Category Archives: General Fundraising

Motivations for Holiday Charitable Giving: It’s Not Just the Tax Deductions!

As someone who donates to charity at random times throughout the year, I had always assumed that the end-of-year flood from other donors was due to the need to rack up points with the IRS come next April. Wrong!

As the American Red Cross found in a survey last year, four out five Americans feel that “helping someone less fortunate is an important part of their holiday tradition.” (And we probably all know by now that upwards of a third of all charitable donations are made during the final weeks of the year, so this is more than just talk.)

Well, then. If your nonprofit wasn’t already ramped up for end-of-year appeals, you’ve got one more reason to get energized about it. Of course, you’ve got a lot of competition — every nonprofit in the universe is pumping out appeals of every form, in writing, through email, and via their social networks. But the statistics on end-of-year giving suggest something interesting — that these appeals will actually receive more focused attention from donors than usual.

Instead of acting like I usually do (ripping open the appeal envelope, start tossing bits toward the recycle bin, noticing a catchy line, reading a bit, and then perhaps, miracle of miracles, deciding to make a donation), holiday-season donors are actually starting out with the intention of making a donation. It’s just a matter of to which organizations, and what share of their intended amount will go to each. They may actually set aside time to review all the possibilities. Some families I know actually sit down with the kids, let each person make a case for their favorite causes, and make a joint decision as to which groups they’ll donate to.

How to create the most effective appeals given this unique opportunity? For a helpful rundown of ideas from around the Web, read Ashley Halligan’s article on the Software Advice blog: How Your Nonprofit Can Capture December’s Giving Trend

Has Your Nonprofit Re-Registered in States Where It Solicits Funds?

It’s a problem that lawyers serving nonprofit organizations serving nonprofits see all too often: The nonprofit gets as far as figuring out which states it has been or will be soliciting charitable contributions in, takes the appropriate steps to register in those states, and then forgets that it’s in compliance only for the next 364 days. (For background on the basic requirements, see attorney Stephen Fishman’s article, “Fundraising Registration: Does Your Nonprofit Need to Register?“)

A nonprofit has to remember to re-register in every state where it will be fundraising. (It also, of course, needs to keep an eye on whether it has started raising money in states where it has never registered in the first place). All too often, however, the people who took care of registrations the first time around have left, or institutional memory otherwise fails — and the problem goes unnoticed until the nonprofit receives a “cease and desist” letter from the state in question.

This isn’t necessarily an end-of-year problem — the clock starts ticking whenever you first registered, which may have happened at different times for different states. Nevertheless, with mere months until you have to submit your next Form 990 to the IRS (in which you’ll probably need to name the states where you must register and have indeed registered, depending on which version of the form you fill out), be smart and doublecheck now on your group’s re-registration obligations.

Nolo’s book “Nonprofit Fundraising Registration: The 50-State Guide” can help with this process.

Or, you might want to consult an experienced nonprofit attorney with questions.

Some People Will NEVER Agree to Recurring Donations

I thought I was a statistical outlier in absolutely, categorically refusing to sign up for regular, monthly donations to my favorite charities. To me, the idea sounds too similar to various times when I’ve gotten a free or low-cost magazine or newspaper subscription, only to find that turning off the tap was nigh on impossible.

Apparently, however, I’m not alone in my approach. Blackbaud’s November, 2012 “Donor Perspectives” survey found that among U.S. donors, 19% said that “nothing would compel them to become a regular donor to charities to which they currently make one-off donations.”

That’s a useful thing to know, given how many charities are pushing the idea of recurring donations. And why wouldn’t they, given the possibility of an ongoing income stream from donors who might not otherwise be able to afford such a large amount?

But let’s not go overboard chasing the possibility of recurring donations; for example, by failing to offer other methods of contributing. “Who would be silly enough to do that?” you ask. In fact, I was approached on the street by a volunteer for a major environmental organization who spent a long time trying to talk me into a recurring donation plan and then, when I said I was willing to make a one-time donation only, said they couldn’t do that! That was a waste of both our time.

The survey also reminds us that talking someone into a recurring donation isn’t the end of your interaction with them. Between 20% and 30% of those surveyed said that they’d stopped making recurring donations to at least one organization in the last three years. The most common reason was personal finances, which of course nonprofits can’t do anything about.

But the second most common reason was “a feeling that the charity was not making the best use of its financial resources.” That’s something the nonprofit can certainly do something about. I’ll bet those donors weren’t doing a careful analysis of the groups’ financials and Forms 990. More likely they were simply underwhelmed by the reports they were getting back from the group — or, dare I say, were upset by getting continued appeals for more money. It’s also possible that their expectations from the group in question were heightened, given their feeling that, “I’m paying the bills for this place.” How about making sure to regularly thank the recurring donors, give them specific information on how their recurring donation helps maintain and improve your group’s efforts, and hold off on the followup appeals?

Fundraising Kudos to: Strike Debt

Okay, let’s just all drop our collective jaws at the success of Strike Debt’s recent telethon, which raised money for a project it calls Rolling Jubilee. The group brought in a whopping $293,000 — enough, it figures, to buy $5.9 million in unpaid medical debt obligations off creditors, and thus save a lot of people from bankruptcy. (Around 62% of bankruptcies are caused by medical debts.) The group is calling it a “bailout for the 99 percent.”

Why did the fundraiser work so well? I’m sure much could be said about the organizing, skills, and determination of those running the telethon, but it also sounds like, in the words of the Village Voice, they “struck a nerve.” With the group’s origins in the Occupy movement, it tapped into Americans’ frustration at the crippling nature of debts that arose for reasons beyond their control.

Being able to point donors to the exact way in which their money would be used is an unusual feature of this fundraiser, as well.

Strike Debt is basically acting as the middleman to a person in need — which should be true of many nonprofits, but the link is often harder to demonstrate.

What’s more, donors are getting a “bargain” — their money doesn’t pay off another’s debt dollar for dollar, but is going to buy bad debts on the secondary market, where the creditors are typically willing to sell them off for pennies on the dollar. No wonder this one’s going viral!

 

Let the End-of-Year Fundraising Begin!

I don’t know about you, but it feels like there’s a bit of space in my email inbox left behind now that all the campaign solicitations disappeared. But I’m sure it won’t last long.

Oops, my email inbox is filling up as fast as I write this. Savvy nonprofits are weighing in with subject lines like, “After Election Day: The Future of . . . ” and “What the Election Means for  . . . .”

Smart move on their part: We’re entering the most intense fundraising period of the year, in which the majority of individual donations to nonprofits are made. By grabbing readers’ attention with an email focused on subject matter rather than a need for donations, they are establishing themselves as a credible and valuable source of information. That credibility will prove crucial in the coming weeks, as they will (I’m sure) be coming back to me with requests for money.

If you haven’t planned your fundraising strategy for the coming weeks, here’s Kivi Leroux Miller offers “A Quick End-of-Year-Fundraising Plan” that’s worth reprising.

 

Are Leveled-Out Giving Trends Good News?

The 2012 Fundraising Effectiveness Report from the Association of Fundraising Professionals and the Urban Institute shows that while charities saw reduced donation totals in 2010 – with $105 lost due to departed donors and reduced gifts for every $100 gained in new or increased gifts — 2011 saw a return to flat levels of giving. So, the bleeding has stopped — but has the healing begun?

In one sense, no: Organizations are still losing more donors than they’re gaining (107 per 100 last year).  So nonprofits somehow aren’t heeding the old fundraising lesson, which the report reminds us of, that “Taking positive steps to reduce gift and donor losses is the least expensive strategy for increasing net fundraising gains.”

Then again — as if you didn’t have enough to worry about — the numbers do seem to show a surprising amount of energy around new donors. Is it because organizations have been doing more to reach out to new donors, or because a new pool of donors is responding to obvious societal need while others fall? Hard to say, but it looks like groups should continue whatever it is they’re doing right!

Regardless of trends, the key concept that the report tries to convey should be easier for every group to wrap its hands around: Nonprofits should look beyond the final donation numbers to see where they’ve gained ground and where they’ve lost. If your group has been looking only at the bottom line total donation amounts, and hasn’t examined how much of its budget is due to new and increased donations versus lapsed donors or reduced donations, now’s the time to do so. You may spot an instructive trend.

Volunteer Fundraising a Common Path to Professional Fundraising

A recent article in the Pittsburgh Post Gazette, “A newsmaker you should know: From fundraising parent to charity’s executive director,” offers a reminder of the way many professional nonprofit fundraisers get their start: by pitching in on a cause that they care about. In Debra Panei’s case, she had been helping raise money for her children’s school when she discovered she “really liked” fundraising.

Thank goodness this happens to some people, because I’ve never heard a child say, “I want to be a fundraiser when I grow up,” much less a parent saying, “Tommy wants to be a lawyer, but I’m really hoping he’ll go into fundraising.” Hopefully that will change someday, as the field of fundraising becomes more professionalized, and an increasing number of colleges offer courses in fundraising and other aspects of nonprofit administration.

In the meantime, people like Debra often have to learn by doing — no small task, as she is the first to admit. When she started her first fundraising position, as a development assistant at St. Barnabas Charities, she says “I found out there is a lot more to fundraising.” Now there’s an understatement!

Fortunately, there are numerous resources to help anyone learning to fundraise. And I’ve been thrilled to discover that my book, “Effective Fundraising for Nonprofits,” is being used as a textbook in numerous fundraising courses, in places like San Francisco State University,  the University of Michigan School of Social Work, the University of Kansas, the Palmer School of Library and Information Science, and the University of the Pacific.

Media Points to Lack of Transparency About Donations to Churches

The Wall Street Journal article title says it all: “Trust in the Lord . . . But Check Out the Church.”

It starts with a shocking statistic from the Center for the Study of Global Christianity at Gordon-Conwell Theological Seminary in South Hamilton, Massachusetts: “Of the $569 billion that churchgoers and others are expected to donate to Christian causes this year world-wide, about 6%, $35 billion, will end up in the hands of money launderers, embezzlers, tax evaders or unscrupulous ministers living too high on the hog.”

Yikes. For any non-church nonprofits, the very fact that any group could get away with such malfeasance will come as a shock. The degree of scrutiny of nonprofits seems to increase year by year, as both the IRS and the media amp up their oversight and accountability requirements.

But, as the article points out, churches are not required to file the IRS Form 990 that other 501(c)(3) nonprofits are. The 990 gives the public some basic information with which to check out what’s going on financially and develop further questions.

(For details on what types of groups must fill  out Form 990, see “Nonprofits and the Revised IRS Form 990” on Nolo.com.)

The WSJ article offers various bits of advice to donors about checking out church financial matters before making donations. Turned around, what do those mean for churches that have the good sense not to wait for donors to ask questions, and wish to demonstrate their openness about financial matters from the get-go?

  • Be ready and willing to answer questions. Defensiveness will get you nowhere, or worse, lead to suspicion.
  • Get your financial house in order. Even if your fundraising aims are laudable, bad management practices such as putting all financial control in the hands of one person will lead to problems. Put professional accounting systems into place with regard to collecting, disbursing, and accounting for money.
  • Make donors aware of all the ways to give. For example, if volunteering services could offset the churches need for cash, offer this as an option for those donors who might be financially strapped. Remind church members of the possibility of legacy giving, as well.

By inspiring donor confidence, a church may in turn inspire greater donations.

Could Your Nonprofit Raise $100K on Facebook?

A select few groups do raise this amount or more per year on the popular social media site. Unfortunately, it’s less than 1% of those surveyed for the 2011 Nonprofit Social Network Benchmark Report. But the fact any group raises that amount is still astonishing.

The prevailing wisdom is that social networking is, at the end of the day, best used as a friend-raising strategy. Most of the groups surveyed (30%) raised between $0 and $1,000 over the previous 12 months. But have we really tested social fundraising’s possibilities yet, given that the vast majority of groups surveyed reported having invested less than $10,000 and less than 1/4 of an FTE staff person to the task of maintaining their social media presence?

Meanwhile, the return on investment looks pretty good. Unless I’m jamming together numbers that shouldn’t be so jammed, the report seems to say that it took an average of $3.50 to gain a new Facebook fan, and the value of each new fan in the first year was $161. At those rates, I’d be hiring new staff members (probably for the communications department, which is typically the one handling social media).

Facebook isn’t the only social network covered by the report. But with 98% of  nonprofits having established a Facebook presence (though only about half of them attempt to use it to fundraise), and nonprofits actually using their Facebook page more actively than any other social networking site, it’s pretty clear which is the biggest show in town right now.

Tax Time, and Your Donors Are Wishing They’d Given You More

Maybe. I’ve been working on my taxes this week, and was noticing, as I scanned the list of donors, that each name elicited a different emotional reaction. They ran the gamut, such as:

  • “Has it really been that long since I gave them anything?”
  • “Grr, I think they used up my whole contribution sending me multi-page, glossy follow-up appeals.”
  • “Why didn’t they list my donation amount in their thank-you letter?”
  • “Who on earth are they?”
  • “Aww, what a nice group.”

Most of those are not reactions you’d want people to have to your group. Rather than me trying to describe what’s behind my various reactions, I encourage you to try the same game as you do your taxes. (Alright, so you’re not such as a latenik as I — as you review your completed return, then.)

Think about what the various groups that you have given to did right — and wrong — and how your own nonprofit can mimic or depart from their model.