The Annual Fund —The Foundation of Nonprofit Philanthropy

The Annual Fund —The Foundation of Nonprofit Philanthropy

December 22, 2010 by jga_admin

By Meg Gammage-Tucker

I recently had the privilege of being asked to review and update Hank Rosso’s chapter on “The Annual Fund” for Achieving Excellence in Fundraising (published by the Indiana University Center on Philanthropy) and “The Annual Sustainability” course for The Fundraising School at Indiana University. This process reminded me of the true value of the annual fund as the foundation of quality fundraising programs for all types of nonprofit organizations.

The Annual Fund is not about the “funds” at all. It is about the beginning of your relationship with supporters who are the lifeblood of your nonprofit. And, it is about creating the foundation for your organization’s future—both in terms of financial stability and human capital.

The benefits and objectives of an annual fund are:

  • To inform, involve, and bond constituents to the organization
  • To establish habits and patterns of giving through regular and effective cultivation, solicitation, and stewardship
  • To provide annual (preferably unrestricted) support for operations and programs
  • To expand the donor base by soliciting gifts from new prospects and constituencies
  • To build a base of donors that can be cultivated to support all types of fundraising activities (including capital, endowment, and special projects)
  • To assist with identification and cultivation of lead and major donors and volunteer leaders
  • To offer accountability and transparency through regular communications
  • To provide an annual review of organizational priorities, the case for support, and communications
  • To assure improvement of cultivation, solicitation, and stewardship practices

A solid annual giving program is essential to health of all nonprofits. Other fund development programs will not be as successful or effective without the base of the annual fund to build on.