Annual Giving: A Letter Once a Year Does Not an Annual Appeal Make!

Many organizations describe themselves as having an annual appeal, but upon further investigation, what the annual appeal consists of may be a letter sent to donors or prospective donors once a year. A strong annual giving appeal consists of far more than just an annual direct mail appeal. For most successful organizations, annual giving may include, personal visits with individual major donors, a corporate appeal, a telephone campaign, Internet fundraising and direct mail.  

Many organizations describe themselves as having an annual appeal, but upon further investigation, what the annual appeal consists of may be a letter sent to donors or prospective donors once a year. A strong annual giving appeal consists of far more than just an annual direct mail appeal. For most successful organizations, annual giving may include, personal visits with individual major donors, a corporate appeal, a telephone campaign, Internet fundraising and direct mail.

Annual giving is an important component of any organization's development program for several reasons:

• It is generally unrestricted money and can be used for operating expenses such as salaries;
• It helps build relationships with new and existing donors;
• The methods and techniques used can lay the groundwork for other fundraising efforts such as planned giving and capital campaigns;
• It is the best way to bring donors into the organization for the first time, donors which can be cultivated for major gifts in the future.

The annual giving appeal should be a major focus of the development plan and should attempt to diversify the constituent base and the fundraising methods to be used.

Diversifying Constituents

As most development professionals know, approximately 85% of all contributions in the United States come from individuals, approximately 12 % come from foundations and 6% from corporations and businesses. Therefore, for an organization to be successful, it should focus most of its fundraising efforts on individual giving. However, foundations and corporations should not be ignored as these are also good sources of funding. Foundations, in general, prefer supporting specific programs, so will not be addressed here. Corporate fundraising, however, is often unrestricted and should be also considered as part of the annual giving program.

The annual approach to individuals does not necessarily mean that the organization contacts donors once a year. Some donors respond to direct mail as often as monthly, others will give several times a year if a good case has been made. Major donors may prefer being approached just once a year. It is important to have a plan that outlines who will be contacted, how they will be approached, how often and when.

When planning how each group of prospects will be approached, one good rule of thumb is to look at the 95/5 Rule (or the 90/10 Rule), recognizing that 5% of all donors will generally account for 95% of an organization's donations, (this may be translated as 90% of contributions coming from 10% of donors for some organizations). A little research of the organization's donor records will help establish a plan to contact the top 5-10% of donors in person each year.

Other donors, falling in the majority of 90-95 percent of donors who account for 5-10% of contributions can be approached by mail, telephone, or the Internet. Telephone approaches work best when the organization contacts people who already have a relationship with it — members, existing donors, clients, etc. Others, such as names contributed by staff or board members, names acquired through list brokers, etc, are often best approached by direct mail.

Approaching current donors or friends by phone is almost always more effective than direct mail appeals, because it is more personal. Volunteers or professional telephone fundraising firms can be used effectively for phone appeals, depending on the number of individuals to be called, the purpose of the call, and the availability of volunteers.

Direct mail, likewise, can be done in-house or through a direct mail firm. Again the number of individuals to be approached, the organization's budget, the ability of the organization to prepare and mail the appeal will usually dictate the method to be used.

Internet fundraising is becoming more effective as it becomes more popular. Again, it can be done in-house if the organization has the tools to effectively set up and manage the program. Third party vendors are also available to set up programs, usually with a small percentage of operating costs.

In person calls should be made to that top 5-10% of the donors. Approaching these donors in person is always the most effective way to raise money. Board members and other volunteers are often very effective in making personal calls especially when teamed up with the Executive Director or Chief Development Officer.

Corporate contributors should always be approached n person, unless there is a corporate foundation that handles requests through a grant proposal process. When approaching small businesses or corporations that do not have a foundation, often the decision is made by either a committee or one individual, usually the owner or manager. For this type of approach, volunteers who represent the local business community can be very helpful in planning and implementing a corporate annual appeal.

Each organization should establish a plan to use the most effective methods to reach the broadest base of constituents with the greatest number of staff board and volunteers it has available.

Linda Lysakowski, ACFRE is one of fewer than 100 people worldwide to hold the Advanced Certified Fund Raising Executive distinction. Linda is President/CEO of CAPITAL VENTURE, a fundraising consulting firm with offices in Nevada, Pennsylvania, and New Jersey. Linda has helped more than 100 organizations with their development programs and has trained more than 14,000 professionals in all aspects of development. Hundreds of tools for development professionals may be found on the CAPITAL VENTURE website at www.cvfundraising.com.

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