Six Best Practices for College Annual Funds

The best way to fund annual operating support in the long term is through the development of sources for repeatable, sustainable gifts—in short, the Annual Fund. The following best practices are key indicators of community college capacity to raise funds to support annual operations.

1. Raise funds as part of a well-defined Annual Fund.

2. Develop a diversified funding base with multiple revenue streams specific to the Annual Fund.

3. Raise funds for restricted funds in addition to scholarships by making the case for support to the college beyond scholarships in the same manner as four-year colleges make restricted appeals.

4. Commit to a specific Annual Fund goal and increase that goal by a realistic percentage every year.

5. Ask perennial donors to make additional matching gifts for targeted initiatives.

6. Emphasize the use of individual solicitations, annual grants, and employee annual giving in your Annual Fund appeal.

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1. Raise funds as part of a well-defined Annual Fund.

By definition, the Annual Fund is the source of repeatable, sustainable gifts. Even if you do not conceive of your annual fund raising efforts as a formal Annual Fund, you do raise repeatable, sustainable gifts every year. My goal is to help you develop long-term, committed stakeholders for the program, year after year by formalizing your approach to the Annual Fund and by clearly defining what types of gifts are for annual operating support and what types of appeals will yield those gifts.

2. Develop a diversified funding base with multiple revenue streams specific to the Annual Fund.

Relying on one fundraising strategy – an event, for example, provides an insufficient funding base for the long-term sustainability of annual funding. Incorporating a variety of fundraising methods that may include grants, individual solicitations, employee annual giving, and targeted written appeals will build a more dependable base of support.

 

3. Raise funds for restricted funds in addition to scholarships by making the case for support to the college beyond scholarships in the same manner as four-year colleges make restricted appeals.

The best way to raise awareness of the value of annual support – and the need for program support – is to make the case for a variety of needs under the umbrella of the Annual Fund. This strategy is advanced in contrast to the strategy of allocating precious unrestricting operating support dollars to fund specific, more or less restricted, priorities. Colleges sometimes seek to allocate unrestricted funds raised through special events and unrestricted mail campaigns to program-focused need. But you can always just sell those needs to charitable stakeholders. The reason you to build a donor base of committed, long-term stakeholders who understand various aspects of you mission.

 

4. Commit to a specific Annual Fund goal and increase that goal by a realistic percentage every year.

Making a public commitment to a specific goal is the best way to align good intentions with a commitment to outcomes. The funding model for annual campaigns is based on goal attainment. Depending on where you are in your developmental curve as an advancement program you may be looking at annual percentage increases as high as 10 to 12 percent if you are just starting out, or as low as 2 to 3 percent if you are raising a million dollars a year via your Annual Fund.

 

5. Ask perennial donors to make additional matching gifts for targeted initiatives.

Once way to raise the bar for long-term donors to increase their giving is to ask them for additional gifts to match the gifts related to a specific initiative or, for example, for first-time gifts. Minnesota Public Radio uses just this strategy with its donors who give via permanent monthly pledges. You could try the same tactic with employee annual giving donors who give via payroll deduction. I do hope you EAG donors are giving via ongoing payroll deductions as opposed to via annual commitments that must be renewed each year.

 

6. Emphasize the use of individual solicitations, annual grants, and employee annual giving in your Annual Fund appeal.

I recommend that you include in your fund raising plan a combination of three proven methods: individual solicitations for higher-dollar gift, annual grants, and employee annual giving.   These methods have been shown to be reliable sources of funding over time. If you wish to raise funds through special events, don’t “cannibalize” these tried-and-true methods to support the event. You don’t need it to close these gifts.

 

The Seven Product Lines of the Annual Fund

Never underestimate the role of the Annual Fund. I’d like to point out a section of my book that opens Chapter 10, entitled “The Blueprint of an Annual Fund.” It contains the presentation of the seven product lines of the Annual Fund. These are common product lines under the collegiate model of development, a model that does not depend on special event revenues for repeatable, sustainable gifts.

The chart that presents the seven product lines with some hypothetical goals appears on page 124. It looks like this:

Activity – Director of Annual Giving Goal
Board of Directors Giving 30,000
Employee annual giving 25,000
Phonathon 8,000
Giving clubs 20,000
Board-inspired giving 20,000
Scholarships 50,000
Other 2,000
In Honor/memorial 5,000
Subtotal 160,000
Grant writer: Grants (annual) 90,000
Total 250,000

The model assumes the advancement office is a three-professional shop, staffed with a CDO, full-time director of annual giving, and a grant writer who works half-time on annual grants and half-time on major grants.

Using the table makes it easy to break out sub-goals that determine the success or failure of the Annual Fund. Note that Board of Directors giving, the phonathon, board-inspired giving, and grants are also excellent vehicles for restricted program revenue. You may notice there is no direct mail category here. I don’t often recommend what I think of as “bulk mail.” Instead, I break mail down into scholarship mail, giving clubs, and replace most bulk mail with the phonathon.

The most common methods by which many community colleges raise annual revenue are:

  • Employee annual giving
  • Special events
  • grants

If you’ll notice the dollar goal assigned solely to the director of annual giving above—$160,000—shows a pretty healthy bottom line assigned to this position without relying on events. Every dollar raised goes straight to the bottom line. While I advocate the use of a phonathon in place of undifferentiated direct mail, I do have a slight exception to that rule: renew the donor the way you acquired the donor. I use a targeted, highly personalized letter appeal that way, and I would guess you sometimes do, too.

But I also think that the launch of a phonathon could be a lucrative method by which to raise funds for annual unrestricted and scholarship support. Don’t forget the potential of a Parent’s Appeal via the phonathon. At Normandale Community College, I had my phonathon callers calling parents of current students between the ages of 18 and 22. It worked well, and I think it could work well for you. Read about how to launch a phonathon on pages 140-50.

Board-inspired giving, an initiative that targets selected peers of board members with letter appeals followed by a phone call from the board member is another means I have found to be effective for two-year colleges. Read about how to conduct a board-inspired giving campaign on pages 157-59.

Good luck, and good works to you all!