At many non-profits, the annual giving program (also known as “the annual fund,” “annual fundraising,” or even “annual fund fundraising”) is kind of like the background radiation of the development program. It’s there. It’s important. But it’s boring, compared to major gifts, capital campaigns, endowments, and other transformational giving opportunities. This is the wrong way to think about annual giving.
Your annual giving program is a springboard for the rest of your development program. Strong annual giving leads to more success in all aspects of your fundraising. In this article, we’re going to take a look at the three big picture goals for your annual giving program… and why they matter.
What is Annual Giving?
Before we talk about the goals, let’s define annual giving. Your annual giving program is your baseline development program, seeking small and mid-sized gifts from a variety of sources. These sources differ by non-profit, but often include direct mail, online giving, email solicitations, monthly giving, telemarketing, and social media. At many organizations, event revenue is also considered “annual giving.”
Annual fund fundraising generally does not include major gifts, endowments, capital campaigns, or planned giving.
Why Does Annual Giving Matter?
Your annual fundraising is the foundation for your entire development program. As noted above, there are three big picture goals you should have for your annual fund program:
#1: Providing Predictable, Flexible Revenue Streams
Your annual fundraising should provide a base of predictable and flexible revenue streams for your non-profit. This revenue is predictable because it comes from small and mid-sized donors (not relying on a small group of major givers) and is generated through fundraising channels (like direct mail and annual events) that are knowable, testable, and recur every year.
Likewise, your annual giving revenue should be flexible, meaning that the majority of the money you raise through these strategies should be for general operating expenses (unrestricted funds) rather than restricted giving.
#2: Building Your Donor Base
Another key goal for your annual fund fundraising is building your overall donor universe. Through direct mail prospecting, online direct response outreach, events, social media fundraising, and more, you should be bringing in a steady stream of new small and mid-sized donors for your organization.
A strong annual giving program provides an excellent entry point for your fundraising funnel and keeps your donor database healthy, growing, and well-cultivated.
#3: Delivering New Prospects for Major Gifts
Third, your annual fund program should deliver a stream of new prospects for major gifts, planned giving, endowment campaigns, and other transformational giving. Ideally, every new donor that comes in through annual giving should be wealth-screened, and if appropriate, added to a mid-level giving program or major gifts caseload. At most of the country’s most prominent non-profits, the annual fund program is the single most significant driver of prospects to the major gifts team.
Don’t Just Do What You Have Always Done!
When it comes to your annual fund program, don’t just do what you have always done! Take some time to analyze your program through the lens of these three goals. How well is your current strategy providing predictable revenue, building your donor base, and delivering new major donor prospects? If you’re not happy with the answer, now is the time to focus on refining your tactics to strengthen annual giving at your organization.
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