Originally published in the December 11, 2015 AHP Connect
The following article is based on an AHP webinar, “Trends in annual giving: Practical approaches to meeting your institution’s and donor’s needs,” presented on June 17, 2015, by Ann Thompson-Haas, FAHP, principal and lead consultant at Larkwood Consulting, LLC, in Oakland, Calif. and New York, N.Y.
Major gifts may get the glory, but it is important not to overlook the importance of annual giving. Annual gifts have always been the foundation of successful development programs, having built and sustained most health care philanthropies that exist today. Now, says Thompson-Haas, annual giving has renewed significance as a key tool in a more refined approach that balances the art and science of a year-round strategy for giving.
Thompson-Haas discusses eight major trends to consider when developing your foundation’s annual giving program:
- The global financial crisis reset the bar. As a result of the 2008 financial crisis, annual giving donors cut the number of organizations they donated to down to approximately five or six. Donors became more mindful of who they were giving to, making the pool of recipients more competitive. It is important to note, however, that giving has recovered: Donations to nonprofit hospitals, health care systems and related facilities in North America increased by $378 million during the 2014 fiscal year, advancing to a record total of $11.123 billion, according to the 2015 AHP Report on Giving.
- Annual giving is more than a fund. Annual giving is not just about money, but also about donor development and relations. Only when you have received a second donation should you acknowledge that you have officially acquired a donor. After receiving the second gift, your focus becomes long-term retention and relationship development. In this way, annual giving helps build a pipeline of donors for major and planned gifts.
- Donors are changing. There is a generational shift taking place and the people who will soon be the largest population of donors are inherently different than the ones we have known for the last 20 years. We are still focused on traditionalists—those above the age of 70 who donate because they use health care and believe it is the right thing to do. They need little convincing in comparison to baby boomers, who make up the largest group of future health care donors and want to be told why they should donate to your organization. “There is more competition, so everything we do, we have to do more mindfully,” says Thompson-Haas.
- Retention is wobbly and a top priority. About 10-30 percent of first time donors renew within health care philanthropy. Donor retention and consistent giving can possibly predict the likelihood of a major gift. Thompson-Haas offers these tips for increasing retention: