7 Steps to Write an Annual Appeal Letter for Nonprofits in 2024

The centerpiece of a successful fundraising program lies in creating a persuasive, compelling annual appeal letter.

While the daily business of a nonprofit may not be what draws in support to the organization, creating an effective annual appeal letter can help attract donors who will provide flexible operating dollars, ensuring the nonprofit’s work is supported for the coming year (and beyond).

In the following article, you will learn what an annual appeal letter is, why it’s important, and how you can develop one that truly shines.

Let’s begin.

An annual appeal letter is a yearly letter sent by nonprofit organizations to current and prospective donors requesting funding to support general operating expenses.

General operating expenses are a nonprofit organization’s costs related to its day-to-day operations. They are not directly connected to a specific program or project. Some examples of these expenses include but are not limited to:

• Personnel
• Utilities
• Rent
• Software
• Office supplies and equipment
• Accounting fees
• Advertising and communications
• Other administrative and overhead costs associated with doing business day in and day out

Much of a nonprofit’s work throughout the year is focused on supporting direct services and ensuring specific projects and programs are fully funded. The annual appeal letter gives the organization the opportunity to speak broadly about the organization’s objectives, outcomes, and priorities for the year ahead to solicit funding that will indirectly advance the overall work of the organization.

The letter allows you to address the impact you have made on your community and reforge connections with your audiences by demonstrating the efficacy of your work.

It can be a celebration of staff members’ accomplishments or a place to highlight the triumphs experienced by the people you serve.

Writing an effective annual appeal letter is important for several reasons.

A well-written annual appeal letter will help strengthen your audience’s connection to your organization’s work. The letter will summarize important yearly milestones and achievements and link those achievements with the broader needs of the community.

Illustrating the impact of your work will bolster confidence in your organization and remind your donors why they became involved and supported your organization in the first place.

Additionally, the annual appeal letter is crucial to obtain flexible dollars your organization can direct towards areas of greatest operational need. The annual appeal letter is the crux of any nonprofit’s fundraising approach for their annual fund which provides broad and flexible support for general operating costs.

The annual fund is the collection of unrestricted donations a nonprofit organization raises throughout the year, including donations secured via the annual appeal letter. Developing a robust annual fund will give your organization increased financial security, ensuring you have the dollars necessary to sustain operations over the long term and offset expenses when unforeseen or emergency situations arise.

Now that you understand the basics of an annual appeal letter, it is time to get into some fun details and direct pointers on how to craft your very own.

The following section will provide you with the steps you need to develop a letter that is persuasive and compelling, strengthening your organization’s approach to fundraising.

Let’s get started:

1. Tell a Story

Your annual appeal letter should be far more than simply asking for additional funds for your organization—it should tell a thoughtful and compelling narrative and powerfully illustrate the impact your nonprofit has on the broader community.

A 2022 study from the University of Indiana shows that donors are becoming increasingly interested in the impact their dollars make, expressing a greater interest for nonprofits to communicate their work’s impact and efficacy.

When it comes to writing the annual appeal letter it is important to show donors tangible results in a captivating manner.

Take for example Habitat for Humanity’s affiliate in Worcester, Massachusetts. Their annual appeal letter does not simply ask for additional donations and support—the letter expertly weaves in a compelling story about their work impacting the lives of their participants. The letter paints a striking picture of participants Izzy and Kayleigh, their families, and the struggles they overcame thanks to the support of Habitat for Humanity.

When writing your letter, think of how your work is having a positive impact on your participants and your community, and tell the story of how you are continuously working to make that happen. Use specific examples from the lived experiences of the communities and people you serve to develop a personal connection with your donors and work.

2. Begin with a Compelling Introduction

To write an exceptional annual appeal letter that stands out among the rest, you will want to take time to craft a compelling introduction to capture your donors’ attention right off the bat.

As previously explained, an annual appeal letter is a key aspect of every nonprofit organization’s fundraising strategy. That means you will be competing with other nonprofit organizations that are sending out their own annual appeal letters.

So, how do you write an attention-grabbing introduction?

Starting with a unique statistic about your service or the broader context of your work can help secure your readers’ attention and immediately illustrate a need and your organization’s ability to effectively respond.

Maybe you hosted an event with a well-known keynote speaker? Leverage their support and expertise by starting the letter with a quote from their address.

Take special care to develop a powerful and captivating introduction that will drive your donors to read on and ultimately take action.

When calling on your donors to contribute, it is crucial to convey the urgency of the request. Many donors yearly give to a set number of organizations and take into consideration the immediate impact of their needs. “Why donate now?”, they may be asking.

It is up to you to make a case and effectively express the urgency of your organization’s need—make sure your donors know the answer to “why now?”.

One of the ways you can convey urgency in your letter is by putting your organization’s work in the context of an immediate need on the local, national, or even international level. Consider how your nonprofit organization’s work speaks to the current cultural or political moment.

Nonprofit organizations typically address gaps that are not filled by the public or private sector. Express how your organization is fulfilling an immediate need and that your donors’ support is critical to seeing this urgent need is met.

Showing your donors the immediate and urgent need of your request is a powerful way to present your annual appeal letter and to convince more donors to give.

One of the key goals of an annual appeal letter is to show your donors how your nonprofit’s work is making a difference and the tangible impact their gift will make.

Illustrating your organization’s impact helps build trust with donors, letting them know exactly how their gift is used and how support for your nonprofit will positively impact their community, nation, or even the world.

A great way to show your nonprofit’s impact is to use graphics paired with data points to draw your reader’s eye to key facts and figures that demonstrate your organization’s effectiveness.

For example, the Midwest Access Coalition presents their annual outcomes using very brief messages paired with graphics that are simple and easy to quickly comprehend with just a glance.

Demonstrating your organization’s successful track record in simple, concise terms will keep your reader engaged and help cement a relationship with your donors built on trust.

5. Keep it Concise

The tricky part about writing an effective annual appeal letter is expressing a massive amount of information in a succinct manner.

You want to communicate the broad range of services and programming your organization offers, the impact your nonprofit has made, and your successful track record, all while encouraging your donors to give to the organization. However, too much information could easily drive your audience away.

Keep your annual appeal letter concise, offering only the most compelling and essential information you will need to draw your reader in and secure their support.

Remember, you are not preparing an exhaustive report where every word and point of data will be analyzed. Detailed information about your organization’s impact should be saved for your nonprofit’s annual report. Focus on what is most essential in your letter.

What are the most important accomplishments and highlights from the previous year? What is the one major objective for the year ahead? Asking yourself these questions will help you narrow the focus of your letter and keep it simple and engaging for your donors to read.

The most important objective of a nonprofit organization’s annual appeal letter is to inspire the audience to take action.

To effectively accomplish this, be sure to take special care to generate a compelling call to action. A call to action is a short, simple message that drives your donors to take some kind of action.

For nonprofit organizations, this typically is a direction to donate to the organization, but calls to action can also be used to request volunteers or to urge your audience to take civic action to support causes associated with the nonprofit’s work.

Your annual appeal letter will require a strong call to action. Once you have introduced the work your nonprofit does and illustrated its impact, it is time to direct your donors to the next steps.

The call to action can simply be a short, persuasive sentence near the close of the letter urging your donors to make a donation and brief directions or a tear-off form to mail back with the donation.

If your letter is sent in the body of an email, you can use bold, colorful buttons to direct your audience directly to your website where they can donate immediately.

Regardless of the medium, the call to action should be short and sweet and evoke strong emotions in your reader. One way to accomplish this is to call back to what you have previously stated in the letter. Briefly reiterate the urgency of the request while summarizing the monumental impact a donor’s gift would have prior to directing your audience to donate.

One of the most crucial, but often forgotten, tenants of great fundraising is to always, always thank your donors.

While it may seem like a simple gesture, offering your donors a gracious and warm thank you for their donation is imperative. Even though your donors may not have given yet prior to receiving the annual appeal letter, you still have to preemptively thank them for their continued support and for being an important part of your nonprofit’s community.

Donors want to feel involved and feel like their contribution is much more than a check the organization will cash. Closing your annual appeal letter with an authentic message of thanks will help foster a positive and thoughtful relationship with your donors.

What’s more, do not forget to personalize your message of thanks. Be sure to thank them by name in your communication and for added emphasis, let them know the impact their gift will have on your organization.

While it is important to understand what to do when writing an effective annual appeal letter, it is equally important to know what NOT to do.

Here are three common mistakes to avoid when writing an annual appeal letter:

• Guilt: Giving should be a wholly positive experience for your donors. Nonprofits should never use guilt as a tool to secure donations. Choose instead to focus on the impact of your work and highlight stories of success to thoughtfully inspire your donors to lend their support.‍
• Jargon: Remember that your annual appeal letter should be concise and easy to understand. Bogging your annual appeal letter in nonprofit jargon and language that is unfamiliar to readers can be alienating to your audience and cause your donors to lose interest. Choose a language that is digestible to ensure you can effectively communicate to a diverse audience.‍
• Infrequent Communication: Do not forget that the donor/nonprofit relationship is a perpetual undertaking. The annual appeal letter should not be the only contact you have with your donors during the year. Be sure to take steps to strategize and meticulously plan the entire donor experience so each solicitation and each communication is seamless and their partnership is earned.

Every nonprofit organization requires a stable source of funding to ensure continuity of services. An annual appeal letter is a powerful tool to secure flexible, unrestricted funding from a diverse audience, and to strengthen the relationship between your organization and your donors.

With the tips and resources provided in this article, you have everything you need to write an exceptional annual appeal letter for your organization.

What are you waiting for? Time to get started!