Fundraising Starts With Annual Giving
Many years ago, I began my long career in resource development at the University of Louisville. The reason I took that development position was not to make development a career choice, but to obtain a doctorate. The university development program did not have computerization at first. I was wearing hats in annual, major and planned gifts. I was just out of college and did not know anything about development. I did understand the concept of marketing.
One of my titles was director of annual giving. As director of this program, I contacted several universities of the same size and asked for letters, brochures, plans and any advice I could get my hands on. I went on a road trip to learn what made annual donors tick. I created a manual on how to maintain records and systems for donations even before I learned how to ask for annual gifts.
I received a crash course on donor gift clubs. The primary methods for raising annual funds at that time was through direct mail and telephone appeals. My great takeaway from that annual giving experience was that fundraising starts with annual giving.
A SmartAnnualGiving.com blog provides a definition for smart annual giving that says “annual giving is a strategically planned series of activities designed to establish and nurture a broad base of donor support that will ensure the fulfillment of the organization’s mission.” If you build long-term relationships with donors over time, a steady stream of annual income will be generated. This revenue source will be secured through a variety of annual giving components, staged at different times on the continuum.
NeonCRM has created an annual giving guide for professionals to use. There are important points to consider when studying annual giving.
Why is annual giving important?
- Annual giving revenues covers annual operational expenses.
- Annual giving supplements your other fundraising campaigns and priorities as needed.
- Annual giving is mission versus project focused.
- Increased donor retention through relationship-building with donors.
- Increased donor upgrading over time.
- Goal is to raise funds with no restrictions for maximum flexibility.
- Organizations of all sizes can direct successful annual campaigns.
- Annual giving provides donors with opportunities to give multiple times a year.
- Annual giving should focus on soliciting individual donors.
- Annual giving campaigns require a significant investment of resources.
When you determine how annual giving should break down, an Averill Solutions blog notes the annual fundraising goal should be separated into major giving, mid-range giving and lower level contributions. The formula for annual giving notes that the top 10% of gifts received during an annual campaign provides up to 60% (major giving) required to meet the annual giving goal. The next 20% of gifts (mid-range giving) will make up approximately 20% of the money needed, and the remaining donations (lower-level contributions) cover the rest of the funds needed to achieve the annual giving goal.
Besides funds raised, annual giving programs provide the foundation for building cause recognition, learning about what inspires donors, testing new solicitation and stewardship strategies, boosting your giving retention rate and introducing new supporters to your organization. A Nonprofit Expert article states that an annual giving plan must be donor-focused.
According to the article, a donor database must be created, maintained and improved over time. Research has shown that if an annual donor has already given to the cause, 50% of the time they will give again if asked. That number jumps to 80% if the donor feels their previous contribution was properly acknowledged and appreciated!
An article by CauseVox points out that an annual giving campaign can be powerful as first-time donors become recurring donors. Many recurring donors become major gift and even planned gift donors with proper care and feeding over time. Annual giving campaigns provide fundraising consistency, donor retention and flexibility.
Giving programs under the annual giving program can consist of an array of appeals, such as special events, peer-to-peer fundraising, online giving campaigns, direct mail, emails, social media posts, plus multichannel approaches to communications and solicitations. Organizations must tell amazing stories that define their organization. They need to thank donors and stay in touch with them over time.
A Double the Donation guide emphasizes that your nonprofit will also use a variety of solicitation methods to raise money through an annual fund program that includes direct mail, emails, phone calls, face to face asks, web-based appeals and advertisements. Through annual fundraising programs, donors receive tax deductions, sense of belonging, philanthropic pride and strengthened nonprofit relationships.
To raise annual dollars on a consistent basis, you must set a goal, create a calendar, examine your existing donor base, review your communications program, follow up with donors and constantly track annual giving data. This data should include KPIs, such as average gift size, total number of donations, number of donations made by each donor, donation size growth and number of matched gifts.
To have a consistent annual giving program, organizational boards need to buy into the annual program, financial goals must be achieved, and volunteers must recruit a strategy created for communications. Staff need to segment donors according to giving preference, communication channel, degree of relationship with organization and other factors.
The annual giving campaign is the backbone of nonprofit fundraising. It needs to focus on donor acquisition and retention. To boost your annual campaigns, also seek corporate matching gifts and anonymous matching gifts. Provide opportunities for prospect research and constantly monitor an annual campaigns progress and adjust along the way.
Fundraising starts with annual giving. If you have worked on annual giving programs, you will understand that you are the gatekeeper to an organizational fundraising program. The future success of the total fundraising program depends in part on your success. Educate and motivate your prospects, and make them understand your organization and the importance of annual giving.
Provide continuous opportunities for giving through multiple channels. Embrace solicitation and stewardship techniques. I am so thankful I learned annual giving first. It provided the foundation for my fundraising knowledge. Study an assortment of fundraising pyramids of giving. You will quickly note the foundational structure that begins with an annual base of dedicated donors. Never take this vitally important program for granted.
Duke Haddad, Ed.D., CFRE, is currently associate director of development, director of capital campaigns and director of corporate development for The Salvation Army Indiana Division in Indianapolis. He also serves as president of Duke Haddad and Associates LLC and is a freelance instructor for Nonprofit Web Advisor.
He has been a contributing author to NonProfit PRO since 2008.
He received his doctorate degree from West Virginia University with an emphasis on education administration plus a dissertation on donor characteristics. He received a master’s degree from Marshall University with an emphasis on public administration plus a thesis on annual fund analysis. He secured a bachelor’s degree (cum laude) with an emphasis on marketing/management. He has done post graduate work at the University of Louisville.
Duke has received the Fundraising Executive of the Year Award, from the Association of Fundraising Professionals Indiana Chapter. He also was given the Outstanding West Virginian Award, Kentucky Colonel Award and Sagamore of the Wabash Award from the governors of West Virginia, Kentucky and Indiana, respectively, for his many career contributions in the field of philanthropy. He has maintained a Certified Fund Raising Executive (CFRE) designation for three decades.