Frequently Asked Questions About the Annual Fund—And How To Answer Them!

Vol. 12 No. 9

development eletter Vol12 No9 moneyQ

As more parents come from the Millennial or Generation Y age groups, donors are (typically!) leery of giving to a nebulous “cause.” They prefer to know exactly how their donations are being used by the institution. Thus, convincing people to donate to your school’s annual fund can be tricky, as the annual fund is often a “catch all” fund raiser that finances many different programs at the school.

Here, then, are some common questions asked by families about the annual fund, and how you can best answer them to encourage large donations.

What Does the Annual Fund Pay For?

The answer to this question varies from school to school. Some use the annual fund as a way to “fill the gap” between the cost of providing top-quality education and the amount of hard income gained from fees and tuition. (ISM theory discourages this practice, as your school should have a solid financial plan that allows your school’s operational budget to be funded by "hard" income. Thus, the annual fund becomes the solution for all the “extras” that makes your school not just good, but exceptional.)

But there’s a second, unspoken question in the first: Why should a donor give for “extra” items if the school would stay solvent on tuition alone? When you answer the first, be ready to present a list of all the things your school managed to do last year, as funded by annual giving. Technology improvements, facility upgrades, and special speakers all add to students’ educational experiences—and are possible through donors like them.

But Isn’t That What Tuition and Fees Are For?

Not necessarily, but families don’t realize that immediately! Explain to parents and donors that tuition pays for operating expenses for the school. Salaries, supplies, and facility maintenance all come from this budget—they’re what keep the school functional in the first place!

A breakdown of the school’s budget and expenditures, divided into “necessary” expenses and “optional” or “value-added” ones, may help parents realize that both tuition and donations make your school one of the best education options.

Who Contributes to the Annual Fund?

Why, everyone! But that’s not what the family wants to know.

When a family asks this question, they want to hear who else thinks the annual fund is worth donating to. This is when it’s really important to have Trustee and faculty/staff donations close to 100% participation levels. A high participation rate in the school community at large helps justify the investment for the questioning family.

Everyone should feel passionate enough about the school’s mission that they’re willing to donate—even if it’s just a small amount. In this case, it’s truly the thought that counts.

Prestigious donors outside the school could be mentioned to families, too. But, if they’ve given anonymously, be sure to respect their wishes and just say that “friends of the school” have given X dollars to the annual fund.

How Much Do I Have to Contribute?

No family should be alienated if unable to contribute large sums of money to the annual fund, nor should their children be shamed—even indirectly!—if the family cannot contribute at all.

One angry parent told Philanthropy that her son’s private school only allowed children whose families had donated to the annual fund to “dress down” for a day, then proceeded to take class photos to send to parents and post on social media where it “was clear who had worn a uniform and [not] given and who [had] earned a dress-down day.”

As Philanthropy said in its response to the mother, while rewarding students for the annual fund efforts can be beneficial, creating an “anti-award” atmosphere can be detrimental in the long run.

While 100% participation is a desired goal, only the individual family knows if even a small amount would strain their finances. Parents will be more likely to donate in the future if they feel respected now.

The end of the school year provides us with a time of reflection and a time to prepare for the fall’s new start of the next year’s annual fund campaign. Prepare your school’s answers to these common questions now to make sure your annual fund starts off on the right track later!

Want to start your Annual Fund Campaign on the right foot next fall, but not sure where to start? Attend ISM’s workshop "Your Annual Fund From A to Z" in Stowe, Vermont, as part of the Summer Institute! You’ll get expert instruction on how to form, implement, and finish a strong year-long campaign for your school’s annual fund.

Additional ISM resources:
ISM Monthly Update for Development Directors Vol. 8 No. 7 Ask the Development Director: "What is the difference between the annual fund and annual giving?"
ISM Monthly Update for Trustees Vol. 12 No. 4 Four Critical Ways the Board Supports the Annual Fund

Additional ISM resources for Gold Consortium members:
I&P Vol. 34 No. 15 Anchor Your Case for Support to Your Purpose and Outcome Statements
I&P Vol. 36 No. 14 Alumni Relations and the Portrait of the Graduate
I&P Vol. 39 No. 2 Full Disclosure of Non-Tuition Expectations During Admission

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