How annual and leadership annual giving can drive discovery in the new era

Along with other facets of Advancement, the pandemic has deeply affected annual and leadership annual giving. In a recent GG+A COVID-19 impact survey, 68% of responding organizations said that their participation numbers had declined relative to 2019. 57% reported a decline in the number of new donors to their organizations.

In May, The Chronicle of Philanthropy reported that one in five U.S. donors might have stopped giving during the pandemic, and that 53% of donors were approaching their giving more cautiously. In the United Kingdom, a recent poll of the general public reported that only 54% had made a charitable gift of any kind in August, the lowest level ever recorded by this particular survey.

The factors driving this decline are clear–the global imposition of lockdown measures has affected both educational and wider nonprofit organizations’ ability to run mass participation annual giving events. That’s led to a significant decline in giving among younger and “casual” donors.

Encouragingly, the decline in giving among older, wealthier, donors does not appear to have been so marked. In the United Kingdom, the AB social grade showed the smallest decline in giving, while in the survey reported by CoP, baby boomers were most likely to say they would maintain their giving amounts, compared to only 40% of millennials.

However, it is certainly the case that our clients working in annual giving know they have a significant hill to climb this fiscal year in order to win back lost donors and reinvigorate donor acquisition.

The key question for Advancement leaders in relation to annual giving should now be to what purpose?

The annual giving program as inclination machine

For many of our U.S. educational clients, the single most important measure of their annual giving success has been the participation metric–the percentage of undergraduate alumni who make a philanthropic gift of any amount to the institution that year. However, U.S. News & World Report downgraded the weighting of undergraduate alumni giving in its 2021 methodology, possibly permanently.

In any case, GG+A has long argued that institutions should use a range of metrics to evaluate annual giving success. That approach enables them to take a more holistic view of the annual giving program than is possible via the participation metric.

The key to our approach to annual giving is our knowledge that a donor’s major gift to any nonprofit is rarely, if ever, his or her first gift. Our donor surveys have also found that it is very unlikely for a donor to consider making a major gift to a nonprofit organization unless it ranks in the top two of his or her philanthropic giving priorities.

Engaging a donor via multiple small gifts over time, and fostering a deep commitment to the organization through creative and thoughtful stewardship of these gifts, are thus key building blocks in the process that may lead to a donor eventually being “discovered” and qualified as a potential major donor.

This is what we mean at GG+A when we talk about the key role of an annual giving program as being an “inclination machine.” Seen through this lens, the truly important metrics for the annual giving program become:

• Net revenue (net revenue delivers impact, impact drives stewardship)
• Donor retention
• Donor upgrade
• Donor-reported satisfaction with the giving experience
• Donor-reported commitment to the organization
• Overall growth in the donor base
• Number of “hand-offs” per year to the major/principal giving and planned giving teams (although these donors should rarely, if ever, be removed from annual giving solicitation)

Adopting these metrics in preference to a narrow focus on participation should lead to a new vision for annual giving that’s focused on the long-term development of donors toward realizing their full philanthropic potential for your organization.

Nearer-term tactics to drive discovery via annual and leadership annual giving

That is the long view of annual giving from a GG+A perspective, and how it should drive discovery. You might reasonably ask what you can do in the nearer term to integrate annual giving more fully into a reimagined discovery program.

The good news is that many of the traditional tools of annual giving have retained their currency during the pandemic period, chief among them direct mail. Many of our clients are reporting improved response to direct mail solicitations due to their donors being at home more often with the time to read and respond. However, you should not approach direct mail from the perspective of end-to end mail solicitation and response. Instead, we suggest you take a multichannel perspective that recognizes that the mail pack–in conjunction with email–is now your most powerful tool for driving what is most likely to be an online gift response.

Key to this is the performance of your online giving presence–optimizing it both for overall traffic and for the best possible conversion rate from visit to donation. Our clients report that they often receive a significant number of leadership annual gifts simply from the inclusion of leadership giving as an option on reply coupons and online donation pages. So, now is an excellent time to take a hard look at your online giving presence, ideally testing it with donors and potential donors, to determine where the scope exists for significant improvements in user experience.

You can replicate many aspects of major gift solicitation in print or digital form for leadership annual giving solicitations. The most notable example of this is the proposal mailing, which is a high-touch direct mail piece for a specific project or giving priority. The piece aims to mimic the look and feel of a major gift proposal, but is sent to a wider audience of potential leadership annual donors. Plan to follow these solicitations up with a phone or email contact from a gift officer.

Once these tactics are in place, the important work of the annual and leadership annual giving team becomes the monitoring of appeal response for outliers. That requires you to look for the small number of donors who in response to any annual giving solicitation give significantly more than requested. Aim to direct these donors into a personalized program of email and telephone stewardship, either by a specially selected team of phone-a-thon callers or by your leadership annual giving officers. They should also be included in future high-touch solicitations to secure their repeated giving at higher levels. With leadership annual giving donors who already have a more established relationship, leadership annual giving officers should actively consider the possibilities for “hand-offs” to major/principal/planned giving colleagues (mentioned above as a metric).

The key to this process is for a gift officer to learn what a donor is passionate about via thoughtful relationship building. The new gift officer can then be introduced to the prospect as someone closely connected to the particular area where the donor’s passion lies, and the relationship between gift officers can be transferred. This process should be socialized with leadership annual giving officers as the ideal culmination point of their work. Successful hand-offs should be recognized and celebrated internally on a regular basis.

Finally, I have spoken above about the importance of beginning to measure donor-reported satisfaction and commitment to your organization. There is no better way to do this than by instituting well-designed surveys into the annual giving program, and establishing these as a routine practice. Surveys need not be lengthy. They can be restricted to a few key questions that measure the above metrics, and can also be used as a lead-generation tool for gift officers.

Adrian’s annual giving counsel is available to your organization as part of GG+A’s new Virtual Resources for Advancement Professionals offering, which you can read more about here.