A Realistic Look at Annual Funds
Last issue we traced a troubling history of a young industry — mass solicitation of philanthropic support. It seems that technology has been a mixed blessing covering a wider and wider territory more and more thinly. We recounted the successive rise and decline of volunteer-based solicitation, direct mail and telemarketing. No one in annual giving, especially those in smaller, more regional institutions, is comfortable with the direction this history seems to be going.
But just as some organizations continue to use volunteers for community campaigns, all will probably continue to use both direct mail and telemarketing into the foreseeable future. Many are experimenting with social media and other Internet- and technology-based mass-solicitation tools. We examined some fundamentals that seem to abbreviate the potential of these tools for most smaller organizations. But, this story is far from finished. Technology is a continual swirl of novelty and insight.
Until the next great mass-solicitation emerges — and everyone is working continually to produce this new marvel — there are some measures that suggest themselves to the prudent annual-fund director. Let’s look at some pragmatic annual-fund management strategies for the way forward:
1. Manage your annual-fund program for loyalty rather than for money. If you succeed at the loyalty, you’ll raise the money. If you manage for money and succeed at it, you’re not assured to also capture the loyalty. Institutional leadership must be educated on this matter.
- The annual fund cannot succeed as a gap-filler. It’s not about the cash, and it can’t just continue to raise more and more money.
- Rather, the annual fund is the pump mechanism on the famous major-gift “pipeline.” It is the intake system and one of the important tools for managing the hydraulics of the pipeline. To focus on the cash increases the risk for driving the management attention away from loyalty. The cash is only the sign — albeit a critical sign — that loyalty is building.
2. Focus first on LYBNTs (Last Year But Not This Year). Start with them on day 1 of your fundraising new year and stay on each of them until that person renews. In the end, we all know that it is much more successful and inexpensive to retain than to acquire. So build a program around the goal of securing maximum growth from minimal acquisition. (Sounds paradoxical, but it’s a very interesting problem to contemplate.)