Two Kinds of Money
Developing a household budget is a relatively simple task. First, you set aside money to live on – for rent, food, utilities, and (hopefully) a little fun. Then, you put aside money to invest in your future – for education, retirement, and other life goals. It’s not that different for nonprofit organizations. They also need money to grown on. Often, this comes from endowment or capital gifts that are invested or used to construct and improve facilities.
Educational, healthcare, and other nonprofit organizations need money to live on too. Typically, this comes from dues, tuition, and other fees. Unfortunately, this is rarely enough to fully support an organization’s operating budget, which is why annual funds are so important.
There is no single or universal definition of what should be counted in an annual fund. In fact, organizations choose to define their annual funds in many different ways. What is universal, however, is that nonprofits don’t just need money to help them grow. They need money to help them operate – to run, to work, to function.
They need money to live on. They need annual giving.
Want to learn more? CLICK HERE for AGN’s Webinar on Fundamentals of Annual Giving.