It was my first week as a new development manager for a mid-sized, regional nonprofit. I was astonished at what I found.
This well-resourced, highly regarded organization, the envy of other nonprofits in our area, had NO annual fundraising program.
Sure, they faithfully mailed an appeal twice each year, kept meticulous data, and sent out prompt thank-you notes. They threw a ton of lovely events and had grants coming out of their ears.
But they were losing money and didn’t even know it.
Why? They were not managing their donors.
Although this organization was blessed with an effortless, constant flow of new gifts, and a plethora of mid-level, repeat donors, there was zero effort to understand who those donors were or nurture them into higher-level, deeply engaged partners.
There was no thoughtful planning. There was no analysis of what was working, where to focus, or strategy for more effective appeals and campaigns.
Lamentably, this scenario is rampant in the nonprofit world.
Annual fundraising is the neglected, overlooked step-child of development.
Although we know how to run events and we shower attention on donors who send the big checks, our lower and mid-level donors tend to slip through the cracks.
While those smaller gifts don’t generate the excitement of your gala’s net revenue or the $10,000 check from a major donor, smaller gifts are collectively just as important, if not more.
Why are donors of smaller gifts worthy of your time? Because the consistent, deliberate nurturing of these donors year-after-year is the catalyst for future major gifts, capital campaign support, and bequests.
Annual fundraising is the building block of your entire development program.
In addition to generating significant unrestricted funds on its own, a well-run annual fundraising program illuminates which donors are worthy of your time and money.
When you pay attention, you’ll identify the most engaged, most committed, and best prospects for a long-term, high-value partnership in your mission.
So what does a strong annual fundraising program look like? Here are 7 must-have components of an effective annual fundraising program:
1. Develop a written plan specific to annual fundraising.
A strong annual fundraising program must have a system. You need to establish processes and write them down.
Your written, strategic plan should include goals, tactics, timeline, and budget. It will keep you accountable, consistent, and on task.
2. Hire dedicated and knowledgeable annual fundraising staff.
You need someone on your team who knows what they are doing when it comes to annual fundraising, or who makes a consistent effort to learn. This person has been explicitly (if not exclusively) tasked with managing annual giving.
Perhaps this person is an annual giving manager. The duties may fall on a development director or an executive director. In any case, annual fundraising must be a clear priority in their workplan and the person in charge must be knowledgeable.
These tasks are not an afterthought to be undertaken only when and if there’s time.
3. Prioritize donor loyalty and giving history along with gift size.
Usually it’s the big gifts that get all the attention. Without a doubt, cultivating major donors is important. Yet you must also pay attention to and praise donors who give consistently, regardless of gift size.
Cumulatively, these faithful donors may give just as much as a larger donor. With the right cultivation, some will become major donors themselves.
4. Treat all communications and conversations, not just solicitations, as an important part of annual fundraising.
You need to do more than send a few appeals and newsletters each year.
You must nurture donors with interactions that are relevant, personal, and carefully planned in advance.
This means calling your donors to thank them or having your board write hand-written notes on a newsletter. It means sending an unexpected thank-you letter to your multi-year, $25 donors or a “welcome” video to new donors.
It means going above and beyond a typical appeal.
If you have staff who are specifically tasked with communications or marketing, you must integrate and strategically coordinate messages with your annual donors in mind.
5. Listen to your data!
Effective annual fundraising programs use their data to identify and measure responses of important donor segments.
They use their database to track the behavior of those groups such as who is or is not responding to appeals, emails, or invitations.
They constantly test and measure the performance of each activity and adjust their plan based on their data.
6. Integrate annual fundraising into your overall development program.
Annual fundraising can’t operate in a silo.
For example, you’ll want a plan to follow-up with attendees of your event and encourage them to become regular donors.
You’ll want to think about how major donors can best be incorporated into your annual campaign. You’ll need to work closely with special events and major gift managers to make this happen.
7. Invest in tools and services to do the job efficiently.
Without good tools, it’s impossible to run an effective annual fundraising program.
You must have a user-friendly, up-to-date donor database sophisticated enough to manage and track your donors.
You need easy-to-use email software. You need to budget for quality service providers such as printers, designers and mailing services. These will make your job easier and allow you to spend your time fundraising rather than stuffing envelopes.
Does your organization have some work to do to prioritize annual fundraising?
Implementing all of these components is obviously not going to happen overnight. Start small by choosing one or two areas where you can improve.
Try one new tactic to thank your most loyal donors and track their response. Carve out time to evaluate your last appeal, or create an annual fundraising budget if you’ve never done this before.
If you are farther down this road, perhaps it’s time to think about hiring an annual giving manager. Try doing a better job integrating with other development functions.
As for my organization, our entire development team worked very hard to strengthen our annual giving program. After a couple of years, we made great progress.
It’s a good thing we did. Our future depended on it. Yours does too.