Key Term

What is Annual Fund?

Definition

An Annual Fund is a nonprofit organization's yearly fundraising program that generates unrestricted donations to support operational expenses and ongoing programs. It typically involves regular appeals to donors throughout the year through various channels such as direct mail, email, phone calls, and social media, seeking gifts that can be used for the organization's most pressing needs rather than for specific projects or endowments.

Significance

Annual Funds are crucial to nonprofit sustainability as they provide the flexible funding needed to maintain daily operations, cover administrative costs, and support core programs that restricted grants or major gifts may not fund. They also help organizations build a reliable donor base, establish consistent giving patterns, and cultivate relationships that can lead to larger gifts in the future. The success of an Annual Fund often serves as a key indicator of an organization's overall financial health and its effectiveness in donor engagement and stewardship.