Relying on tax-deductions to motivate charitable donations? Think again!

The more money that individuals and companies have in their pockets, the better it is for charities, period. If you are a fundraising professional or nonprofit who is relying on tax deductions as a motivator for donations to your charity, then you are not doing what you should to become sustainable. That is…

  • to have programs that are always working to achieve greater and lasting results (donors give for results)
  • maximize the use of every marketing and communications channel to communicate those results, and engage donors and prospects
  • set out to treat ALL donors and volunteers as if they are major donors (you will never know the sacrifice that some are making to make a small gift to support your work)
  • encourage monthly giving, no matter how small the gift
  • seek out opportunities to engage and recruit volunteers to bring donors and outsiders closer to you nonprofit and its work
  • leverage Board, Associate Board, staff, donor and volunteer relationships to expand the organization’s network of constituents
  • set your development staff free to engage the public and build relationships
  • create an entrepreneurial work environment where ALL ideas for improvement and opportunities are welcomed and discussed (remember the ALS “Ice Bucket Challenge”?)
  • work your database to include all of the organization’s relationships, and record as much information about individual, corporate and foundation donors, volunteers, staff and others that is necessary to build growing and lasting relationships (done correctly, your DRM will be a modern-day goldmine)
  • listen to donors, volunteers and others, and fashion your communications to represent their interests and passions
  • using this information, never stop matching donors and prospects with the nonprofit’s needs and visions
  • create and/or build the organization’s endowment.

Asking for the gift becomes less intimidating and more strategic when this to-do list is followed. You will also find that your nonprofit will become less dependent on government funding and tax-deductions to sustain your work.

In 2018 I will take each of these bullet points and address them separately. I look forward to your feedback. Happy New Year!


“Crisis of the Ages” Averted: How Nonprofits Can Survive and Prosper

laughing from the bankLast month I alerted you to a coming crisis that will befall nonprofits and businesses in general. You can read about it here Crisis of the Ages … Is Your Nonprofit Ready?.

I promised that I would provide you with ideas that will help nonprofits to withstand the crisis, and possibly help organizations to thrive during this critical time in our history.

In 1989 When I left the for-profit world and ventured off into the world of nonprofit management and fundraising, there wasn’t much being said about planned gifts at that time. Nonprofits gladly accepted bequests as their donors passed away, but those gifts were few and far between. The majority of nonprofits, except for colleges and hospitals, didn’t have planned giving as part of their overall proactive development strategy.

Then in the mid-1990s while serving as Director of Development for a Detroit, Michigan-based nonprofit, the good folks at Indiana University School of Philanthropy (now the Lilly Family School of Philanthropy) invited me to attend a series of seminars focused on major gifts, endowment and planned gift fundraising. These were terrific experiences! This was also the first time that I heard anything about the fast-approaching wealth transfer/planned giving opportunities.

The aging Baby Boomers are presenting the largest wealth transfer in history with an estimated $41 trillion dollars in wealth being transferred before the year 2052. Learn more about this wealth transfer and its opportunities for planned gifts by reading Wealth Transfer Report from Boston College.

Fast forward to today, and in the 20 years since I first learned of this historic wealth transfer, and since then having worked with many consultants who were advising the nonprofits I served on matters of planned giving and major gifts, not once did these consultants ever suggest what the nonprofits should do with the planned gifts as they are received, nor did they warn of what was coming after the end of The Great Wealth Transfer in 2052. Unfortunately, many nonprofit consulting firms, like many businesses, tell their customers what they want to hear. Nonprofit leaders are eager to learn how they can raise more money, but do not like being told how to use the funds they’ve raised.

What can nonprofits do now to be prepared for the forthcoming crisis?

First, every nonprofit small and large should have their own endowment. I learned this 20 years ago. And as often as I have advised nonprofit CEOs and Boards to establish an endowment, most were concerned only for today figuring that any huge benefit from an endowment wouldn’t occur until there was another Board and CEO in charge. So if your nonprofit doesn’t have an endowment — create one soon!

Second, make it a policy that as planned gifts are fulfilled the money is invested in the nonprofit’s endowment — that is unless the donor designates his/her planned gift for another purpose. You will be surprised how quickly the endowment will grow, and how it can provide revenue that the organization can use both now for its programs and later in response to a crisis.

You will find that your donors love this idea, and that the number of planned gifts will grow because of it. After all, a planned gift is a donor’s way of leaving a positive legacy. The way that many nonprofits spend their planned gifts, “the legacy” lasts only as long as the money. Once the money is spent, the legacy ends. If the donor’s planned gift is invested into an endowment, the money not only remains indefinitely, but grows over time with some of it that can be used now and every year to serve the cause so near and dear to the donor’s heart. Now that’s a legacy!

Imagine how much money will be in your nonprofit’s endowment by year 2052 if your planned gifts are being invested into it. Imagine how much money there would be now, had your nonprofit began investing its planned gifts in its endowment 20 years ago! If you do this now, when this historic crisis hits, your nonprofit will be best prepared to withstand it — and maybe even prosper through it!