In 2014, the Nonprofit Research Collaborative published a special report about annual funds. The results show a strong positive correlation between an organization having an annual fund and meeting their fundraising goals and retaining donors.
One way to think about an annual fund is to have consistent renewable donations – money that you expect to see year after year or replace with relative ease should a single donor not renew their contribution. Using this model, we’d track revenue from grants and major donors – those who are trickier to replace because of the size of their contribution – separately. We can also think of the annual fund as a “hub” or “anchor” that constitutes the core of a broader development plan.
Annual funds aren’t new, but they’ve been changing in recent years. They’re more than just a yearly mailing. They serve to build and strengthen relationships with donors. For this reason, you should see an annual campaign as a series of activities spread over the year that provide different opportunities to get in touch with past and potential donors and let them know what you’re up to and where you’re going.
Similarly, the annual fund can also be a useful means of identifying individuals who have the capacity to become major donors. So, these two tools work in tandem to move people up the pipeline.
The annual fund is not a silver bullet – nothing is. But an annual fund is more than just a good idea. When it’s combined with an overall strategic, diversified approach to development, it’s bound to serve your organization well.
So maybe it’s time to set up an annual campaign—or improve the one you’ve got.