Increasing the Annual Fund

When you create your annual budget, there may be a shortfall between what you need to exist and what you currently earn. Organizations handle this differently than you and me. For example, I was recently talking to a client who said the Executive Director, when creating the budget, simply increased the amount the annual fund should raise to cover any projected shortfall. Now, in this organization, the annual fund encompasses events’ revenue and annual appeals. But, in your organization, could you increase your donations by 20% in this economy? You can try.

Don’t discriminate in favor of the big vs. the small.
A $10 gift is worth the effort. Not the same effort that you would use for prospect research or individual meetings, but allocating adequate resources to best sustain or increase these donations is essential. Why?

  1. It costs 4.5 times more to find a new donor than to renew a current donor.
  2. If the recent presidential election has taught us nothing else, we have seen that the power of the many can have a major impact when they band together. Imagine a major university like Boston University for a moment. They have approximately 276,000 alumni for whom they have good mail addresses and a 2007 annual fund achievement of around $7.5 million. If you take the top 500 alumni—less than 2/10 of 1%– and assume they will give $5,000 each. BU would only have to ask the rest of its alumni for $25 each in order to increase their annual fund by 25% this year.

Maybe you don’t have more than a quarter of a million alumni. That’s ok, think about who has been involved in your organization and who is currently involved and start by asking for small gifts.

When you think about your current population, reach for more than 50% participation from a specific segment of your annual fund. There will always be a few people who resist – you all know who they are — but above 50% should be attainable.

How do you choose a segment to target? Consider members who have renewed their support for a second year. Or any participant who joined a committee this year.

This is not to say that 50% will give at a substantial level but start small, then see if you can give them a reason to increase the amount in future years.

Keep in mind that just because they have the money, is not a good enough reason for you to expect that they should give it to you. Perhaps you can find the tie that connects them to the organization and write a story about it in your appeal. Or segment your appeal into four or five groups to send a specific message to each group. What if you sent a card from a current participant?

If you need another reason to strive for increasing participation, here it is; Very few things are as powerful to larger funders as knowing that you have the strong support among your members or constituents.

That’s right. Expanding the number and amount of smaller donations can enhance the larger donations, as well.

Focus wide as well as deep on both large and small and your revenue should increase in no time.