Money (That’s What I Want) — Pt. 1

“Your love gives me such a thrill…but your love don’t pay my bills. I need money…” ~ Barrett Strong, “Money (That’s What I Want)”, 1960.

OK….can we please be honest with each other? We need to stop pretending that nonprofits can run on passion alone. Seriously. Let’s talk a little about the foundation of any successful nonprofit organization. Yep, the money part. It’s called the annual fund.

We have all been on the receiving end of at least one annual fund solicitation…from our alma mater, our church, or maybe our favorite charitable cause. We know when it will arrive, and we know what it’s all about…donations, of course!

Better known as a year end campaign, this outreach usually takes the form of a letter in the mail, received right before the December holiday season. The letter will usually tell a compelling success story and/or talk about a significant need. And it will always implore you to make a year-end gift to the organization.

Some might assume these letters aren’t useful in the grand scheme of running a nonprofit organization. Some might wonder about the ROI of mailing out a bunch of letters, only to receive a fraction of responses and gifts in return. One might ask if this time would be better spent pursuing that next big grant opportunity.

But, no matter how insignificant it might seem, a year-end campaign mailing is a component of the most important fundraising mechanism in any nonprofit.

An annual fund is the money that nonprofits raise throughout the year to help sustain day-to-day functions. Annual fund contributions are generally small in dollar amount, but the goal in the annual fund is to secure many of these contributions and retain these donors year after year. If managed well, an annual fund program can lead to ongoing, sustained funding, deeper donor relationships, and a pipeline for major and planned gifts down the road.

A solid annual fund program has a few main components that I’ll lay out and discuss in Pt. 2 later this week. But the point I’m making today is that the importance of annual giving should not be discounted for the long-term sustainability of any nonprofit organization. And while it’s not all about the money, annual giving is all about building your organization’s brand, creating awareness and establishing lasting donor relationships.

To be continued!

P.S.: Friends! If you’re interested, register and join me for a virtual chat about this and other nonprofit management issues on Thursday, January 14 at 4pm PST. Link here!

Photo by Karolina Grabowska from Pexels