Why Does Your Nonprofit Arts Organization Engage in the Myth of the Annual Fund?

Why disrespect donors with, at best, only a choice to opt-out? Aren’t donors kinda important?

One year after a first-time donation, someone gets an unappealing appeal like the one pictured above. It may come as an email, as a letter in an envelope, or as a phone call. But sure as shootin’, it’s a-comin’.

And you probably don’t see anything wrong with that, do you? Just regular development work, right?

Yeah, that’s a problem.

When this article came up, or when you directed yourself to this website, were you informed that there were cookies involved, perhaps even giving you the opportunity to reject them?

When you bought a pair of jeans from an online store, did the store require you to have an online account to do so? Or did it strongly suggest that you do? Or did it incentivize the creation of an online account by giving you free shipping, order tracking, or other perks? Instead of asking you to opt-out of further emails, did it ask you to opt-in?

When you last walked into a brick-and-mortar shoe store and purchased a pair of boots, did the salesperson ask for your phone number to open an account? Were you given the opportunity not to opt-in to their mailing list?

All these are examples of customer opt-in marketing. It’s amazing what information people will give away for free shipping. But it’s the choice of the customer, not the choice of the store. In the case of computer cookies, for example, there is a California law that requires websites that do business there to do the pop-up cookie information message, along with a chance to decline them. Because companies don’t want to have to go through the trouble of producing a California version of their website (and because 40 million people live there), many (but not all) just place that message generally as people sign on.

At any time, when a donor sends you their first donation, do they know you’re going to hit them up for a renewal in a year? A renewal to a subscription to which they did not subscribe?

As always, think of it through their eyes, not yours. They sent you money because they wanted to help your cause do whatever it is that you do. They had to think about all the causes and charities in the world, ones that do things meaningful to them, and decided to send you some money.

You thanked them. You sent them a mail-merged acknowledgement letter detailing their gift, its tax-deductibility, your company’s EIN (or some other official number that anyone can use to make sure you are who you say you are), and maybe even let them know (in general terms) the good works they’ve helped support.

But let’s be real. You never told them there was anything called an “annual fund,” did you? To people outside your building, an “annual fund” does not exist. It’s something you concocted, a complete contrivance. Just because you enrolled the donor in a mythical club doesn’t mean they asked to join it.

Assuming you didn’t give them a chance to opt-in to your annual fund, did you at least give them a chance to opt-out of future communications? Did you comply?

Or did you sell their name on a list, trade their name with other nonprofits, and send them regular solicitations? Followed, 11 months later, by a request to renew an “annual gift.”

In 2023, you can’t do that and keep your reputation clean.

Earlier this year, I sent a donation (out of the blue) to a national nonprofit supporting the right to free speech which had several programs on the college level to help students assert themselves. The work is good. As a 30-year nonprofit veteran, I let them know (in a handwritten letter to the CEO – not just a quick email) that I would be delighted to be a significant monthly donor as long as I received no solicitations for money. I gave them the first of the monthly gifts with the letter.

I sent a letter because it was not only proof that I had sent it, but it was proof of receipt. If the check were cashed, I knew that the letter arrived. It was, so it did.

A solicitation letter arrived two weeks later. Because I’m not a schmuck, I assumed that this was simple oversight. I called the development director and asked them again never to send me anything (and that there was a monthly donation tied to that request). I asked them to spend their money on something else (overhead, programs, marketing, even solicitations to prospects – anything but sending something to me).

Two weeks later, their annual report arrived. It was filled with data, financial information, and descriptions of the programs that had induced me to donate in the first place. All good stuff.

But, there it was, in the fold around the staples in the middle of the magazine-formatted report: the dreaded church envelope.

Having now been officially oversolicited, I contacted them and asked them to cancel any further donations. I told them why. They didn’t argue, but seemed befuddled by the whole thing.

Will your people be just as befuddled when your more-knowing public asks you not to oversolicit them? Will a savvier public be likelier as time goes on to be peeved at your organization for letting them know that their first gift, given from the purist part of their generosity, was insufficient? Do they expect to be asked for more and more and more and more and more?

Do you wonder why today’s potential donors are reticent to contribute? Or why they contribute only once? Check your processes at the door, please. People who want to help you don’t want to be disrespected like that. Find some way to allow them to opt-in, just like those websites with the cookies.

Or do it the same way you’ve always done it because you’ve always done it this way. And watch the trust people have in you crumble. You know, like a cookie.

Your choice.

Based in Kirkland, Washington, Alan Harrison is a writer and speaker specializing in nonprofit organizations, strategy, the arts, and life politics. His columns appear regularly in major publications. Contact him directly at alan@501c3.guru.

If you’re feeling generous or inspired, just click on the coffee cup above. You don’t have to, of course, but if you can afford it and find some value here, please provide the desperate need for caffeine. Alan is always looking for good opportunities to write and consult for nonprofits that need a hand. And, of course, that elusive Perfect Opportunity™.

BIG NEWS: Alan’s new book, “Scene Change: Why Today’s Nonprofit Arts Organizations Have to Stop Producing Art and Start Producing Impact” will be published in January. CLICK HERE TO PRE-ORDER IN THE UNITED STATES. If you live in the UK, CLICK HERE.

Alan will be hosting a session on the responsibilities of Nonprofit Arts Boards for the California Association of Symphony Orchestras in August. If you’re affiliated with an orchestra in California, come join us in Riverside!

A few more copies may be made available for those booking conferences, reading engagements, and speaking engagements. Recruit your local bookstore, conference panel, or boardroom to get a visit from Alan. Let Alan know if you want bulk copies for your board!