The Importance of the Annual Fund

Lately, I’ve been getting a lot of calls from organizations who need to raise funds for a project right now.  Most of the amounts are not all that large and if these organization had a donor pool large enough to support this additional funding, it would be a cakewalk to raise it.

But they don’t.

None of the organizations have an ongoing annual fund, and many of them exist solely on earned income, corporate sponsorships, and/or government and private grants.  The problem with those revenue streams is that they are rigid and generally not able to bend and twist to an organization’s immediate and new needs.

Sometimes the nonprofit is newly committed to building a comprehensive fund development program.  This is a great step, and it will help the next time they need to raise serious money rather quickly.  But it probably won’t help for their immediate need.  Most organizations, however, do not want to invest the time or money to build an ongoing fundraising plan. What they want to do is to raise the amount needed and then stop fundraising.  Or they want to build only a major gift program and ignore the annual fund altogether.

“I don’t have any interest in gifts of less than $5,000,” one client tells me, acting as if the largest gift his organization has ever received was more than the $250 it is.  He only wants to cultivate those donors who could give large gifts.

The question of course is not if they could.  The question is if they would.

Not all donors are the same.  Some will be so enthralled with a specific project or program that they will make that occasional larger gift without ever becoming a loyal annual donor who is invested and engaged with the nonprofit.   Most, however, will only give smaller gifts.  Larger donors typically need to be  in your inner circle if they are to give large.  One of the most generous donors I ever worked with told me on more than one occasion that they only gave when they felt as if they were part of the family.  And being part of the family meant giving annually as well as making the occasional major gift.

I know, your board wants you to only ask once, and to promise that this will be the only ask you’ll make.  They are sure this is what their friends and colleagues want.  But the truth is that the more someone gives to your organization, the more likely they are to give another gift.  The best prospect is always an existing donor and it is your job to keep your donors close.

One way to do that is ensure that your annual asks are carefully and thoughtfully segmented so the ask is tied to the donor’s history with you.  A loyal donor should never just be asked for support.  Their past generosity must be noted and appreciated.  Their importance to your successes have to be called out.  Your ask must remind them of how important the organization is to them, and how important they are to the organization.

Dear Important and Wonderful Donor;

Over the past several years your generosity has helped to change lives and provide our clients with so much.  The gift you made last year, helped to ………. And we are asking you again to help make a difference.

And, of course, you cannot only thank them when you want more money.  You must remind them regularly that they are involved with you—and you appreciate that.

And then, when you need those larger gifts, you will have an army of donors who are primed and ready to share their generosity and get you where you need to go.