This is the second article in a two-part series on starting and building annual giving programs. Many of the methods used for annual giving are the same as those used for major gift solicitations, just on a different scale. Development is all about building friendships.
There are a number of reasons why someone might give to your organization once. A memorial or honorarium, a catchy mailer, a cheery bell ringer standing on the corner next to a big red bucket—all of these might inspire an impulse gift. The great question for an annual giving program is: What will convince them to give perennially, year in and year out? Renewing and upgrading donors must become the focus of your energies as you build your annual appeal.
Certainly you want to continue to add new donors to your roles. But acquiring new donors is more difficult, more expensive, and more uncertain than renewing the donors you already have. Your best opportunity for growing your donor base is to grow your organization. Continue to help more people. Continue to recruit volunteers. Ask each new volunteer to suggest the names of friends who might help.
Most importantly, get out of your office. Meet with people in your community and tell them about your organization. Give presentations to local civic groups such as Rotary. Make as many friends as you can. Development is one of the few professions where your main duty is to make friends.
As I mentioned above, the greatest reward comes from renewing and upgrading donors. At least 75% of your income should come from perennial donors. Very few donors will stick with you for decades, but many will renew for several years. For most donors, the first gift they make to your organization will be the largest. Without strategic encouragement, their future gifts will maintain the status quo, but with careful cultivation, a precious few will increase their giving substantially.
Now the question is: What convinced these generous people to upgrade their giving? Probably a few things. First and foremost, repeat donors are invested in your strategic vision, not just in the momentary appeal of a specific issue. Unlike a one-time donor who responds to your Christmas appeal, a repeat donor is in touch with your organization’s basic cause or mission. In addition to being invested, your best donors will be those who are involved. Get them on a committee, ask their opinion, establish an annual appeal steering committee so that they can tell you what strategies work best on themselves and people like them.
A little positive thinking can go a long way in an annual campaign. Once you get them to consider the question from their own point of view, you are halfway home. As those concerned others begin to say to themselves, “How are we going to make this happen?” and “What am I going to do to ensure our success?”—you are on the way to certain success!
Of course the answer to the question “Why does a man give?” has become cliché: because he was asked. It is extremely rare for a person to give more than they were asked to give. If someone gives you $50 this year, ask him or her for $60 (or more) next year. If they give you $1000, ask them for $1100 (or more). If you are asking by way of direct mail, you can accomplish this through a simple spreadsheet formula in your mail merge letter.
It should be obvious when asking for larger gifts, (gifts of $1,000 or more in most organizations) that the prospects should be solicited face-to-face by a friend or dedicated volunteer. You should develop and train an effective and efficient annual giving committee from among your board. They should help solicit the support of their peers around town.
The more money a person gives, the more personal attention they should receive through their cultivation and solicitation. You only have so many opportunities to employ face-to-face solicitations, so make them count. Use them on your best prospects. You can be sure that, if you do not personalize your charity’s message to that prospect, some other organization will. Always follow-up a request with a different form of communication: a hand-written note after a meeting; a phone call after a letter.
Upgrading your annual fund donors also accomplishes the goal of identifying your best prospects for a capital or endowment campaign. Upgrading your annual fund donors from low-level to mid-level giving opens the way to moving them to high-level giving during a capital campaign. These attempts to upgrade your donors will also identify those contributors who are most willing to consider upgrading.
A good prospect for a capital campaign might be asked to contribute many times their annual giving in a capital campaign pledge. The total amount your organization might raise from a capital campaign can be expressed as a mathematical function of your annual giving. A well-directed capital campaign can be expected to raise between three and five times your total annual giving. If this is a meager sum, insufficient to accomplish crucial goals, then some effort toward upgrading your annual fund may be a necessary and worthwhile first step.
A brief note here about the classification of capital campaigns. A true capital or endowment campaign is an effort that becomes the primary institutional priority of your organization. This definition excludes certain appeals often grouped with capital campaigns. In my opinion, “blitz campaigns,” “board campaigns,” and “emergency appeals” are more correctly classified as extensions of your annual giving program than capital campaigns. These “campaigns” can be very useful tools for upgrading donors and increasing awareness of your group’s focus, but they do not approach the all-out effort of a successful capital or endowment campaign.
I have read of fundraising efforts in which the board members alone contributed the entire goal, stretching themselves beyond anything they had ever considered giving to the organization. After working so hard in the board phase, they stopped the campaign before soliciting other constituents. Perhaps that was all that was needed to achieve the group’s goals. From my standpoint, however, it seems as if some good synergy was lost.
If the board is that impassioned and dedicated, why not harness that energy and declare success in the first phase of a full capital campaign? Declare the minimum goal surpassed and start working hard to achieve a larger challenge goal. Capital and endowment campaigns are risky endeavors, but when you know you have achieved that rare blend of sacrifice and enthusiasm, don’t pull the brake on that train until you have ridden it as far as it will go!
A successful campaign is a rich blend of internal enthusiasm expressed through the unanimous and generous support of the board, which then manifests itself by leveraging complete community support. The best annual campaigns pave the way for capital campaigns to follow. They instill the need for broad-based giving by the board and all your constituents. Well-run annual campaigns breed the leadership needed to execute meaningful capital campaigns.
Custom Development Solutions, Inc. (CDS) is one of the most sought after fundraising consulting firms specializing in the strategic planning and tactical execution of capital campaigns for non-profits throughout the United States and Canada. If you have a fundraising question, please call CDS at 800-761-3833 or send an email to email@example.com.