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Annual Fund 101: Getting Started

Tim Sarrantonio

This is an excerpt from our new eBook: The Fundraiser’s Guide to the Annual Fund. To learn more about starting an annual fund, download the free eBook here.

The annual fund is defined as an organized effort to obtain gifts on a yearly basis to support, at least in part, general operations of a nonprofit organization.

In other words, it’s the foundation of your organization’s fundraising efforts — the building blocks that allow your nonprofit to continue doing the important work that you do!

As the overarching framework of your organization’s fundraising initiatives, the annual fund is also one of the most important revenue streams your nonprofit has. While it doesn’t have the flash of a fancy gala or the concrete goals of a capital campaign, the annual fund is a consistent reminder of the importance of your mission.

Developing a well thought out and multi-year approach to your annual fund will mean more donors and greater flexibility in your day to day work.

Getting started

So what’s the best thing you can do to get your annual fund rolling? Plan it from the end of the campaign to the beginning.

Start with the goals of your annual fund. What do you hope to accomplish with the money raised? Why does it exist in the first place?

Conduct a SWOT (Strengths Weaknesses Opportunities Threats) analysis of your organization’s overarching goals and objectives, including all your major stakeholders:

    • staff
    • board members
    • volunteers
  • folks directly impacted by your work

Try to draw from your own community and create a committee that touches on every stakeholder in your community — not just staff or your board of directors.

Think with longevity in mind and build a base plan that can be repurposed year after year. Start with the year’s goal then break that into quarterly and monthly goals. Work backwards, from the conclusion of the campaign up to the launch.

Once you’ve set your goals and assembled your team, identify the tools and resources you’ll need to effectively roll out the annual fund. Will you be sending thank you acknowledgments with a special header or letterhead? Does your organization have a gift acceptance policy in place? Have you identified the people in your organization who are in charge of the day-to-day work of the annual fund? Make a checklist and identify benchmarks for success.

Finally, write down your plan! And don’t be afraid to make changes — you should revisit it quarterly. Now you’re ready to start the real work.

Creating annual fund campaigns

Your main campaign is where you’ll do all your reporting and primary solicitations for your annual fund, but creating child or sub-campaigns that flow into your main annual fund campaign will help with reporting and segmentation. These can also be considered appeals that are part of the larger annual fund.

You should always approach any campaign — annual fund or otherwise — with multi-channel fundraising in mind. Being able to track where and when donations came in is absolutely critical for success.

Creating child campaigns is an easy way to track this, and will help with donor follow-up, reporting and even next year’s planning!

Showcase your mission

People want to give to your mission. It’s your job to tell them exactly what your donor’s funds will be donations will go toward, so donors can see their impact. You should create a page for this information in a central location on your website.

Branding your giving levels for your annual fund can send a direct message to your supporters about their level of support. Consider creating giving societies to spread stewardship throughout your community. If a person donates at a specific level to your annual fund, why not give them exclusive access to a party at the end of the year to reward them for their gift? You should also create specialized stewardship correspondence based on these giving levels.

Setting up your appeals process and campaign structure is important because it will dictate how you’re going to present your annual fund to your potential donors. During your planning process, think about how sub-campaigns can be used to accomplish your goals and objectives. How will your committee and board of directors request reports detailing where your donations are coming from? How are you publicizing your annual fund? Have you added a fundraising success thermometer to your website?

When all of your materials are ready to go, it’s time for the exciting part — making the ask!





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