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Regular giving

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Establishing a culture of giving

Bev Witten, LeadershipLabSA

Bev talks about establishing a culture of giving at your institution Download audio file.

The annual fund is a catch-all term for fundraising activities that are designed to stimulate regular giving. It encompasses activities such as telephone campaigns, direct mail, e-appeals, inserts in alumni magazines, adverts and web-based appeals. These activities are important for many reasons, including that they:

  • Provide income both for specific projects and unrestricted funds
  • Establish giving habits and enable patterns of giving to be tracked
  • Establish a donor pipeline, enabling the identification of donors with the potential capacity and propensity to give bigger gifts in the future
  • Increase donor participation rates
  • Help improve and keep data about prospects up to date
  • Are a great stewardship tool
  • Help reinforce core messages about an institution
  • Help identify the enthusiasts who might be leaders or significant volunteers
  • Strengthen the bonds between an institution and its prospects

Planning an annual fund strategy

When putting together your annual fund strategy you need to consider two main factors: (1) the volume and quality of your data(2) your investment budget. Annual funds are not cheap to run and require substantial investment before returns are seen.

Telephone fundraising

Telephone fundraising gives you a direct link with a prospect, offering a higher chance of success and the flexibility to be able to offer prospects multiple giving options (e.g., someone may dislike the idea of committing to a regular gift but may be interested in leaving a legacy instead). Telephone fundraising is also an opportunity to gather qualitative data on prospects that can be invaluable when identifying major gift prospects.

Telephone fundraising is a tightly managed process. Callers are trained and given scripts as the basis for their conversation with prospects. Commonly, prospects are alerted in advance, by letter or email, that they will be called.

Callers encourage donors to commit to regular gifts by direct debit or to increase the level and/or frequency of their current giving. During the call they will update the data held on prospects and listen out for indicators that prospects might have the potential to become major gift donors.

Direct mail, adverts, inserts and web-based appeals

These methods of fundraising tend to be less effective than telephone fundraising, as they require more effort on the part of the prospect. Typically, fewer than 5 percent of recipients will respond.

However, these methods do help to reinforce the messages of the institution and encourage the momentum of shifting to a culture that is more accepting of fundraising to support Higher Education.

It costs very little to always carry an appeal on your website, and nothing at all to use your email footers, Facebook pages, Twitter feeds and other e-media to promote appeals. It all helps to reinforce your fundraising messages.

Most important, you should make it easy for people to give. Donors don’t want to fill in long forms that then have to be put in an envelope and posted. Make things easy by introducing ‘text’ mobile phone giving, web-based giving and other shortcuts. Always stress the benefits of any tax or government incentives or corporate matching to maximise the donor’s gift. Suggest set amounts to guide the donor’s choice.

The who, when and what of asking

Many institutions aim to ‘ask’ all their donors at least once a year by whatever the most effective method they have at their disposal.

Whilst some institutions differentiate between major donors and annual fund donors, others do not. The risk in separating out major gift prospects is that they will go ‘unasked’ for long periods of time and lose interest in your institution. That being said, receiving an annual appeal after having made a major gift would offend most major donors.

An important success factor in annual funds is the careful division of your database so people are asked at the right time and asked appropriately. This will improve chances of success.

The most successful ‘asks’ are those that go to existing donors. They already know and like your institution and will be more likely to renew or increase their gift (especially if they have been well-stewarded).

You also need to ask lapsed, occasional and nondonors so you can increase your donor pool and remain sustainable. You might segment your data in a number of ways: age, subject of study, gender, nationality, ‘warmth to institution’ and known capacity to give.

Your decision about when to make ‘the ask’ should be based on several factors:

  • Your accounting year. You might want to ask at the beginning of the accounting year so the gifts come in during that year
  • Your capacity to deal with the response. You need to ensure that you have sufficient staff and resources in place to cope with a peak in activity
  • The time of year. Avoid holiday seasons when people might be away. Similarly consider the implications of religious and traditional festivals for people’s likelihood to give. For example, people may have incurred expenses during these times, or in other cases may be more willing to give
  • The availability of suitable fundraising projects

When considering what to ask people to support, you should tailor their options based on what you know about them. For example, when contacting engineering graduates you might offer them two options - an unrestricted fund to support projects in the engineering faculty or the chance to sponsor engineering scholarships for students from deprived backgrounds – and propose one giving method on the donation form.

The ask should be simple and easy to communicate to prospects: they need to be able to ‘get it’ quickly. Experience has shown that donors are more likely to give when presented with a smaller number of options.

Offering clear giving options is also helpful, especially if they can be related to the project.

How to know if it is working

Successful annual fund managers love numbers. They are great at looking at lots of numerical indicators to decide whether a campaign is working and at using these figures to inform future campaigns.

Return on investment weighed against the income generated per alum is an important factor. It might cost GH₵20 to telephone an alumnus, but the return rate per 1,000 calls might be GH₵20,000. Other measurements of success might include:

  • Number of renewing donors
  • Number of lapsed donors renewing
  • Number of new donors
  • Numbers of legacy pledges or requests for legacy information
  • Number of major gift prospects identified
  • Number of gift level upgrades
  • Number of offers of nonfinancial support (volunteers)
  • New data obtained (updated addresses, email addresses, mobile phone numbers, etc.)
  • Length of phone calls (indicative of interest in and warmth toward the institution)