it’s just handwritten on the bottom of a form letter. Let donors feel that their gift is essential. As the organization grows, personal relationships tend to shrink, so be certain to segment donors into manageable groups and assign someone the task of maintaining good relationships.
Remember the formula for a successful annual giving program boils down to two things that will increase your success:
- Increase the number of people giving.
- Increase the average level of support.
You need to do both! In order to increase your annual-giving success, you need to expand your pyramid!
My thought before closing is to remember the words of Si Seymour:
“The vineyards of philanthropy are pleasant places, and I would hope good men and women will be drawn there. Most of all, I would hope it will be better understood that if these vineyards are to thrive and bear their best fruit, they must always have first-class attention.”
Harold J. “Si” Seymour, Designs for Fundraising
The Huddleston Group is a full-service management, consulting, and training firm specializing in philanthropy (i.e., campaign counsel, audits, feasibility studies, and creating a culture of philanthropy), opinion research (i.e., donor satisfaction surveys, focus groups, and marketing research), and organizational management (i.e., board transformation, strategic planning, and capacity building).
Visit us at www.thehuddlestongroup.com for free newsletters, a blog post, and videos.
Huddleston Group Special Offer (click here)
Good Luck!
Ron Huddleston, FAHP, CFRE
President & Founder
