Waking Up Your Annual Fund 2009

Waking Up Your Annual Fund

Consultants of Philanthropy ● Fund Raising ● Training

Robert Croft, CFRENovember 12, 2009

AFP Northeast Indiana

Waking Up Your Annual FundRobert Croft, CFRE

AFP Northeast Indiana Chapter

It’s Been the Best Year Ever!



“The 30 Best Careers for 2009”(November 2008)

“Top 15 Jobs with Stress that Pay Badly”(November 2009)

What a Profession!



Today’s Objectives

Move you from CNN to US News & World Report…from Death Valley to Hangin’ 10 on a Ginormous Wave of Annual Fund Success!

Learn 7 “Keys” to annual fund successSee your job as Chief Bucket Manager!Learn how to Analyze your programDiscuss Top Strategies for growing annual

support (in the current economic climate)



Definitions

Annual Giving:

1. An amount given annually.

2. A fund-raising program that generates gift support on an annual basis.

Annual Fund: The total gifts made on a yearly basis to support yearly budgets or general operations. (Sustaining Fund)



Two Common Ways of Annual Giving

Once a year campaign: “Annual Fund Drive” - same time, same request, same amount, same donors, same method

A year-round series of targeted fundraising efforts

What’s Your Approach?



How are You Doing?



How are You Doing?

Tough, But Making ItIt’s Bad, Very Bad!

Breaking Even! Raising More!!!



Just How Bad is It?

Giving USA 2008:– 40% decline in market, 2% drop in overall

charitable giving from 2007– First decline in giving since 1987, only second

decline in giving since 1956– However, giving remained steady as a

percentage of GDP at 2.2% for 2008 vs 2.3% for 2007

– Human Services declined 12.7% (15.9% when adjusted for inflation) YIKES!



Just How Bad Is It?

AFP State of Fundraising– Less than half (46%) of charities raised more

dollars in 2008 than in 2007Typically about 60% see an annual increase

– 14% raised the same amount in 2008– 40% raised Less in 2008 than 2007 – An all time

high!



Martz & Lundy Study – Oct. 2009

Capital and Endowment Giving declined most

Average change in annual fund was 2% decrease

The number of donors on average decreased by 1%



Just How Bad is It?

Unemployment - 10.2% (highest since 1983)Rasmussen Consumer Index (Nov 9, 09)

– Just 21% of adults say personal finances are getting better

– 50% say they are getting worse!Figures have changed little since beginning of 09

– 25% say economy is getting better– 49% say economy is getting worse

Stock Market has rallied since Spring



Just How Bad Is It?

AFP State of Fundraising – OptimismLowest level of optimism in history of survey:

– 28% expected to raise more in 2009– 36% expected to raise less in 2009– 36% expected to raise same in 2009



Waking Up Your Annual Fund Key #1

RIGHT ATTITUDE



Right Attitude



Do you want to stay in the stinky pool?



Bad News, Good News or Who Cares?

Chronicle of Philanthropy – Oct. 29, 2009 “America’s Top Charities Face Tough Fund-Raising Year”

– Top 400 charities’ are anticipating a median decline for 2009 of 9%

– These charities are anticipating a 1-2% INCREASE in giving for 2010.



Mal Warwick - “Is it Time to Panic Yet?”

Can you find the Great Depression on this chart?



Mal Warwick - “Is it Time to Panic Yet?”

Nonprofit Revenue during the decade of the Great Depression



Fight or Flight?

“The strategic and tactical decisions made by charities will have more influence on their fortunes than will the recession itself. Charities have more control than they think they do, as long as they FOCUS on the fundamentals of their programs, do not panic and FOCUS on the long term.” - Advancing Philanthropy, Jan/Feb 2009

AFP Toolkit (member benefit at AFPnet.org)




FOCUS




A GOOD FOUNDATION



Foundations of Strong Annual Funds

Annual Fundraising Plan– Set attainable goals

Case for Support– Clear purpose for fundraising

Regular Donor Communications– Must clearly show how support truly makes a

difference

Volunteer Fundraisers– Volunteers make the best fundraisers!



Keys to Success

Strong Board Support– Including financial

Keeping Records– Donor software program



Why is Annual Support Flat?

In non-recessionary environment, flat or declining annual fundraising is often due to:– Too much emphasis on inefficient methods– Poor donor acquisition, or lack of planning or

budget for acquisition– Poor donor retention– Neglecting to analyze results and adjusting

(usually from “tyranny of the urgent” and being understaffed)



The Development Challenge

The Fundraising “Bucket”– Acquisition– Retention

Nonprofits lose 5 donors for every 6 they obtain - Fundraising Effectiveness Project

– IdentificationMajor GiftsMonthly DonorsPlanned Gifts




Tending the

Bucket



Tending the Bucket

Analyze Your Organization’s Giving Trends

Must have donor software program and USE IT to have meaningful data

Keeping Records a Must



Giving Dynamics Report

GROUP EXERCISE: 3-4 to a group

– What areas are strong?

– What can be improved?

– Remember the bucket?



Approach Report




Know Your Donors



Campaign Analysis Report




Strengthen Weak

Areas



Strengthen Weak Areas

No New Donors? Why? New Donors but high attrition rate? Why?Donors Not Upgrading Support? Why?What can you do in each of these scenarios?




Focus on Effective Strategies



Focus on Effective Strategies



Acquisition vs. Retention (In this economy)

Which do you choose?Which costs more?Martz & Lundy Study: New commitments for all

purposes saw an average decrease of 33%.Retention is King for Growing your annual fund.



Top Strategy #1 – Donor Retention

Renewals, Renewals, Renewals…– Retention (keeping donors in the bucket) should

be your HIGHEST priority!– Retention has larger impact than acquisition

A 10% increase in donor retention can increase the lifetime value of the donor database by up to 200 percent. - IU Center on Philanthropy




How do you Keep Donors?Key Drivers to Building Donor Loyalty:

– Satisfaction– Trust– Commitment




Retention Starts with the First GiftDon’t Over-Solicit

– Penelope Burke – “Donors will give again when they are satisfied their last gift was used the way they intended.”

Communicate regularly and clearlySecure a Renewal




Create a New Donor Process– Welcome Letter or Packet– “Credibility” Letter (within 2 months)– Newsletter or email– “Best ever” renewal package (within 3

months)

Implement a phone “Thank You” program



Top Strategies 2-5

Raise Major Gifts for Annual SupportUpgrade Current, Regular DonorsCreate a Monthly Giving ProgramEngage Donors in Volunteer Activities



Conclusion – 7 Keys to Waking UP

Right AttitudeFocusA Good FoundationTending the BucketKnow Your DonorsStrengthen Weak AreasFocus on Effective Strategies



Wake Up Your Annual Fund, Surf’s Up

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Waking Up Your Annual Fund 2009

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