Annual Giving

Many local nonprofits indicate that they do not conduct an annual giving campaign or a concerted major gifts effort.  If they do work on annual giving, it usually takes the form of a direct mail or email campaign.  Although a drive such as that might check a box on a staff member’s fundraising to-do list, it is not likely to produce significant results or connections to donors that can be built upon in the future.

Fundraising campaigns are strongest when built upon relationships and face to face efforts, and they should align and strategize with other nonprofit engagement efforts.  In other words, they should integrate with the other ways a nonprofit is communicating with and reaching out to its constituency.

This was the fundamental message from Erik Daubert, MBA, ACFRE, and AFP Master Trainer who conducted a daylong workshop for the Greenville Partnership for Philanthropy and Piedmont Chapter of the Association of Fundraising Professionals.  More than 100 staff and volunteers from local nonprofits were in attendance.

Annual campaigns are where nonprofit staff and volunteers learn how to fundraise – they won’t be perfect, but the financial results will be better than what you had before without the focus.

Annual campaigns have a purpose beyond the funds they generate.  They are a way to field test staff, board members, and other volunteers to teach them the ropes of participating in fundraising. Campaigns help to move people from just being consumers of nonprofit services to co-owners in bringing the mission to life through work and action. They engage more voices and storytellers in the work you do.  They build a foundation upon which you can move to major gifts and capital campaigns; these large efforts are far more likely to succeed if you have a strong annual giving platform.

Developing the case for support

Giving should ideally be centered around a case for support – telling your organization’s story. What is the need you fill? Erik cautioned attendees to NOT think about your need as a nonprofit organization (“We need a new HVAC system next year” or “we need to pay these wonderful staff members”).  People don’t give TO nonprofit organizations; they give THROUGH nonprofit organizations to address issues in the community or make lives better.  Talk about the end in mind: what difference are you making in your community?

Your case for support should then be illustrated in stories of the impact you’ve made.  These stories are best generated through board members and volunteers and are a great way to engage them in the work.  Once you have some great stories that touch on different aspects of the work you do in making the world a better place, they can be deployed in making calls to potential donors.

The stories can then be deployed during donor visits.  Erik urges anyone on a visit with a donor to do more listening than talking.  Listen for their passions, their interests, their connections to the organization.  Then consider telling one of the stories that best aligns with the donor’s motivations and interests.

The dynamics of a donor visit and sharing the case and story are one reason that staff and volunteer partnerships in fundraising are so beneficial. Volunteers can bring passion and credibility to share the stories, and staff have the numbers and details – especially for larger gifts and bigger donors.  Two people can listen more carefully and respond more appropriately.  Board members can be powerful amplifiers of the work – or serve as ambassadors and advocates; unless the nonprofit has no staff, the organizing and directing of the fundraising is typically a staff role.  It is important to remember that not every board member should be expected to be good at donor calls.  Erik said that typically just 25-30% of board members have the gift of being great stortytellers .  But all can help with thanking donors, giving tours, identifying prospects and the like.

Identifying prospects

How should a nonprofit identify prospects?  Erik says your constituency is the best place to look for contributed support. Nonprofits often say “we should contact Oprah – she gives a lot!” But unless you know Oprah, you’re barking up the wrong tree.  Your next new donor is quite likely already in your circle, and your next major donor is already a smaller donor.

To illustrate this point, Erik pointed to Hank Rosso’s concentric circles constituency model, which says that those closest to the organization – board members, management staff, and current major donors – are those most likely to give the next gift.  This is followed by the next circle of the nonprofit’s members, employees, volunteers, clients, and general donors.  Former participants and former board members are another step removed, followed by people with similar interests and the general universe of anyone aware of the nonprofit.  This highlights why a mass mailing to anyone who has encountered your organization would not be the most effective way to target annual giving. Start with those closest to your work.

Components to annual campaigns

Kicking off an annual giving effort is easier than one might think.  Once you’ve identified your case for support and have five or six stories handy to illustrate your impact, Erik recommends you proceed in the following order:

  • Start with your staff.  This is a good place to learn and kick the tires on annual fundraising.  Your staff know best what you do and can give you honest feedback on your approach.  This also ensures that they understand the campaign you are engaging in so they are in the loop if any clients or members have questions.  Some nonprofits might question the appropriateness of asking staff who may have pay lower than the private sector and who already “give” so much.  Erik’s reply is that philanthropy is about JOYFUL giving – we never want to twist anyone’s arm.  We just want to provide them the opportunity to give and should position the request as such.
  • Board members are like family and are the next step in your giving campaign.  They, too, can give honest feedback, and by practicing an ask on a friendly peer, it cultivates the skill to do so with other friends of the organization.  Erik believes there shouldn’t be a minimum giving requirement for board members; not only does it inhibit the diversity of board members you’ll end up with, but it also ends up creating a ceiling for giving, rather than a floor, and people will end up giving less than if it were more open ended.
  • Major gifts most often follow the board member phase.  Who is already giving to your organization who could be inspired or connected to increase their support?  You can imagine how just a few of these successful calls can increase the support of your organization far more significantly than an annual giving mailer.  This also strengthens connections between your donors and your organization.  What defines a major gift varies by organization – in one, it could be $1,000 and in another it might be $1,000,000.
  • Community gifts comprise the final phase of a typical annual giving effort.  Erik calls this “the Wild West of annual campaigning.”  Following the concentric circles, the community efforts include involving and asking current and former volunteers, beneficiaries, and members who are often not even current donors.  Some nonprofits are reluctant to ask volunteers and clients for financial support because they already give with their time or because they have needs that connect them to us.  But Erik points out volunteers are often a top source of donations.  And no one understands the impact of your work better than volunteers and clients, who are often eager to give back.

Campaign structure

Fundraising campaigns benefit from structure, and Erik recommends the following – and in this order:

  • Recruit top leadership.  Each part of the campaign – staff, board, major gifts, and community giving – should have a chair person.  These individuals should have as many traits that will lead to success as possible – enthusiasm, accountability, integrity, and having made a gift themselves.  This person is NOT the organization’s CEO and often not even board chair.  For the staff portion of the campaign, for example, it could be the front desk person whom everyone knows and loves.
  • Recruit other leaders.  Erik strongly believes in a rule of fours for all campaign work: each chair should have no more than four leaders who report to her, and each of those leaders should have no more than four people who report to them. This pyramid structure can be as large as needed for the size of the organization’s staff, board, major donors, etc.  Even if a volunteer insists that she can take on more, start with four so she can have definite completion with those first important four people.
  • Recruit followers – the storytellers and campaigners who help to make the calls.

So, really, launching a fundraising campaign is two campaigns in one – first, a campaign for people followed by a campaign for money.  Erik said it is not uncommon In his experience for volunteer giving to go up 30-40% in the first year of a campaign being organized more intentionally around more intentional asking to support the mission of the nonprofit.

Success in annual campaigns – JUST DO IT!

Erik emphasizes that although this might be new and uncomfortable for some nonprofits, it almost always produces greater results than things like direct mail, online solicitations, or special events.  Research shows time and again that the biggest returns are found from the right person asking the right person for the right project at the right time in the right way for the right amount.

Other than following the steps of staff, board, major gifts, and community gifts, the structure of chair, leaders, and followers in the rule of four, and identifying a compelling case statement with stories to accompany it, there’s no perfect way to start a campaign.  It is a low-risk way to build fundraising muscle (as Erik pointed out, better to mess up on a call for $100 than for a later call for $1,000,000).  Erik urged nonprofits to jump in the pool and learn!  For more information on how to do an annual campaign, check out Erik’s book The Annual Campaign which can be found on Amazon.


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