Right on the Money: Annual Funds Offer Unrestricted Possibilities

Stacks of hundred-dollar bills.

Like any grant-dependent nonprofit, The Oasis Center, a youth-serving agency in Nashville, TN, faces a financial challenge: Nearly every grant or corporate donation comes with constraints on how the money can be used. These are restricted gifts, in fundraising-speak, and can only be used for a particular program or purpose. But at the same time, the center needs to keep the lights on and pay for unforeseen needs.

So seven years ago, Oasis President and CEO Hal Cato launched an annual fund, which gives his organization a steady stream of dollars to use however they wish. In addition to freeing up money for unfunded administrative functions and programs, the annual campaign, which now accounts for one-quarter of the budget, is largely driven by gifts from individuals. That fact allows Cato and his staff to establish long-term, substantive relationships with their most consistent donors, who often enrich the center in more ways than one. “Donors may start by writing a check, but many of them eventually come in to work in our shelter or tutor our youth,” Cato says.

Cato and Vice President of Advancement T. Allen Morgan shared their tips for running a successful annual fund:

Make a schedule. “Summer is always a slow time for charitable giving,” Morgan says, so Oasis kicks off their annual campaign with an initial round of donor contacts in August, and finishes the year with a similar effort that coincides with their older youths’ high school graduations. Many organizations also make a marketing push in December, when holidays and the end of the tax year put a lot of people in the giving mood.

Fine-tune your message and marketing. “It’s really important to have a clear vision for what you want the fund to represent, and what message you want to send to the community,” says Cato. Oasis invested in the graphic design, writing and photography of their marketing materials, making sure that every piece effectively and clearly communicated why the Center would be worth a donor’s money and interest. “It shows you’re serious, and that you have a plan for the money.” He also recommends offering people multiple options for giving, like monthly deductions or donating stock.

It starts with the board. Existing donors, large or small, can be great first contacts for setting up a new year-round campaign, but board members can help find a new group of potential philanthropists. Oasis put together a committee of board members who suggest people to contact, write thank-you letters and introduce the CEO to people who want to know more about the program.

Create lasting relationships between donors and your organization. To build those strong connections, Morgan says, a nonprofit has to have its CEO and front line staff on the fundraising team. “If a person is considering a major gift, they want to either speak to the person who makes it all happen, or to the people who help the kids that we serve,” he says. Cato makes sure to take a personal role as lead fundraiser for the organization: “It’s not just ‘You send me a check, I send you a thank-you card.’ For me, it’s about connecting with donors on a personal level, making sure that there’s a lot of interaction and that they really understand our work. … That’s when you really get someone who’s going to stick with you.”

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