The Window Is Closing on Annual Giving


The window is closing on annual giving as the main funding strategy for nonprofit organizations. And where one window closes, you need to find a door, like asset-based giving. It’s a lot easier to walk through.

As my colleagues, Greg Ring and Steve Caton have discussed, the window of opportunity is closing on annual giving. Sure, annual giving fundraising is not going away, nor should you shut down your annual fundraising program.

But as recent studies by the Indiana University Lilly Family School of Philanthropy show, annual giving trends are declining across the board.

There are certainly a lot of reasons for the decline in cash-based, annual gifts.

Therefore, nonprofit leaders like you must come up with long-term strategic answers to the problem instead of band-aid solutions that barely nudge the needle short-term.

White Noise

There are over a million nonprofits in the United States alone—and the number of nonprofits registered each year is only going up! They all have a cause. They all need donors.

They all have access to ever more powerful and cost-effective channels of communication, which means each one is communicating with the same donors you are.

For the donor, this all becomes “white noise.”

The constant barrage of nonprofit communications inundates people with news, solicitations, commercials, etc. to the point that few pay much attention to base-level (annual) fundraising campaigns.

Savvy Donors

Speaking of nonprofit commercials, ads, and solicitations—all of them come with a cost. The result is that nonprofits spend millions of dollars hoping to simply pay for the cost of their fundraising efforts.

Raise a dollar to spend a dollar.

This isn’t such a bad thing, except that donors are now aware of the price of these fundraising extravagances. Today’s donor realizes that his or her dollar isn’t going to help animals or children…it’s going to pay for the very communication used to acquire them.

Don’t get me wrong. I’m not against donor acquisition strategies, per se.

But the effectiveness of spending the entire campaign budget to acquire names in the hopes of future retention or renewal campaigns is growing thin.

And if the effect of traditional donor acquisition/retention strategies is waning, then we should direct our resources and time to other opportunities that provide much greater returns on investment, like asset-based giving.

The Tyranny of the Urgent

At the end of the day, it’s the tyranny of the urgent that keeps nonprofits from diving into cultivating transformational gifts and keeps them overly invested in base-level fundraising strategies.

The tyranny of the urgent keeps #nonprofits from diving into cultivating transformational gifts. Share on X

To escape the coming dry spells in annual giving, you must begin shifting to a more long-term, permanent, asset-based funding mindset.

Concrete Steps

Moving from an over-emphasis on annual fundraising to an asset-based approach isn’t easy. But there are some concrete steps you can take to get there.

1. Change the leadership dialogue.

John Maxwell once said, “Everything rises and falls on leadership.” That means you MUST begin with your organizational leaders.

Change the mindset of your organizational leaders from short-term problem solving to long-term thinking. Share on X

Begin by changing the internal dialogue of your organizational leaders from short-term problem solving to long-term thinking.

2. Articulate long-term vision.

While you must have a vision that goes beyond the walls of your organization, having an internal vision is not enough. You must articulate your long-term vision to your donors.

Over time, you’ve got to communicate both the right-now reasons to give and the long-term reasons to invest in your organization.

Images of orphans starving in the street is a short-term vision. A network of orphanages with a unique approach to mental health, education, and emotional care is long-term. Don’t forget the long-term vision.

3. Invite donors into the conversation.

This is the scary part. But it’s necessary to cultivate transformational gifts.

Your donors are probably used to short-term, annual fundraising tactics. So you’ll need to gradually invite your high-capacity givers to a conversation around asset-based giving.

4. Think of donors first.

Donor-centricity is much more than a good fundraising technique. It’s an institutional mindset that changes everything in your area of service.

Donor-centricity is more than a fundraising technique. It’s an institutional mindset that changes everything. Share on X

Find ways to serve your donors’ needs, even if they’re not directly related to what you do. For example, Prestonwood Foundation in Plano, Texas has served their donors by offering Social Security benefit classes and retirement planning seminars. This, of course, is not why the foundation exists, but it is a way they can serve a felt need among their donors.

So how has that worked out for them? It helped them build such an affinity with their donors that opening up the conversation about asset-based giving was a natural next step.

Instead of getting their contact info to ask them for more gifts, tell your donors that you want to invest in them because your mission is worth their long-term investment. This level of donor care must become an organizational priority.

5. Get outside help.

Cultivating asset-based gifts is complicated, it takes time, and in most cases, it requires a confidential third-party service.

It’s an inherent conflict of interest. Donors simply won’t show you their balance sheet.

That’s why we do what we do at The Giving Crowd. We specialize in helping donors understand the ways they can use their God-given assets to further the causes they most care about.

By providing a complimentary, confidential consultation service like The Giving Crowd, you can build the trust between you and your donors.

Ready to see how we can help you cultivate transformational gifts for your organization? Let’s talk. The call is free, and there’s no obligation.