Charities With Annual Funds More Likely to Meet Total Fundraising Goals

Some 77 percent of organizations with an annual fund meet total fundraising goals as compared to just 55 percent of organizations without such a fund, according to a new report on the impact of annual-fund campaigns in overall fundraising.

Published by the Nonprofit Research Collaborative, the report is based on a survey of 945 nonprofits in the United States and Canada. Seventy percent of those nonprofits reported having an annual fund.

Organizations with budgets of at least $250,000 are more likely to have annual funds than smaller groups, according to the research. The biggest users of annual funds are arts and religious organizations, with more than 80 percent reporting having an annual-fund campaign. The increased rate at which organizations with annual funds meet total fundraising goals holds true across large and small organizations, according to the findings.

Retaining Donors

The report also zeroes in on one-year retention rates in annual-fund campaigns. Some 12 percent of organizations surveyed reported renewal rates of less than 50 percent in the most recent fiscal year, while 13 percent reported renewal rates of 50 to 60 percent. Sixty-three percent of respondents said that at least 60 percent of donors renewed their annual-fund gift.

Groups that log renewal rates of at least 50 percent are more likely to hit total fundraising goals and are more likely to raise more money than in the previous year.

“Organizations with a renewal rate of less than 50 percent of last year’s donors have a markedly lower probability of seeing increased funds raised this year,” the report concludes.

Gift clubs that recognize donors who give at certain levels, might also serve to help some organizations meet year-end fundraising goals, the research found. Organizations with budgets of at least $1-million were more successful in meeting fundraising goals when they recognized gift amounts with gift clubs, according to the findings. Among smaller organizations there was no correlation between the gift clubs and meeting fundraising goals, according to the report.

“Nonprofit Fundraising Survey: Special Report About Annual Funds” is available free on the Nonprofit Research Collaborative site.