frowning face with thumb down prospectThere are two words in fundraising that cause my stomach to tighten every time I hear them: prospect and annual (as in annual fund).

These two words live together in the minds, discourse, and language of thousands of fundraisers.

I don’t know how their use got started. I suspect that it was before the age of enlightenment. Because enlightened folks have discovered that donors are real live human beings with hopes and dreams for a better planet; people who want a relationship with a non-profit that does the important things they care about, rather than having a relationship based on transactions and money.

Take the word prospect. What does it mean?

I went to dictionary to look it up.

noun
1. Usually, prospect.

•  an apparent probability of advancement, success, profit, etc.

•  the outlook for the future: good business prospects.

2. A potential or likely customer, client, etc.

Except for the “possibility of success,” the word prospect defines a potential or likely customer, client or donor.

A potential donor. A likely donor.

Does that sound like an adequate description of that donor on your caseload who gave $1,000 last December? Is she a potential donor or a likely donor? No, she isn’t. She is a donor. A real live human being who has trusted you with her money to DO something that matters to her. There is nothing “likely” about her. She is today, in the present, not in the future.

By the way, the donor who gave $25 in the last 12-24 months is also a donor, not a prospect. A lapsed donor is a donor, not a lapsed prospect.

Here is why Jeff and I so aggressively object to using the word “prospect” when someone talks about a donor:

  1. First, it is a wrong label. The person is not a prospect. They are not someone who has not given. They are a donor – someone who has Think about this in a commercial context. Bill (the owner of a retail store) sees that his customer has come in the store – that would be a person who has been in the store before and bought stuff, or it could be a person who came into the store yesterday and bought something for the first time – Bill sees the customer come in the front door and introduces him to another customer by saying: “I would like you to meet my prospective customer.” What? Prospective customer? No! He is a customer. He buys stuff regularly in the store. Or he bought something for the first time yesterday in the store. The right introductory language would be: “I would like you to meet my customer.” Or to put this same scenario into a fundraising context, would the MGO introduce the donor this way? “I would like you to meet Mary, a good prospect of ours.” No, that would not happen. And if it did, it would be very offensive.
  2. It reduces the donor to an economic unit – a source of cash rather than a partner. If you call a donor a prospect, it means you only think of the person as a source of money. He gave the last time, so I guess the day he gave, he was a donor for a millisecond. But as soon as he gave and the transaction was complete, then our institutional gaze now looks forward to the next transaction. He moved from being a donor to becoming a prospect for another gift. I understand the logic of the use of this word. But it is all wrong. It is transactional language. It forces us to think about the donor and his economic potential. It even suppresses our gratitude for what the donor has given because now, as a prospect, he needs to give again. Our focus is not on what he has done and how together we addressed a societal problem. No. Our focus is on what he will do for us economically. He is a prospect in our minds. Now, of course, we are planning for him to give again, but because we label and think about him in this way, our attitude towards him is transactional rather than relational. And that is demeaning and strategically wrong.

This is why Jeff and I so dislike the use of the word “prospect” when it is attached to a donor. The proper use of the word is when the person has never given to you. That person is a prospect. But once she becomes a donor, that is what she is.

If you think this entire monologue is about wordsmithery, you are wrong. This is about how you view donors. Because the way you view and think about them will drive how you treat them. And if you treat them as objects, sources, and prospects, they WILL go away, believe me.

Let me be clear: there is a place for finding people who have never given before, and asking them to give to your organization. But using your valuable time to prospect for donors is not what any MGO should be doing.  MGOs should be focused on current donors.

Now to the word “annual” as in “annual fund.”

Jeff and I dislike this choice of words because, again, it reduces the donor to an economic unit. These words describe an annual institutional activity whereby we set an expectation that a donor will “do their annual thing” with us. The focus is on an annual transaction.

Here are what some leading consultants say about the annual fund:

“Gifts that fit the annual gift definition: A check from an individual in response to your annual fund mailing or phone call.”

“The annual fund is the money raised from a nonprofit’s annual giving campaign.”

“Annual giving is the cornerstone of any strong fundraising program. … Summer is the best planning time for an annual giving program, both in terms of coordinating mailing lists and…”

“Many institutions aim to ‘ask’ all their donors at least once a year by whatever the most effective method they have at their disposal.”

This is an ancient concept that needs to be discarded. Here’s why. Contrary to the statement above that “annual giving is the cornerstone of any strong fundraising program,” the truth is that making annual giving your strategy for fundraising will weaken your fundraising program and place it on a foundation that will reduce the potential for donor giving, not to mention increase donor and value attrition.

Donors want to be on a lifelong journey to address their concerns about the world around them. That’s why they gave to you in the first place – they want to get something done that matches their passions and interests. This is not an annual thing. It is an everyday, every week, every month, every year thing. It is a lifelong passion. It does not have time boundaries either short or long. It is about addressing a need.

OK, at this point you might think this tirade on “annual fund” is just an item of personal preference. “Richard and Jeff just don’t like the idea.” Nope. Hang on for the facts.

In a recent Blackbaud report on charitable giving, they shared (among other things) the following facts:

  • 34% of the total revenue of non-profits comes in between October and December.
  • The other 64% comes in at a rate of 6-9% in each of the other months.

You might want to argue that different donors choose different times to give their “annual gift.” Not in our experience. Over the last 30 years of working in this sector, both privately and as an agency serving some of the major non-profits in the United States, Canada and Europe, we have seen that average giving frequency is between two and three times a year. Many donors give four and five times. Some six. We’ve even seen donors give as frequently as 15 times in a year.

Why do donors give more frequently? Because they care deeply about what the non-profit is doing, AND they are asked to help more than one time a year. Notice the focus that the donor has in this scenario. There is important work the non-profit is doing that grabs their interests and feeds their passion. It is ONGOING work, not a one-time event. And in the best cases they are asked to help multiple times, and they’re quickly told how their giving is actually making things happen that they care about.

Believe me, if you are on the “annual fund” train, you are wasting organizational resources and not giving your donors hundreds of opportunities to support your work throughout the year. This is why Jeff and I feel so strongly about this strategy and the use of the words.

Do Jeff and I really hate those two words – prospect and annual? Of course not. We just feel strongly that donors should be honored and regarded as full partners in your mission, and that if you are doing fundraising right you are presenting your donors with many opportunities – all year – to fulfill their interests and passions by giving to your organization.

Give us your input. What words would you use instead of “Prospect” and “Annual Fund”? Talk back to us so we can keep the conversation going.

Richard

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11 Comments

  • Thom Melendez says:

    I agree, wholeheartedly!

  • Julia says:

    What phrase do you suggest instead of “Annual Giving” or “Annual Fund”?

    I’m asking as a Manager of Annual Giving. We certainly don’t limit our asks to just once per year (unless a donor has specifically requested to be solicited in that way), but I have always thought of the Annual Fund as the fund that provides the most reliable and predictable source of income year after year (annually). I agree that the phrase doesn’t quite feel right because most of our donors give more than once annually, but I don’t think it’s appropriate to use the label “Minor Gifts” as opposed to “Major Gifts”, either.

    Would love to hear what you suggest!

  • Jaclyn Kramer says:

    When I say prospect it’s in the context of “major gift prospect,” and never externally! If the donor has given on $25 gift, of course they are a donor! But do they have the capacity, affinity, and philanthropic tendencies to give more? If so, that’s a major gift prospect! I don’t think this is incorrect, do you?

  • Danielle Ward says:

    I agree! Words have power and are so important. It’s why we teach little kids to name their emotions to help them understand and deal with what they’re feeling. You hit on two of my pet peeves!

    For Annual Fund — I encourage the organizations I work with and at to name their fund. Instead of Annual Fund, it’s the XYZ (name appropriate to organization) Fund. Then, when it was described, it was something along the lines of gifts given to the XYZ Fund support the overall work of our organization. These funds allow us to operate on a daily basis covering everything from keeping the lights on while we work to providing the basics to allow us to serve. Obviously, I’d tailor it a lot more to the organization, but I hope you can get the general idea.

  • Karen Osborne says:

    I also hate “low hanging fruit” for our most committed donors.

  • Barbara Edelman says:

    Ditto to what Julia wrote… I am very eager to learn what term you would use to distinguish non-capital campaign gifts from capital campaign gifts and bequests. Thanks!

  • […] Perry with Two Words I Hate (try and guess ‘em before reading the […]

  • Rebecca says:

    You are conflating the donor and their gift. They are connected, but they are not the same. When I use the word “prospect”, I use it to indicate a prospective gift, not a person. So if my portfolio of donors is primarily people who give at the hundred dollar level, I will identify those donors who might give at a higher level – and those gifts would be prospective gifts.

    Likewise with annual fund. That is the description of a sum of money, not of a group of donors. There are donors who of course give annually, in response to annual appeals. The term annual fund is an internal accounting for gifts term, not a label for donors.

  • Richard Perry says:

    Thanks so much for all your input. i am going to write about our opinions on what we would call the “annual fund” in the March 13 blog. Stay tuned.

  • […] that I think are misused: prospect and annual (as in annual fund). If you haven’t read that post, read it now before […]

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