4 Best Practices for Designing Your Annual Fundraising Plan

To make the greatest possible difference in your community, the majority of your nonprofit’s time and resources should go toward mission-related initiatives. However, it’s also necessary to set aside funds to cover the administrative expenses that keep your organization running, from compensating your employees to upgrading office equipment to simply keeping the lights on. 

This is where your annual fund comes in. Also known as annual fundraising or annual giving, this term refers to unrestricted funding your nonprofit raises from dedicated campaigns throughout the year. While unrestricted funds can technically go toward any of your nonprofit’s expenses, annual fund donors understand that when it comes to their gifts, your top spending priority is your operations.

As with any fundraising initiative, a successful annual fund strategy begins with a clear plan. In this guide, we’ll walk through four best practices for developing a strong annual fundraising plan—let’s dive right in!

1. Lay a Foundation Through Prospect Research

According to DonorSearch, prospect research is essential for effective annual fundraising, “both so you can secure the 60% of annual funding that comes from major gifts and so you know which annual donors you can ask to upgrade their support each year.” 

Prospect research provides detailed insights into your supporters’ ability, willingness, and readiness to give impactfully to your nonprofit. It allows you to save time and resources by prioritizing top prospects in your annual fund outreach and major donor cultivation efforts.

To determine which donors may be inclined to make significant annual gifts, look for three types of data points in your research:

• Capacity indicators demonstrate donors’ wealth and include factors like real estate ownership, stock holdings, business affiliations, and political giving history.

• Philanthropic indicators indicate donors’ charitable tendencies and include previous donations to your organization and/or other nonprofits.

• Affinity indicators show whether donors are likely to support your specific nonprofit. They might include a connection to or passion for your mission, personal information like interests and values, and a history of nonprofit involvement through event attendance, volunteering, board service, or advocacy.

To find these data points, use a comprehensive prospect research database that pulls information from various trusted sources and is updated regularly. Don’t overlook your nonprofit’s CRM records, though—you might have untapped major donors among your existing supporter base!

Additionally, to take your organization’s prospect research to the next level, consider incorporating artificial intelligence (AI) tools into your process. In particular, AI-powered predictive modeling and prospect reporting solutions can enhance your process by providing deeper analyses of prospect data and making recommendations to streamline outreach.

2. Create a Detailed Calendar

An annual fundraising calendar helps you keep track of all of the efforts you’ll dedicate to annual giving in the coming year. That way, you can plan ahead and ensure you have enough staff and resources to cover each initiative. The calendar format is particularly useful since it provides a quick overview of the entire year’s campaigns at a glance.

When creating your annual fundraising calendar, remember to include:

• Timeframes for specific goals and initiatives.

• Fundraising event dates and preparation timelines.

• Tax deadlines and other administrative dates.

• Holidays and observances that could help you boost your fundraising, such as GivingTuesday and affinity months that align with your organization’s mission.

While you’ll create an annual fundraising calendar from scratch once a year (usually at the end of the previous year to make sure your team is prepared), Double the Donation recommends revisiting your plans regularly and treating the calendar as a living document. Plans frequently change in the nonprofit world, and adapting your fundraising calendar accordingly will set your team up for success no matter the circumstances.

3. Focus on Relationship-Building

In addition to raising money for your organization, your annual campaign should help you develop deeper relationships with donors. When you get to know your donors and personalize your asks accordingly, you show them that your nonprofit values them as individuals, not just ATMs with legs. This encourages them not only to contribute to your annual fund this year, but also to stay involved with your mission long-term.

Here are some ways to boost your nonprofit’s annual giving while strengthening donor relationships:

• Offer a variety of ways to give. Allowing donors to contribute to your annual fund via their preferred method can increase campaign engagement. From recurring gifts to pledged donations to merchandise sales, there are countless strategies you can try. Analyze past annual giving data and consider what you know about your supporters to choose the best methods for your organization.

• Start a membership program. In most nonprofit membership programs, supporters receive exclusive benefits in return for contributing a set fee to your annual fund. Consider creating tiers within your membership program to encourage members to give more in exchange for better perks. These programs also create a sense of community among members and make supporting your organization more engaging.

• Market matching gifts. Although many companies match employee donations to eligible nonprofits, donors often don’t know about their employer’s matching gift programs or how to initiate the process. By embedding a matching gift tool into your online donation page and marketing matching gifts alongside annual giving, you can spread awareness of this opportunity and multiply the impact of many annual fund contributions.

• Promote involvement beyond monetary giving. In addition to donating, there are numerous other ways for supporters to engage with your organization throughout the year. Encourage annual fund donors and other interested community members to get more involved by volunteering, attending events, advocating for your cause, making in-kind gifts, and keeping up with your nonprofit through social media and email newsletters.

No matter how donors contribute to your annual fundraising efforts, thank them promptly and personally. Even small gestures of appreciation can help your nonprofit strengthen donor relationships and secure sustained support.

4. Track Annual Giving Progress

As you implement your annual fundraising plan, monitor your progress to determine what is working well and where you can improve along the way. Start by choosing key performance indicators (KPIs) that align with your fundraising goals, such as cost per dollar raised or donor acquisition cost. Then, track these KPIs using your CRM, fundraising software, marketing analytics tools, and other relevant solutions. 

Review these metrics regularly so you can adapt your campaigns as needed. If you don’t yet have a sufficient amount of information collected in certain areas for this year, consider looking back at past campaigns to make adjustments based on historical data.

When you back up your annual fundraising decisions with data, you can create better, more effective campaigns that help increase donor retention and boost your fundraising totals. Take advantage of various types of campaign data and strategically collect feedback from inside and outside your organization to improve your fundraising efforts.

Thoroughly planning your annual fundraising campaign sets your nonprofit up to secure the funds you need to cover essential operating expenses all year long. With the basics under wraps, your team can focus more bandwidth and resources on carrying out mission-driven work and helping the community. Happy fundraising!