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Picture this: you’ve just hosted your nonprofit’s big annual fundraising gala. Your staff has put so much work into making the event happen, and you’ve raised a ton of money for your cause.
However, you take a look at your organization’s finances and realize you don’t have enough funds leftover to adequately pay your nonprofit’s employees for their hard work and dedication.
While most of your time and budget should go toward your beneficiaries, it’s also necessary to set aside some funds for operational expenses such as employee salaries and office maintenance. That’s where your annual fund comes in.
When you develop an annual fundraising plan ahead of time, you ensure that you have enough money to cover operational expenses. That way, you can focus your time on more mission-critical initiatives.
Designing a nonprofit annual fundraising plan isn’t just another fundraising trend. It’s essential to dedicate team time to your plan near the end of each year so you can give your fundraising a boost in the new year. In this guide, we’ll walk you through best practices so you can develop a strong annual fundraising plan. Let’s get started!
Your Annual Fund: A Quick Look
Your annual fund contains unrestricted funds your nonprofit raises throughout the year. It’s used to cover daily operational costs, like keeping the lights on and paying your employees..
Just like your nonprofit gets ready for each season with new fundraising ideas, you have to prepare for your annual campaign. Beginning the planning process in the last quarter of the prior year will set you up for success when it’s time for your annual fundraising to start.
Then, you’ll raise money throughout the year with annual giving campaigns. Not only do these campaigns serve to add to your annual fund, but they’re also a great way to build relationships with donors.
1. Conduct prospect research.
The first step in planning your annual fundraising is to conduct prospect research. Since major gifts help you build up your annual fund more efficiently, it’s important to identify those who are in a position to give these large gifts.
Prospect research allows you to discover which donors have both the willingness and resources to donate major gifts to your annual campaign at this time. Then, you can focus your outreach on these prospects instead of wasting resources on those who may not currently be interested in giving.
To determine which donors may be inclined to give major gifts, take a look at your donor database for your donors’:
Previous giving and engagement history
Personal background information, such as values, interests, or hobbies
Wealth indicators, such as previous donation amounts or assets
Other philanthropic ties, such as volunteering or serving on a nonprofit board
To speed up the prospect research process, DonorSearch recommends using artificial intelligence (AI). AI can process and analyze data efficiently, allowing you to quickly incorporate its insights and predictions about individual prospects into your annual fundraising plan and spend more time on other aspects of the planning process.
2. Develop a calendar.
Creating an annual fundraising calendar will allow you to keep track of all the fundraising efforts you’ll implement in the coming year. That way, you can plan ahead and ensure you have enough staff and resources to allocate to each initiative.
It’s also helpful to visualize your annual campaign in a calendar format so you can get a quick overview of the entire year’s fundraising plan at a glance.
When creating your annual fundraising calendar, remember to include:
Campaign start and end dates
Fundraising event dates
Timeframes for specific goals and initiatives
Tax deadlines and other important administrative dates
It’s also important to mark down holidays or other specific initiatives that you could take advantage of in your fundraising strategy. For example, healthcare organizations may want to align their fundraising efforts with National Health Observances (NHOs), as outlined by the U.S. Department of Health and Human Services.
3. Focus on deepening relationships with donors.
Besides raising money for your organization, your annual campaign should also be aimed at deepening your relationships with donors. When you get to know your donors and personalize your asks, you help them form stronger connections to your nonprofit and encourage them to give back to your cause.
Take a look at these ways to increase your nonprofit’s funding and strengthen your relationships with donors at the same time:
Offer a variety of ways to give. Giving donors a variety of ways to give can increase campaign engagement. When requesting donations, offer multiple giving levels so donors have an idea of how much people typically contribute to your organization. You can also accept pledged donations so donors who don’t currently have the capacity to give can contribute in the future.
Start a membership program. If you have the time and resources to do so, consider starting a membership program to encourage recurring giving. These programs also create a sense of community among members and make supporting your organization more engaging with fun membership perks and events.
Promote matching gifts. Many donors don’t know that their employer will match their donations to their nonprofit of choice or how to go about the matching gift process. When you use matching gift software, it’s easy for donors to identify if their gift is eligible for matching and jumpstart the process. That way, you earn more for your cause, and donors feel good about making a larger impact on your organization, especially major donors who will see their generous gifts double in size.
Create multiple engagement opportunities. In addition to donating, there are so many other ways for people to support your organization. Encourage people interested in your mission to get involved by volunteering, attending a fundraising event, signing a petition, participating in a peer-to-peer fundraising campaign, or registering for your email newsletter.
Above all, it’s important to thank your donors for their contributions so they know you appreciate them. NXUnite’s guide to donor relations explains that even small gestures of appreciation can help you strengthen your donor relationships.
4. Track your progress along the way.
Lastly, track your progress to determine where you’ve had campaign success and where you can improve. Start off by choosing key performance indicators (KPIs) that align with your fundraising goals, such as cost per dollar raised or donor acquisition cost.
You can keep track of these KPIs by consistently checking your donor database and using website analytics tools such as Google Analytics. Review these metrics on a regular basis so you can adapt your campaigns as needed. If you don’t have a sufficient amount of data collected yet, you can always look back at past campaigns and determine areas for improvement.
When you back up your annual fundraising campaign decisions with data, you can create better, more effective campaigns that allow you to increase donor retention and raise more for your cause. Take advantage of the data your campaign naturally provides and seek out any data that would allow you to improve your fundraising efforts.
While it may not go toward a fundraising gala or the expansion of a popular program, your annual fund is necessary to keep your nonprofit’s lights on and staff paid. Planning your annual fundraising campaign ahead of time ensures that you have the funding necessary for operating expenses. With the basics covered, your organization can then focus its time and energy on carrying out mission-driven work and helping your beneficiaries.