The Problem With the Annual Appeal
I have no idea how it got started, and maybe someone reading this can explain it to me.
It’s the annual appeal. A concept that is so outdated and impractical that I wonder why anyone who really thinks about it would continue to use it. OK, it does have some benefits—but listen to what I have to say about it and see if you agree.
The annual appeal concept is one that holds to the idea that donors give one time, once a year, hence the words “annual gift” or the question, “Has the donor made their annual gift yet?”
Fundraising programs built on this philosophy look to secure that one gift once a year, and then the work is finished. This is so interesting to me!
There are several things wrong with this concept:
1. It places the donor into a one-time event mentality versus an ongoing relationship. Oh, I know, there will be a lot of ongoing communication, but the actual transaction has the donor thinking “it’s that time of year again,” versus thinking and feeling that tackling “this situation I am giving to” is an ongoing, year-round relationship. This is subtle, I know, but Jeff and I believe there is a material difference in the two approaches.
2. It focuses the donor on himself or herself versus the cause. You might want to argue this point, but hear me out. The annual-gift approach focuses everything on a specific time and what the donor is going to do or not do, versus the non-stop dynamics of meeting a need.
3. It motivates the MGO to check on giving less frequently, which means there is lost communication and contact opportunity. Believe me, when all the MGO is looking for is that annual gift, the frequency and quality of ongoing communication goes down.
4. It substantially suppresses the giving of the donor. Whoa! How does that work? Well, again, this is subtle but true. If the communication strategy to a donor is leading up to one annual gift, the amount of that gift will be lower than if the donor had been approached multiple times for multiple gifts. Many donor files of progressive nonprofits have donors that give anywhere, on average, from 2.3 to 15 times a year. Granted the range of most frequent giving is about three to five times a year. The total cumulative giving from this donor versus the one-time donor is, on average, higher. So the annual approach is actually losing money and the opportunity to relate more frequently to the donor, which is also a benefit.
Think about this another way. Most everything we do financially is done on a monthly basis, if not more frequently.
- We pay bills on a monthly basis.
- We get paid on a monthly or bi-weekly basis.
- Certain faith practice has people tithing every month.
- We think about events and transactions on a monthly basis.
Since this is true, why would you have a relationship that is based on an annual transaction? I really don’t know, but it is a practice that is out there and trying to work for some.
While it is true that some donors prefer to give once a year, Jeff and I suggest you think about them and treat them with a minimum of a monthly touch, so that the cadence of the relationship is frequent and the nature of the relationship is warm and intimate.
Remember, major gifts is not about the money—it is about a partnership with a donor to see that good is done in our world. This truth requires that you be in touch regularly, and that your focus be on the relationship and the cause versus the transaction.
I have bolded that last phrase because this is what your objective should be—building a relationship around the cause. This is a full-time, year-round job, not an annual event. This is about taking care of a need, not securing a transaction.
So, if you are in that annual-giving mode, consider moving out of it. I think it will increase your revenue and, more importantly, change how you relate to donors.
If you’re hanging with Richard it won’t be long before you’ll be laughing.
He always finds something funny in everything. But when the conversation is about people, their money and giving, you’ll find a deeply caring counselor who helps donors fulfill their passions and interests. Richard believes that successful major-gift fundraising is not fundamentally about securing revenue for good causes. Instead it is about helping donors express who they are through their giving. The Connections blog will provide practical information on how to do this successfully. Richard has more than 30 years of nonprofit leadership and fundraising experience, and is founding partner of the Veritus Group.