Annual Giving

1. Annual Giving Thomas P. Holland, Ph.D. Professor UGA Institute for Nonprofit Organizations

2. Annual Giving • Organized effort to secure gifts on an annual basis, either by mail, telephone, personal solicitation, events, or all four. • The primary fundraising method used to broaden support, upgrade giving levels, and provide operating support for ongoing programs. • The backbone of most fundraising programs. • Complements other forms of giving: planned, capital, endowment. • A cyclical, multi-stage process that may involve several solicitation strategies.

3. Purpose of annual giving • Acquire new donors • Renew donor support annually • Cultivate donors to increase giving levels • Build donor loyalty • Identify and involve leaders • Identify major, capital gift prospects

4. The Gift Pyramid • Rule of thirds: 1/3 of goal will come from top few gifts; the second 1/3 from larger number of mid-range gifts; bottom third from larger number of smaller gifts • Must cultivate smaller donors to make giving a practice and to enlarge gifts in subsequent years • Must know donor capacity and approaches that will produce larger gifts (donor research) • Begin campaign with top prospects (quiet phase)

5. Annual Giving in the Pyramid of Giving • New donors are unlikely to make significant gifts to an organization that is unfamiliar to them. • Annual giving programs build on initial gifts or expressions of donor interest to develop a consistent giving pattern. They represent an essential stage in the giving cycle before a major donor commitment is possible. • Time (3-5 years), energy, work and budget are required to build a broad base of predictable annual donors.

6. Ladder of effectivenessHenry Rosso, Achieving Excellence in Fundraising, Jossey-Bass • Person to person solicitation • Personal letter with phone follow up • Personal phone call with follow-up letter • Personal letter with no follow up • Personal phone call with no follow up • Fundraising benefit (event) • Impersonal letter, direct mail • Door-to-door • Product sales • Impersonal phone call (telemarketing) • Media advertising Most Least

7. Rules of thumb in annual giving • Understand what will motivate your donors or prospective donors before you plan your solicitation strategies. • Carefully match prospects to projects and to solicitation strategies. • Renew the same way you solicited the original gift. • Provide varied giving opportunities during the annual fund cycle. • Provide varied and multiple forms of appreciation during the annual fund cycle. • Track your results carefully to understand your donors’ giving patterns.

8. Telephone solicitation, Phonathons • Works best for renewals or prospects who do not respond to mail • Most effective when combined with a before and after mail campaign • Good way to acquire information on donor base • Good way to involve natural volunteer groups (e.g., parents, alumni, students, former clients) • Good way to involve new volunteers in fundraising • Requires careful planning, training of callers

9. Telephone solicitation set-up • Write a calling script, test it • Obtain donor names, addresses, phone numbers • Be prepared for mail follow-up to pledges • Find a calling site and enough phones • Organize volunteers, board and staff • Train them • Provide a fun and supportive atmosphere for callers • Hold post-mortem to evaluate results

10. Mail Solicitation • Reaches the largest number, but least personal • Effective for renewing current donors, but be prepared to mail more than once • For new prospects, this is the least efficient both in terms of initial gift (1-2% return) and likelihood of renewal. • Requires significant investment of time to start a mail campaign: acquire prospects, develop package, buy postage, plan donor follow-up • Lots of good technical expertise available. • Test your letters, get evaluative feedback, revise.

11. Special events • Pros: will raise visibility for your cause, and involve a certain kind of donor motivated by events. Good way to cultivate new prospects. Good way to socialize your board, volunteers, staff. Can be memorable event and lots of fun! • Cons: Requires huge amounts of time, people, energy. Rate of return may disappoint. Not the best option if you’re only in it for the $$.

12. Special events set-up • Carefully plan budget; analyze goals, profitability. • Find a “niche” – an unusual or unique event – know your “competition”. • Understand your donor base – will they come? • Watch for conflicting events. • Involve experienced volunteers, event planners. • Have contingency plans for everything. • Understand the difficulties in renewing special event gifts. • Understand the tax consequences for donors.

13. Personal Solicitation • Most effective and efficient form of fundraising • Requires training, planning and follow-up • Best way to involve board, other committed volunteers and donors • Requires understanding of volunteer recruitment, management and support needs, including prospect research

14. Personal Solicitation • Preparation: • obtain accurate information about donor/prospect interests, past giving history, capacity. • Determine best person to contact the prospective donor (let volunteers pick their donor prospects) • Offer adequate support, training to solicitor • Presentation: • Match solicitor to prospect • Arrange to visit a prospect in person when possible • Ask for a specific amount • Follow through on any follow-up prospect requests

15. Personal Solicitation (cont.) • The Close • Be positive, not apologetic if prospect declines • Be prepared to negotiate terms of gift • Make careful notes about next steps and follow through with donor • Thank them

16. Example: Small college annual giving plan