The Double-Edged Sword of an Annual Fund

The term “Annual Fund” can be a double-edged sword. 

Arts organizations are perpetually in fundraising mode and Annual Funds are the primary vehicle to secure donations.  By comparison, membership campaigns are similar, but Annual Funds are, well, more edgy.  But because Annual Funds run for a full year we’re often lulled into putting off that work by the illusion that we have all year to do it.  Other urgent issues arise. One day goes by.  Then another…and that side of the sword can cut deeply into your performance.

Arts and cultural organizations cannot afford to measure each day of an annual campaign equally. Taking the goal and dividing it by 365 days to determine a daily goal as a benchmark is a losing approach. All Annual Fund days are not created equal. RSC believes that the success of your Annual Fund is determined in the first sixty days and getting out-of-the-gate with intensity is key to your success.  

Frontloading your activities is therefore a must.

Why frontloading?  Annual Funds don’t have obvious deadlines like performances or exhibit openings, but the timing within a campaign is similar with its own urgencies, deadlines and opportunities. RSC recommends tying together the planning, timing and goals – and then orchestrating the campaign with intense amounts of leverage, momentum and urgency – especially during the first six months of your efforts.  Frontloading gives your Annual Fund the energy it needs to be successful.

So how can you frontload your campaign? Here’s the basic structure to get the growth you need…

First, giving begins at home – starting with those who are most invested in the organization and who often require the least amount of cultivation.  Your board sets the pace for the campaign – giving first and giving generously.  Renewing and lapsed donors / sponsors come next – go for the upgraded gifts.  Non-donating subscribers / members and sponsors quickly follow. By using this hierarchy you can reach nearly all of the “family” and often reach a majority of your goal within the first six months of your fiscal year.

You now have a full six months to reach the balance of your goal through new gifts, second gifts, and so forth – and time is on your side.  You can now dedicate the latter half of your campaign to those prospects needing a longer cultivation process, plus, you’ve built tremendous momentum that will attract new donors. This part of the campaign is inherently more difficult but you’ve created ample time for the task of expanding your donor base.

Along with ramping up the campaign’s momentum, frontloading also acts as an insurance policy. If a long-time “big” donor suddenly underperforms, you’ll know about it in the earlier stages of the campaign and will have lots of time to find other sources of income to make up for the loss.

And what about pledges?  RSC says don’t just count on a repeat annual gift; commit it early. Even if the gift doesn’t immediately materialize, securing pledged commitments still helps build momentum for the balance of the campaign. RSC recommends pledges have no more than a three-month fulfillment date because anything longer jeopardizes the gift.

RSC has frontloaded dozens of annual funds because it is a tried and true method to build successful, growing campaigns.  We also know that if your organization isn’talready frontloading, it can be a tough transition – but we can help.

So don’t get cut by the double-edged sword of an Annual Fund.  Growth is important – and the urgency is now.