A Realistic Look at Annual Funds
Social media was effective because it leveraged the attention already purchased in other ways. How will a charity do this advance work that the national election coverage was able to do for Obama? How will it do it in a way that is convertible and effective for the “harvest” tools? The recent tsunami, Haiti and Katrina phenomena pose similar questions — could the organizations the responded to those events have accomplished what they did without the massive support of the traditional media?
Is the glass half-full or half-empty?
The glass really does seem to be half-empty when we look at this second telling of the history of mass solicitation. But maybe there are some pointers toward a new road. For example, over this same history of several decades the profession has also come to appreciate a different truth through the maturation of another fundraising science, the campaign. This truth? It’s that the annual fund is for many organizations no longer about real money. The major- and planned-giving programs are those that focus on real money.
Pareto’s Principle that 80 percent of our outcomes result from 20 percent of our effort (80 percent of the funds from 20 percent of the donors) continues to skew northward, and we now realize that more than 80 percent (much more) of the money comes from fewer than 20 percent (many fewer) of the donors. The truth: Though we thought about it as a fundraising program — and many of us still do, especially our trustee friends — we are now beginning to understand in new ways that annual giving is really more about engagement than about fundraising. It’s more about loyalty, teaching and involvement.
Of course, for many organizations that count on the annual fund to balance the budget, this will seem like heresy. But for the majority of larger, sophisticated fundraising shops, this is a much less controversial proposition. The annual fund is a donorbase-management program, not a fundraising program. Part of the difficulty in thinking about this issue is one of perspective. There was a time when what we now know as “major gifts,” numbers with six, seven and eight figures, were not on the horizon. Most giving for most institutions was essentially “small gifts” as we look in our rearview mirrors today. However, though the annual fund still accounts for the vast majority of donors, it rarely accounts for the lion’s share of the gifts, the money.