Offering Donors the Option to Restrict Their Gifts
Making the case for annual fund support used to be pretty straightforward. Potential donors would often be asked to make an “unrestricted” gift to support the institution’s current needs. Those gifts would serve a budget-relieving function and be allocated to operations — meaning that anything and everything could benefit from annual philanthropic support. Donor impact was communicated in very general terms, such as supporting “margins of excellence” or “school priorities,” since annual gifts could potentially be directed to any aspect of the institution.
But due to the growing awareness donors have about the unique programs and opportunities at their alma maters, fully unrestricted giving has become less appealing in recent years. Increasingly, donors want to direct their annual philanthropic dollars to areas that are interesting or meaningful to them. In response to this shift, many annual funds are giving donors the option to be more targeted with their support.
Saint Ignatius High School in Cleveland has seen how allowing donors to restrict their annual gift can have a positive impact on participation rates and overall fundraising results. A few years ago, the annual giving team conducted an internal assessment of how they were communicating the case for support in their appeals. What they determined through this process was that much of their past marketing had been focused on soliciting unrestricted gifts, with occasional references to how the annual fund supports tuition assistance and distinct areas of school life. The team realized that their messaging was not only inconsistent, it was also unclear about how donors were making an impact.
As part of a new marketing strategy, Saint Ignatius decided to fully embrace messaging that highlighted where annual donors could direct their support. After engaging in discussions internally about donor priorities, the team proposed creating five specific categories within the annual fund that donors could use to direct their gift: tuition assistance, faculty through academics, the fine arts program, activities associated with the school’s Jesuit mission, and athletics. A “greatest need” option was also maintained for donors who did not want to direct their gift and for any gifts received without a designation. The school’s finance and administrative team was supportive of the new marketing plan, and because all of these designations were existing funding priorities, the annual fund would have the same budget-relieving impact for the organization.
To introduce the community to the new annual fund designations, the team redesigned appeals and marketing strategies. They also created special branding for the athletics designation, naming it after a beloved and longstanding athletic director, Father Sullivan. Advertising for The Father Sullivan Fund now appears in athletic programs and on the scoreboards during sporting events. In addition to the messaging in appeals, donors receive specific stewardship touches throughout the year that align with the direction of their annual gift.
According to Dan Malone, the Director of Annual Fund and Leadership Giving at Saint Ignatius, marketing the restricted giving options has helped increase alumni participation, particularly among younger graduates. Nearly 50 percent of total annual gifts are now designated, with these donors skewing younger than those who keep their gifts unrestricted. Having the option for restricted gifts also allows the annual fund team to solicit sizeable contributions that underwrite large budgetary expenses, such a team trips or Jesuit retreats, in personal solicitations to potential major donors. The gifts are still considered part of the annual fund, but the donors feel more empowered by the choice and generally more connected to their philanthropic support.
Donors today want to know more about how they’ve made a difference, regardless of their gift size. Providing the opportunity to direct an annual fund gift can better connect them with their impact, while presenting you with valuable information on their interests and motivations that can be used to cultivate ongoing support. After all, making a donor feel good about their current gift can lead to many more gifts in the future.
Want to learn more? CLICK HERE for AGN’s Webinar on Communicating with Young Alumni About Giving.